Annual / Quarterly Financial Statement • Mar 13, 2009
Annual / Quarterly Financial Statement
Open in ViewerOpens in native device viewer
Consolidated Annual Accounts 31 December 2008
| Notes Notes |
2008 2008 |
2007 | |
|---|---|---|---|
| (Thousands of Euros) | (Thousands of Euros) | ||
| Revenue | 5 | 532,429 | 14,363 |
| Cost of consumed electricity | 5 | -993 | -158 |
| Changes in inventories and cost of raw materials | |||
| and consumables used | 5 | -11,251 | -501 |
| 520,185 | 13,704 | ||
| Other operating income / (expenses) | |||
| Other operating income | 6 | 89,524 | 1,749 |
| Supplies and services | 7 | -106,947 | -2,927 |
| Personnel costs | 8 | -37,011 | -999 |
| Employee benefits expenses Other operating expenses |
8 9 |
-1,090 -26,784 |
-23 -792 |
| -82,308 | -2,992 | ||
| 437,877 | 10,712 | ||
| Provisions | 806 | - | |
| Depreciation and amortisation expense | 10 | -207,764 | -6,885 |
| Amortisation of deferred income / Government grants | 10 | 696 | 468 |
| 231,615 | 4,295 | ||
| Gains / (losses) from the sale of financial assets |
11 | 2,363 | 888 |
| Other financial income | 12 | 270,901 | 955 |
| Other financial expenses | 12 | -348,120 | -4,924 |
| Share of profit of associates | 4,438 | 203 | |
| Profit before tax | 161,197 | 1,417 | |
| Income tax expense | 13 | -48,979 | -47 |
| Profit after tax | 112,218 | 1,370 | |
| Profit for the period | 112,218 | 1,370 | |
| Attributable to: | |||
| Equity holders of EDP Renováveis | 27 | 104,364 | 1,093 |
| Minority interest | 29 | 7,854 | 277 |
| Profit for the period | 112,218 | 1,370 | |
| Earnings per share basic and diluted - Euros | 27 | 0.16 | 0.61 |
The following notes form an integral part of these Consolidated Financial Statements
| Notes Notes |
2008 2008 |
2007 | |
|---|---|---|---|
| (Thousands of Euros) | (Thousands of Euros) | ||
| Assets | |||
| Property, plant and equipment | 14 | 7,052,783 | 4,926,300 |
| Intangible assets | 15 | 22,408 | 22,958 |
| Goodwill | 16 | 1,372,388 | 1,201,170 |
| Investments in associates | 18 | 40,782 | 32,360 |
| Available for sale investments | 19 | 12,501 | 7,951 |
| Deferred tax assets | 20 | 21,834 | 16,719 |
| Debtors and other assets | 23 | 141,540 | 100,462 |
| Total Non-Current Assets | 8,664,236 | 6,307,920 | |
| Inventories | 21 | 12,377 | 39,024 |
| Trade receivables | 22 | 82,598 | 60,885 |
| Debtors and other assets | 23 | 195,813 | 99,251 |
| Tax receivable | 24 | 175,093 | 96,835 |
| Financial assets at fair value through profit or loss | 25 | 35,774 | 44,839 |
| Cash and cash equivalents | 26 | 229,680 | 388,492 |
| Assets held for sale | 42 | 985 | 2,641 |
| Total Current Assets | 732,320 | 731,967 | |
| Total Assets | 9,396,556 | 7,039,887 | |
| Equity | |||
| Share capital | 27 | 4,361,541 | 18,873 |
| Share premium | 27 | 552,035 | 1,882,338 |
| Reserves and retained earnings | 28 | 89,419 | 129,844 |
| Consolidated net profit attributable to equity holders of the parent | 104,364 | 1,093 | |
| Total equity attributable to equity holders of the parent | 5,107,359 | 2,032,148 | |
| Minority interest | 29 | 82,751 | 213,573 |
| Total Equity | 5,190,110 | 2,245,721 | |
| Liabilities | |||
| Medium / Long term financial debt | 30 | 1,376,108 | 2,364,629 |
| Employee benefits | 31 | 1,162 | 1,211 |
| Provisions | 32 | 49,698 | 22,597 |
| Deferred tax liabilities | 20 | 303,331 | 293,394 |
| Trade and other payables | 33 | 1,695,387 | 1,183,053 |
| Total Non-Current Liabilities | 3,425,686 | 3,864,884 | |
| Short term financial debt | 30 | 86,165 | 517,444 |
| Trade and other payables | 33 | 648,334 | 398,193 |
| Tax payable | 34 | 46,261 | 13,645 |
| Total Current Liabilities | 780,760 | 929,282 | |
| Total Liabilities | 4,206,446 | 4,794,166 | |
| Total Equity and Liabilities | 9,396,556 | 7,039,887 |
(Thousands of Euros)
| Total Total Equity Equity |
Share Share Capital Capital |
Share Premium Premium |
Reserves and retained and retained and retained earnings earnings |
Hedging Hedging Hedging reserve reservereserve |
Fair value Fair valueFair value reserve reservereserve |
Equity attributable to equity holders of EDP holders of EDP EDP Renováveis Renováveis |
Minority Minority Interests Interests |
|
|---|---|---|---|---|---|---|---|---|
| Balance as at 3 December 2007 | - | - | - | - | - | - | - | - |
| Recognised income and expense for the period | ||||||||
| Fair value reserve (cash flow hedge) net of taxes | 13,354 | - | - | - | 11,566 | - | 11,566 | 1,788 |
| Exchange differences arising on consolidation | -819 | - | - | -819 | - | - | -819 | - |
| Profit for the period | 1,370 | - | - | 1,093 | - | - | 1,093 | 277 |
| Total recognised income and expense for the period | 13,905 | - | - | 274 | 11,566 | - | 11,840 | 2,065 |
| Incorporation of EDP Renováveis | 15 | 15 | - | - | - | - | 15 | - |
| Share capital increase in kind | 1,901,196 | 18,858 | 1,882,338 | - | - | - | 1,901,196 | - |
| Non monetary contribution of NEO | 119,097 | - | - | 119,097 | - | - | 119,097 | - |
| Minority interests arising from NEO contribution | 183,522 | 183,522 | ||||||
| Minority interests resulting from PPA adjustment in Relax acquisition |
27,986 | - | - | - | - | - | - | 27,986 |
| Balance as at 31 December 2007 | 2,245,721 | 18,873 | 1,882,338 | 119,371 | 11,566 | - | 2,032,148 | 213,573 |
| Recognised income and expense for the period | ||||||||
| Exchange differences arising on consolidation | 1,998 | - | - | 1,998 | - | - | 1,998 | - |
| Fair value reserve (cash flow hedge) net of tax | 6,117 | - | - | - | - | 7,103 | 7,103 | -986 |
| Fair value reserve (available for sale financial assets) net of tax |
7,747 | - | - | - | 7,747 | - | 7,747 | - |
| Profit for the period | 112,218 | - | - | 104,364 | - | - | 104,364 | 7,854 |
| Total recognised income and expense for the period | 128,080 | - | - | 106,362 | 7,747 | 7,103 | 121,212 | 6,868 |
| Share capital increase in kind | 180,208 | 4,718 | 175,490 | - | - | - | 180,208 | - |
| Share capital increase by incorporation of share premium | - | 2,057,828 | -2,057,828 | - | - | - | - | - |
| Share capital increase by incorporation of loans | 1,300,000 | 1,300,000 | - | - | - | - | 1,300,000 | - |
| Share capital increase by IPO | 1,566,726 | 980,122 | 586,604 | - | - | - | 1,566,726 | - |
| Expenses incurred with the IPO | -49,385 | - | -49,385 | - | - | - | -49,385 | - |
| Tax effect of expenses incurred with the IPO | 14,816 | - | 14,816 | - | - | - | 14,816 | - |
| Dividends attributable to minority interests | -2,740 | - | - | - | - | - | - | -2,740 |
| Reserves and minority interests arising from the acquisition of 40% of NEO |
-205,109 | - | - | -58,431 | - | - | -58,431 | -146,678 |
| Share capital increase in NEO Group companies | 11,320 | - | - | - | - | - | - | 11,320 |
| Minority interests decrease resulting from acquisitions | 3,489 | - | - | - | - | - | - | 3,489 |
| Minority interests arising from acquisition of additional 10% of Dessarollos Catalanes del Viento subsidiaries |
-2,479 | - | - | - | - | - | - | -2,479 |
| Other | -537 | - | - | 65 | - | - | 65 | -602 |
| Balance as at 31 December 2008 | 5,190,110 | 4,361,541 | 552,035 | 167,367 | 19,313 | 7,103 | 5,107,359 | 82,751 |
| (Thousands of Euros) | ||
|---|---|---|
| Group | ||
| 2008 2008 |
2007 | |
| Cash flows from operating activities | ||
| Cash receipts from customers | 506,740 | 11,576 |
| Cash paid to suppliers | -114,662 | -9,643 |
| Cash paid to employees | -30,582 | -1,152 |
| Concession rents paid | -5,692 | - |
| Other receipts / (payments) relating to operating activities | -25,388 | -23,449 |
| 330,416 | -22,668 | |
| Income tax received / (paid) | -36,573 | 22 |
| Net cash flows from operating activities | 293,843 | -22,646 |
| Continuing activities | 293,843 | -22,646 |
| Cash flows from investing activities | ||
| Cash receipts resulting from: | ||
| Proceeds from sale of financial assets | 16,922 | 1,853 |
| Proceeds from sale of property, plant and equipment | 4,512 | 2,075 |
| Investments grants received | 6,803 | -39 |
| Interest received | 44,492 | 562 |
| Dividends received | 2,651 | - |
| 75,380 | 4,451 | |
| Cash payments resulting from: | ||
| Acquisition of financial assets | -90,299 | -499 |
| Acquisition of property, plant and equipment | -1,919,762 -2,010,061 |
-142,483 -142,982 |
| Net cash flows from investing activities | -1,934,681 | -138,531 |
| Continuing activities | -1,934,681 | -138,531 |
| Cash flows from financing activities | ||
| Receipts/ (payments) of loans | -315,854 | 48,910 |
| Interest and similar costs | -77,625 | -13,924 |
| Increases in capital and share premium | 1,538,958 | 15 |
| Receipts/ (payments) from derivative financial instruments Dividends paid |
13,412 -2,759 |
-6,952 - |
| Receipts from institutional partnership (Horizon) | 319,985 | 242,809 |
| Net cash flows from financing activities | 1,476,117 | 270,858 |
| Continuing activities | 1,476,117 | 270,858 |
| Net increase / (decrease) in cash and cash equivalents (decrease) in cash and equivalents |
-164,721 | 109,681 |
| Effect of exchange rate fluctuations on cash held | 738 | -269 |
| Changes in cash due to business combinations | 5,171 | 279,080 |
| Cash and cash equivalents at the beginning of the period () of the period () |
388,492 | - |
| Cash and cash equivalents at the end of the period () end of () |
229,680 | 388,492 |
(*) See Note 26 to the financial statements for a detailed breakdown of Cash and cash equivalents
EDP Renováveis, Sociedad Anónima (hereinafter referred to as "EDP Renováveis") was incorporated on 4 December 2007. Its main corporate objective is to engage in activities related to the electricity sector, namely the planning, construction, operation and maintenance of electricity generating power stations, especially hydroelectric, mini-hydroelectric, wind, solar, thermal solar, photovoltaic, biomass and waste plants, among others. The registered offices of the company are located in Oviedo, Spain. On 18 March 2008 EDP Renováveis was converted into a company incorporated by shares (Sociedad Anónima).
On 4 June, 2008, following an Initial Public Ofering ("IPO"), EDP Renováveis, S.A. became a public traded company listed in the Euronext Lisbon.
As at 31 December 2008 the share capital is held 62.02% by EDP S.A. through its branch in Spain, 15.51% by Hidrocantábrico and 22.47% of the share capital is free-float in the Euronext Lisbon.
As at 31 December, 2008, EDP Renováveis holds a 100% stake in the share capital of Nuevas Energias de Occidente ("NEO") and a 100% stake in the share capital of Horizon Wind Energy, LLC ("Horizon"). These holdings were transferred to EDP Renováveis through several share capital increases in kind subscribed by EDP Energias de Portugal, S.A. Sucursal en España (EDP Branch) and Hidroeléctrica del Cantábrico, S.A. The holding in Horizon was acquired by EDP Sucursal, on 2 July 2007, from Goldman Sachs, and was subsequently transferred to EDP Renováveis on 18 December 2007.
NEO operates through its subsidiaries located in Portugal, Spain, France, Belgium, Poland and Romania. NEO's main subsidiaries are: Enernova (wind farms in Portugal), Genesa (renewable resources electricity generation in Spain), Agrupación Eólica (wind farms in Spain and France), Greenwind (wind farms in Belgium partnership with local investors) and Relax Wind Parks (wind farms in Poland).
Horizon's main activities consist on the development, management and operation of wind farms in the United States of America. Horizon holds a portfolio of projects in the operation and development stages and a portfolio of projects with a potential generation capacity of 10,500 MW.
On 26 February 2008, EDP Renováveis announced the incorporation of a new Brazilian company, 55% owned by EDP Renováveis and 45% owned by Energias do Brasil (the EDP Group Brazilian holding company which consolidates all assets related to generation, trade and distribution of electricity in Brazil). The purpose of this new EDP Renováveis Group company is to establish a new business unit to aggregate all the investments in the renewable energy market of South America.
On 8 April 2008, EDP Renováveis through its subsidiary NEO, acquired to EOLE76 and Eurocape in France (i) 3 operating wind farms in Normandia with a gross installed capacity of 35 MW and (ii) several wind farms in development, mainly located in Normandia and Rhônes-Alpes, that represent a total capacity of 560 MW.
On 11 June 2008, EDP Renováveis through the new company incorporated in Brazil, agreed to purchase 100% of "Central Nacional de Energia Eólica, S.A. ("CENAEEL"). The conclusion of this operation depends from administrative and contractual authorizations (see note 39).
On 27 June 2008, EDP Renováveis through its subsidiary Horizon, started operations in its biggest wind farm in the USA ("Lone Star"), located in Texas, with an installed capacity of 400 MW.
On 2 October 2008, EDP Renováveis through its subsidiary Horizon, started operations in Rattlesnake Road wind farm, located in Oregon, with an installed capacity of 103 MW.
On 3 October 2008, the Congress of the United States of America ("USA") passed a one-year extension of the renewable energy Production Tax Credit ("PTC") that was included as part of the economic recovery legislation approved in the USA. The extension of the PTC reinforces the positive moment for the development of renewable energy in the USA where EDP Renováveis is present through Horizon Wind Energy LLC.
On 17 October 2008, EDP Renováveis through its subsidiary NEO, acquired 85% of Renovatio Power SRL and Cernavoda Power SRL in Romania which own several wind farms in prospects and development phases that represent a total capacity of 737 MW.
On 29 December 2008, EDP Renováveis through its subsidiary Horizon, agreed to enter into a transaction with a consortium of institutional equity investors composed of JPM Capital Corporation, New York Life Insurance Company and New York Life Insurance and Annuity Corporation for the investment in a portfolio of wind farm projects that started operations in 2008. The total contribution of this consortium for the transaction amounts to 264,000 thousands of USD, of which 214,000 thousands of USD to be invested in December 2008 and 50,000 thousands of USD in January 2009.
As at 31 December 2008, EDP Renováveis and its subsidiaries ("the Group" or the "EDP Renováveis Group") had a total gross installed capacity of 5,052 MW, operating in Portugal (553 MW), Spain (2,109 MW), France (185 MW), Belgium (47 MW) and the United States (2,158 MW).
The Electrical Sector in Spain is regulated by Law 54 of 27 November 1997 and subsequent amendments to legislation.
Royal Decree 436 of 12 March 2004 was published on 24 March 2004 and sets out the methodology to be used for updating and systematizing the legal and economic regime relating to electrical power production under the special regime, which includes the generation of electricity using renewable sources of energy, cogeneration, biomass and waste. This Royal Decree replaces the former Royal Decree 2818/1998 and unifies regulations applicable to special regime energies. The Royal Decree also defines a system whereby the owners of the electrical installation are entitled to sell the production or surplus electrical power to distributors. A regulated price can be received for this sale, or production and surplus can be sold directly on the daily market, futures market or through a bilateral agreement, in which case a marketnegotiated price would be received, plus an incentive for participation in the agreement and a premium if the installation was entitled to receive it.
Royal Decree 661 of 25 May 2007 was published on 26 May 2007 and regulates electrical power produced under the special regime. This Royal Decree replaces Royal Decree 436 of 12 March 2004 and updates regulations on electrical power production under the special regime, whilst maintaining the basic structure of the regulation. The economic framework set out in this Royal Decree maintains the same system of payment for power produced under the special regime, whereby the owner of the installations can opt to sell its power at a regulated price, for all the programming periods only, or sell the power directly on the daily market, futures market or through a bilateral agreement, in this case receiving the negotiated price plus a premium.
The main changes to the Royal Decree include a modification to the regulated price and premiums and the introduction of a variable premium system for certain technologies, such as wind power. The owners of wind power installations officially entering into service prior to 1 January 2008 can opt to adhere to the transitory regime established in the first transitory provision, which stipulates that the owners of this installations may maintain the prices and premiums established in the aforementioned Royal Decree until 31 December 2012.
The NEO Group has opted to sell on the market the power of all its installations currently in operation and to remain in the transitory regime established in the new Royal Decree 661/2007, for all wind power installations officially entering into service prior to 1 January 2008.
The Portuguese legal provisions applicable to the generation of electrical power based on renewable resources are currently established by Decree-Law No. 189/88 dated 27 May 1998, as amended by Decree-Law No. 168/99 dated 18 May 1999, Decree-Law No. 312/2001 dated 10 December 2001, and Decree-Law No. 339-C/2001 dated 29 December 2001. Also relevant is Decree-Law No. 33-A/2005, dated 16 February 2005 ("DL 33-A/2005"), which establishes the current amounts used in the remuneration formula applicable to energy produced by means of renewable resources and the deadlines for the application of such remuneration formula.
The main feature of the legal framework for renewable energy power generation in Portugal is that the national grid operator or the regional distribution operator must purchase all electricity produced by renewable producers who hold an operating license. The construction and operation of a wind farm depends on the allocation of a grid connection point issued by the State Energy Department (Direcção Geral de Geologia e Energia) ("DGGE"). The issue of the point of connection by the DGGE occurs upon the request of the promoters during limited periods of time set by the DGGE or by means of a public tender procedure. Award by direct negotiation is exceptional.
Decree-Law No. 225/2007 dated 31 May, establishes a set of regulations associated to renewable energies, predicted in National Strategy for Energy, and has reviewed the formula used in estimating the remuneration of electricity supply generated by renewable power stations, and delivered to the grid of National Electric System, as well as the definition of attribution procedures of available power in the same grid and deadlines to obtain the establishment license to renewable power stations.
Still in the context of renewable energies, Decree-Law No. 363/2007, dated 2 November, has established the legal regime applicable to electricity generation by microgenerating power stations, both using renewable resources as primary energy or generating electricity and heat. The electricity generators able to access this activity are those that have a low tension electricity purchase agreement.
Since July 1, 2007, the Iberian electricity financial market ("MIBEL") has been fully operational, with daily transactions from both Portugal and Spain, including a forwards market that has operated since July 2006.
The electricity industry in France is governed primarily by Act 2000-108 (amended by Acts 2004-803 and 2006-1537) ("Act 2000"), passed on 10 February 2000, which governs the modernization and development of public energy services and is the general legislative framework for the operation of wind facilities in France. The operation of wind facilities in France is also subject to the provisions of the French environmental and construction code. Article 10 of Act 2000-108 requires nonnationalized electric power distributors to enter into purchase obligation contracts to buy electricity produced by: (i) installations that extract energy from household or similar waste or that use such sources to provide heat to a district heating system; and (ii) installations that use renewable energy sources (including mechanical energy from wind, for which special provisions apply).
Installations that use renewable energy sources, with the exception of those using mechanical wind energy that are located in areas connected to the continental metropolitan grid or that implement energy-efficient technology such as cogeneration, do not qualify for the power purchase obligation unless they comply with defined installed capacity limits. These limits are set by a decree of the Conseil d'Etat (Decree 2000-1196 of 6 December 2000) for each category of installation eligible to benefit from the power purchase obligation. With the new regulation, only wind farms operating within a ZDE (zone de développement éolien) can benefit the power purchase obligation. The power purchase contracts with non-nationalized distributors of electricity are premised on the rates set by ministerial order for each source of renewable energy and according to a model contract approved by the energy minister.
Act 2000 provides that operator of wind facilities may enter into long-term agreements for the purchase and sale of energy with Electricité de France (EDF). The tariffs are set by Order of July 10, 2006 wich was repealed in August 2008 due to formal defect in its approval, and then republished without any amendment in December 2008. The tariffs are the following: (i) during the first ten years of the EDF Agreement, EDF pays a fixed annual tariff, which is 82 Euros per MWh for applications made during 2006 (tariff is amended annualy based, in part, on a inflation-related index), (ii) During years 11 to 15 of the EDF Agreement, the tariff is based on the annual average percentage of energy produced during the wind facility' s first ten years. These tariffs are also amended annually, based, in part, on a inflation-related index. (iii) Beginning in the year 16, there is no specific support structure and the wind energy generators will sell their electricity at market price.
Federal, state and local energy laws and regulations regulate the development, ownership, business organization and operation of electric generating facilities and the sale of electricity in the United States. All project companies within the Group in the United States operate as exempt wholesale generators ("EWGs") or qualifying facilities ("QFs") under federal law or are dually certified. In addition, most of the project companies in the United States are regulated by the Federal Energy Regulatory Commission ("FERC") and have market-based rates on file with FERC.
EWGs are owners or operators of electric generation (including producers of renewable energy, such as wind projects) that are engaged exclusively in the business of owning and/or operating generating facilities and selling electric energy at wholesale rates. An EWG cannot make retail sales of electric energy and may only own or operate the limited interconnection facilities necessary to connect its generating facility to the grid.
The legislation applicable to renewable energy in Poland is primarily contained in an Energy Act passed on 10 April 1997, which has been amended by the Act of 24 July 2002 and the Energy Act of 2 April 2004, which came into effect in January 2005 (together, the ''Energy Act''). The Energy Act implemented provisions (i) of Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity, (ii) of Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas, and (iii) of Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market. Detailed regulations regarding the scope of the energy sector are included in the relevant secondary regulations adopted under the Energy Act. On the basis of the Energy Act, the national energy regulatory authority—the president of the Energy Regulatory Authority (the ''ERA President'') — was established.
Pursuant to the Energy Act, the different forms of supporting power generation from renewable sources introduced in Poland are: (i) A system of obligatory purchase of certificates of origin by the generation companies and trading companies selling electricity to the end user interconnected to a grid in Poland. These power companies are obliged to: a) obtain a certificate of origin and submit it to the ERA President for cancellation, or b) pay a substitute fee calculated in accordance with the Energy Act. ii) If the power company does not purchase certificates of origin or does not pay a substitute fee, the ERA President will penalize such company with a financial penalty calculated in accordance with the Energy Act.
The minimun limit of electricity generated from renewable sources in the total annual volume of electricity delivered to the end users is specified in the ordinance of Ministry of Economy adopted under the Energy Act. In 2008, this minimum limit was 7% and will increase each year up to 12,9% in 2017. These quotas were originally fixed until 2014 but a new regulation approved in August 2008 fixed the quotas for years 2015-2017 and increased the quota for 2013 and 2014.
The regulatory framework for electricity in Belgium is complex in view of the division of powers between the federal and the three regional entities: Wallonia, Flanders and Brussels-Capital. The federal regulatory field of competence includes electricity transmission (of transmission levels above 70 kV), generation, tariffs, planning and nuclear energy. The relevant federal legislation is the Electricity Act of 29 April 1999 (as modified) (the ''Electricity Act''). The regional regulatory entities are responsible for distribution, renewable energy and cogeneration (with the exception of offshore power plants) and energy efficiency. The relevant regional legislation, respectively, is: (a) for Flanders, the Electricity Decree of 17 July 2000; (b) for Wallonia, the Regional Electricity Market Decree of 12 April 2001; and (c) for Brussels-Capital, the Order of 19 July 2001 on the Organization of the Electricity Market.
In view of the allocation of responsibilities between the federal government and the regions, there currently exist four energy regulators: (a) the federal Commission for Electricity and Gas Regulation (''CREG''); (b) the Flemish Electricity and Gas Regulatory Body (''VREG''); (c) the Walloon Energy Commission (''CwaPE''); and (d) the Regulatory Commission for Energy in the Brussels-Capital Region (''BRUGEL'').
The Belgian regulatory system promotes the generation of electricity from renewable sources (and cogeneration) by a system of green certificates (each a ''GC''), as described below. The Belgian federal government is responsible for offshore power plants and for imposing obligations on the transmission system operators. The various GC systems are very similar across the three regions and are similar to the GC system for federally-regulated offshore power plants. There are currently differences in terms of quotas, fines and thresholds for granting GCs. However, GCs issued in one region or by the Federal government in respect of offshore plants are not recognized automatically in the other regions.
The GC system aims at creating a market for GC parallel to the market of sale of electricity. In March 2009 an exchange market for GCs will be launched. Besides the GC market, there is a minimum guaranteed price system at the federal level (obligations imposed on the transmission system operator) or at a regional level (the production aid regime in Flanders and Wallonia).
The promotion of electricity generated from renewable energy sources in Romania was set with the Electricity Law 318/2003. In 2005 a Green Certificate mechanism was introduced with mandatory quotas for suppliers, in order to comply with their EU renewable requirements. Romania must comply with its target of 33% of gross electricity consumption from renewable energy in 2010. The regulatory authority establishes a fixed quota of electricity produced from renewable energy sources which suppliers are obliged to buy and annually reviews applications from green generators in order to be awarded green certificates. Law 220/2008 of 3 November 2008 has introduced some changes in the green certificates system. Currently, producers of wind energy receive two green certificates for each MWh produced (until 2015), which can be sold separately from the physically delivered electricity. From 2016 onwards generators receive 1 green certificate for each MWh produced. The price of electricity is determined in the electricity market and the price of green certificates is determined on a parallel market.
The trading value of green certificates has a floor of 27 Euros and a cap of 55 Euros, both indexed to Romanian inflation. Law 220/2008 also guarantees the access to the National Grid for the electricity produced from renewable sources. In 2007 a new Energy Law was approved (Law 13/2007), which sets July 2007 as the limit date for the legal unbundling in Romania and defines the role of Implicit Supplier and of the Supplier of Last Resort.
The Electrical Sector in Brazil is regulated by Federal Law nº 8,987 of 13 February 1995, which generally rules the concession and permission regime of public services; Law nº 9,074 of 7 July 1995, which rules the grant and extension of public services concession or permission contracts; Federal Law nº 10,438 of 26 April 2002, which governs the increase in Emergency Electric Power Supply and creates the 3,300 MW Program of Incentives for Alternative Electricity Sources (PROINFA); Federal Law nº 10,762 of 11 November 2003 and Law nº 10,848 of 15 March 2004, concerning commercial rules for the trade of Electric Power and; Subsequent amendments to the legislation.
The Decree nº 5,025 of 30 March 2004, regulates the Federal Law nº 10,438 and states the "Alternative Energy Sources" economical and legal framework. PROINFA participants have granted a PPA with ELETROBRÁS, and are subject to the regulator (ANEEL) authority. However, the first stage of PROINFA has ended and the second stage is highly uncertain.
The Decree nº 5,163 of 30 July 2004 regulates the Federal Law nº 10,762, establishing the possibility of distribution companies and authorized agents to buy "Distributed Energy" (Local Generation), by observing a limit of 10% of the total demand of each distribution agent. In addition, the Law nº 10,762 establishes the possibility of an Alternative Source Electricity Producer to sell directly to the final consumer(s) (aggregated demand > 500kW), at any voltage level. As part of the regulatory incentive framework, Renewable Energy producers (or buyers) are granted a discount on the Distribution and Transmission System Use Tariff (TUSD and TUST). Public Electricity Auctions are technically lead by the state "Energy Planning and Research Company" (EPE), who registers, analyses and allows potential participants.
In addition, the Law nº 10,438 has also regulated the use of a special sector fund, the Fossil Fuel Consumption Quota (CCC), to low cost financing of Renewable ventures that are able to replace fossil fuel based energy production.
The consolidated annual accounts presented reflects EDP Renováveis and its subsidiaries results from operations and Group's interests in its associated companies for the year ended 31 December 2008 and to EDP Renováveis for the period from 4 to 31 December 2007 and to its subsidiaries (NEO and Horizon) for the 13 day period ended 31 December 2007 and the financial position as at 31 December 2008 and 31 December 2007.
In accordance with Regulation (EC) no. 1606/2002 of 19 July 2002, from the European Council and Parliament, the Group's consolidated annual accounts are prepared in accordance with International Financial Reporting Standards (IFRS), as endorsed by the European Union (EU). IFRS comprise accounting standards issued by the International Accounting Standards Board ('IASB') and its predecessor body as well as interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and its predecessor bodies.
The Board of Directors approved these consolidated annual accounts on 26 February 2009. The annual accounts are presented in thousand of Euros, rounded to the nearest thousand.
The annual accounts have been prepared under the historical cost convention, modified by the application of fair value basis for derivative financial instruments, financial assets and liabilities held for trading and available-for-sale, except those for which a reliable measure of fair value is not available. Recognised assets and liabilities that are hedged under hedge accounting are stated at fair value in respect of the risk that is being hedged. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell.
EDP Renováveis started its activities on 4 December 2007, consequently, the Group income statement and notes to the income statement captions are not comparable to the Group income statement and notes to the income statement on 31 December 2008.
The preparation of the annual accounts in accordance with the EU-IFRS requires the Board of Directors to make judgments, estimates and assumptions that affect the application of the accounting policies and of the reported amounts of assets, liabilities, income and expenses. The estimates and related assumptions are based on historical experience and other factors believed to be reasonable under the circumstances. They form the basis for making judgments regarding the values of the assets and liabilities whose valuation is not apparent from other sources. Actual results may differ from these estimates. The areas involving the highest degree of judgment or complexity, or for which the assumptions and estimates are considered significant, are disclosed in Note 3 (Critical accounting estimates and judgments in applying accounting policies).
In accordance with IFRS 3, the adjustments that have resulted from the purchase price allocation carried out in 2008 for the Relax Winds Group goodwill booked in 2007 originates a reclassification of the comparative financial information as if the accounting for this business combination had been completed at the date of acquisition.
The working capital of EDP Renováveis as at 31 December 2008 is negative. The consolidated financial statements of EDP Renováveis and its subsidiaries have been prepared on a going concern basis, considering that the main shareholder has undertaken in writting to provide the necessary financial support for Nuevas Energias de Occidente, S.L. and Horizon Wind Energy, LLC (the parent companies of NEO and Horizon subgroups) to meet their commitments in the short and medium term.
The consolidated annual accounts of EDP Renováveis comprise the assets, liabilities and results of EDP Renováveis and its subsidiaries and the results and net equity from its associated companies attributable to the Group. These accounting policies have been consistently applied by all Group companies.
Investments in subsidiaries where the Group has control are fully consolidated from the date EDP Renováveis assumed control over the financial and operational activities until the moment that control ceases to exist. Control is presumed to exist when the Group owns more than half of the voting rights. Control also exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of the entity, so as to obtain benefits from its activities, even if its shareholding is less than 50%.
Accumulated losses of a subsidiary attributable to minority interest, which exceed the equity of the subsidiary attributable to the minority interest, are attributed to the Group and charged to the income statement when incurred. If the subsidiary subsequently reports profits, such profits are recognised as profits of the Group until the losses attributable to the minority interest previously recognised by the group have been recovered.
Investments in associates are accounted for by the equity method since the date on which significant influence is transferred to the Group until the date it ceases. Associates are entities over which the Group has significant influence, but not control, over its financial and operating policies. Generally when the Group holds more than 20% of the voting rights of the investor it is presumed that it has significant influence. If the Group holds, directly or indirectly, less than 20% of the voting rights of the investor it is presumed that the group does not have significant influence, except when such influence can be clearly demonstrated.
The significant influence by EDP Renováveis Group is normally demonstrated by one or more of the following ways:
The consolidated annual accounts include the Group's attributable share of total reserves and results of associated companies accounted under the equity method. When the Group's share of losses exceeds its interest in an associate, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued, except to the extent that the Group has a legal or constructive obligation of covering those losses or make payments on behalf of the associate.
Jointly controlled entities, consolidated under the proportionate consolidation method, are entities over whose activities the Group has joint control along with another company, under a contractual agreement. The consolidated annual accounts include the Group's proportionate share of the joint ventures' assets, liabilities, revenue and expenses, from the date the joint control begins until it ceases.
Following the transition to International Financial Reporting Standards (IFRS), adopted by the EDP Energias de Portugal Group as of 1 January 2004, and as permitted by IFRS 1 – First-time Adoption, the EDP Group opted to maintain the goodwill resulting from the business combinations that occurred prior to the transition date, calculated according to the previous accounting principles applied by the Group. This accounting policy was maintained when the holdings in NEO and Horizon were transferred to EDP Renováveis Group. As such, the goodwill booked on the EDP Renováveis consolidated annual accounts remained as it was on the EDP Energias de Portugal Group consolidated annual accounts on the date of the transfer (18 December 2007).
Business combinations occurring are recorded using the purchase method. According to this method, the acquisition cost is equivalent to the fair value of assets transferred and liabilities incurred or assumed on the purchase date, plus any costs directly attributable to the acquisition. The total amount of positive goodwill resulting from acquisitions is recognised as an asset and recorded at cost, not being subject to depreciation.
Goodwill arising on the acquisition of holdings in subsidiaries and associates is defined as the difference between the acquisition cost and the proportion of fair value of the identifiable assets, liabilities and contingent liabilities acquired by the Group.
The Group recognises as a liability the fair value of the liability related to minority interest acquired through written put options celebrated with those minority interest. Any differences between the minority interest acquired and the fair value of the liability, are recognised against goodwill.
The value of goodwill recognised as an asset is assessed annually to identify any impairment, regardless of the existence of any indication of impairment. Impairment losses are recognised in the year's income statement. The recoverable amount is determined based on the future economic benefits of the assets, which are calculated using valuation methods based on discounted cash flows techniques, considering market conditions, time value of money and business risks.
A liability is recognised for contingent consideration as soon as payment becomes probable and the amount can be measured reliably. The purchase price subsequently is adjusted against goodwill or negative goodwill as the estimate of the amount payable is revised.
Negative goodwill arising on an acquisition is recognised directly in the income statement in the period when the business combination occurs.
The annual accounts of the foreign subsidiaries and associates of the Group are prepared using their functional currency, defined as the currency of the primary economic environment in which they operate. In the consolidation process, the assets and liabilities of foreign subsidiaries are translated into Euros at the official exchange rate prevailing at the balance sheet date.
In relation to the foreign subsidiaries consolidated using the full consolidation, proportional or equity method, the exchange differences arising from the amount expressed in Euros of the opening balance of net assets at the beginning of the year and the translation to Euros of the opening balance of net assets using the year end exchange rate, are booked against reserves.
Goodwill from foreign operations is revaluated using the year end exchange rate, and booked against reserves.
The income and expenses of foreign subsidiaries are translated to Euros, at the approximate exchange rates ruling at the dates of the transactions. Exchange differences arising from the translation of the result for the reporting period from the exchange rate used in the income statement to the exchange rate prevailing at the balance sheet date are recognised in reserves.
On disposal of a foreign operation, exchange differences related thereto and previously booked against reserves are accounted in the income statement.
Inter-company balances and transactions, including any unrealised gains and losses on transactions between group companies, are eliminated in preparing the consolidated annual accounts. Unrealised gains and losses arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group's interest in those entities.
The accounting for transactions among entities under common control is excluded from IFRS 3. Consequently, in the absense of specific guidance, within IFRSs, the EDP Renováveis Group has developed an accounting policy for such transactions, as considered appropriate. According to the Group's policy, business combinations among entities under common control are accounted for in the consolidated annual accounts using the book values of the acquired company (subgroup). The difference between the carrying amount of the net assets received and the consideration paid, is recognised in equity.
EU-IFRS currently do not establish specific accounting treatment for commitments related to written put options related with investments in subsidiaries held by minority interests at the date of acquisition of a business combination. Nevertheless, the EDP Renováveis Group records these written put options at the date of acquisition of a business combination or at a subsequent date as an advance acquisition of these interests, recording a financial liability for the present value of the best estimate of the amount payable, irrespective of the estimated probability that the options will be exercised. The difference between this amount and the amount corresponding to the percentage of the interests held in the identifiable net assets acquired is recorded as goodwill. In the event that these written put options are engaged at a date subsequent to the acquisition of the business combination, the same accounting policy would be applied.
In years subsequent to initial recognition, the changes in the liability due to the effect of the financial discount are recognised as a financial expense in the consolidated income statement, and the remaining changes are recognised as an adjustment to the cost of the business combination. Where applicable, dividends paid to minority shareholders up to the date the options are exercised are also recorded as adjustments to the cost of the business combination. In the event that the options are not exercised, the transaction would be recorded as a sale of interests to minority shareholders.
Foreign currency transactions are translated at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into Euros at the foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on translation are recognised in the income statement.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate ruling at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into Euros at the foreign exchange rates ruling at the date the fair value was determined.
Derivative financial instruments are recognised on the trade date at fair value. Subsequently, the fair value of derivative financial instruments is re-measured on a regular basis, being the gains or losses on re-measurement recognised directly in the income statement, except for derivatives designated as hedging instruments. The recognition of the resulting gains or losses on re-measurement of the derivatives designated as hedging instruments depends on the nature of the risk being hedged and of the hedge model used.
The fair value of derivatives correspond to their quoted market prices, if available, or, in the absence of a market, are determined by external entities through the use of valuation techniques, including discounted cash flows models and option pricing models, as appropriate.
The Group uses financial instruments to hedge interest and foreign exchange risks resulting from its operational and financing activities. The derivate financial instruments that do not qualify for hedge accounting are recorded as for trading.
The derivatives that are designated as hedging instruments are recorded at fair value, being the gains and losses recognised in accordance with the hedge accounting model adopted by the Group. Hedge accounting is used when:
(i) At the inception of the hedge, the hedge relationship is identified and documented;
(ii) The hedge is expected to be highly effective;
(iii) The effectiveness of the hedge can be reliably measured;
(iv) The hedge is revalued on a on-going basis and is considered to be highly effective over the reporting period; and
(v) The forecast transactions hedged are highly probable and represent a risk to changes in cash flows that could affect the income statement.
Changes in the fair value of the derivative financial instruments that are designated as hedging instruments are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the risk being hedged. If the hedge no longer meets the criteria for hedge accounting, the accumulated gains or losses concerning the fair value of the risk being hedged are amortised over the period to maturity.
The effective portion of the changes in the fair value of the derivative financial instruments that are designated as hedging instruments in a cash flow hedge model is recognised in equity. The gains or losses relating to the ineffective portion of the hedging relationship are recognised in the income statement in the moment they occur.
The cumulative gains or losses recognised in equity are also reclassified to the income statement over the periods in which the hedged item will affect the income statement. When the forecast transaction hedge results in the recognition of a non-financial asset or liability, the gains or losses recorded in equity are included in the acquisition cost of the asset or liability.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss recognised in equity at that time stays recognised in equity until the hedged transaction also affects the income statement. When the forecasted transaction is no longer expected to occur, the cumulative gains or losses recognized in equity are recorded in the income statement.
The net investment hedge is applied on a consolidated basis to investments in subsidiaries in foreign currencies. The exchange differences recorded against exchange differences arising on consolidation are offset by the exchange differences arising from the foreign currency borrowings used for the acquisition of those subsidiaries. If the hedging instrument is a derivative, the gains or losses arising from fair value changes are also recorded agianst exchange differences arising on consolidation. The ineffective portion of the hedging relation is recognised in the income statement.
For a hedge relationship to be classified as such, in accordance with IAS 39, its effectiveness should be demonstrated. Therefore, the Group performs prospective tests at inception and retrospective tests on an on-going basis to demonstrate the effectiveness at each balance sheet date, demonstrating that any changes in the fair value of the hedged item (risk being hedged) are hedged by changes in the fair value of the hedging instrument. Ineffectiveness is recognised in the income statement in the moment it occurs.
The Group classifies its other financial assets at acquisition date in the following categories:
This category includes: (i) financial assets held for trading, which are those acquired principally for the purpose of being sold in the short term and (ii) financial assets that are designated at fair value through profit or loss at inception.
Available for sale investments are non-derivative financial assets (i) intended to be held for an indefinite period of time, or (ii) designated as available for sale at initial recognition.
Purchases and sales of: (i) financial assets at fair value through profit or loss and (ii) available for sale investments, are recognised on trade date, the date on which the Group commits to purchase or sell the assets.
Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, in which case these transaction costs are directly recognised in the income statement.
Financial assets are derecognised when (i) the contractual rights to receive their cash flows have expired, (ii) the Group has transferred substantially all risks and rewards of ownership or (iii) although retaining some, but not substantially all of the risks and rewards of ownership, the Group has transferred the control over the assets.
After initial recognition, financial assets at fair value through profit or loss are subsequently carried at fair value and gains and losses arising from changes in their fair value are included in the income statement in the period in which they arise.
Available for sale financial assets are also subsequently carried at fair value, however, gains and losses arising from changes in their fair value are recognised directly in equity, until the financial assets are derecognised or impaired, being the cumulative gains or losses previously recognised in equity recognised in the income statement. Foreign exchange differences arising from equity investments classified as available for sale are also recognised in equity, while foreign exchange differences arising from debt instruments are recognised in the income statement. Interest calculated using the effective interest rate method and dividends, are recognised in the income statement.
The fair values on quoted investments in active markets are based on current bid prices. For unlisted securities the Group determines the fair value through (i) valuation techniques, including the use of recent arm's length transactions or discounted cash flow analysis and (ii) valuation assumptions based on market information.
Financial instruments whose fair value cannot be reliably measured are carried at cost.
The Group does not reclassify, after initial recognition, a financial instrument into or out of the fair value through profit or loss category.
At each balance sheet date, an assessment is performed as to whether there is objective evidence that a financial asset or group of financial assets is impaired, namely when losses may occur in future estimated cash-flows of the financial asset or group of financial assets, and it can be reliably measured.
If there is objective evidence of impairment, the recoverable amount of the financial assets is determined, the impairment losses being recognised through the income statement.
A financial asset or a group of financial assets is impaired if there is objective evidence of loss as a result of one or more events that occurred after their initial recognition, such as: (i) for listed securities, a significant or prolonged decline in the fair value of the security below its cost, and (ii) for unlisted securities, when that event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets, that can be reliably estimated.
If there is objective evidence that an impairment loss on available for sale financial assets has been incurred, the cumulative loss recognised in equity, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the income statement, is taken to the income statement.
For debt instruments, if in a subsequent period, the amount of the impairment losses decrease, the previously recognised impairment losses are reversed through the income statement up to the acquisition cost, if the increase is objectively related to an event occurring after the impairment loss was recognised. For equity instruments, the impairment reversal is recognised in equity.
An instrument is classified as a financial liability when it contains a contractual obligation to transfer cash or another financial asset, independently from its legal form. These financial liabilities are recognised (i) initially at fair value less transaction costs and (ii) subsequently at amortised cost, using the effective interest rate method.
The Group derecognises the whole or part of a financial liability when the obligations included in the contract have been satisfied or the Group is legally released of the fundamental obligation related to this liability either through a legal process or by the creditor.
Where financial instruments are exchanged between the Group and the counterparty, or substantial modifications are made to initially recorded liabilities, the original financial liability is derecognised and a new financial liability is subsequently recognised, provided that these instruments are substantially different.
The Group considers that the terms are substantially different if the current value of cash flows discounted under the new terms, including any commission paid net of any commission received, and using the original effective interest rate to make the discount, differs by at least 10% of the current discounted value of cash flows remaining from the original financial liability.
If the exchange is recognised as a cancellation of the original financial liability, costs or commissions are taken to the consolidated income statement. Otherwise, costs or commissions adjust the book value of the liability and are amortised following the amortised cost method over the remaining term of the modified liability.
The Group recognises the difference between the carrying amount of a financial liability (or part of a financial liability which has been cancelled or transferred to a third party) and the consideration paid, which includes any asset transferred other than cash or the liability assumed, with a debit or credit to the consolidated income statement.
Borrowing costs that are directly attributable to the acquisition or construction of assets are capitalised as part of the cost of the assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that funds are borrowed generally, the amount of borrowing costs eligible for capitalisation are determined by applying a capitalisation rate to the expenditures on these assets. The capitalisation rate corresponds to the weighted average of the borrowing costs applicable to the borrowings of the enterprise that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalised during a period does not exceed the amount of borrowing costs incurred during the period.
The capitalisation of borrowing costs commences when expenditures for the asset are being incurred, borrowing costs have been incurred and activities necessary to prepare all or part of the assets for their intended use or sale are in progress. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying assets for their intended use or sale are completed. Capitalisation of borrowing costs shall be suspended during extended periods in which active development is interrupted.
Property, plant and equipment are stated at acquisition cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of acquisition includes interest on external financing and personnel costs and other internal expenses directly or indirectly related to work in progress accrued solely during the period of construction. The cost of production is capitalised by charging costs attributable to the asset as own work capitalised under other operating income and personnel costs and employee benefit expense in the consolidated income statement.
Subsequent costs are recognised as separate assets only when it is probable that future economic benefits associated with the item will flow to the Group. All repair and maintenance costs are charged to the income statement during the financial period in which they are incurred.
The Group assesses assets impairment, whenever events or circumstances may indicate that the book value of the asset exceeds its recoverable amount, the impairment being recognised in the income statement.
The recoverable amount is determined by the highest value between the net selling price and its fair value in use, this being calculated by the present value of estimated future cash-flows obtained from the asset and after its disposal at the end of its economic useful life.
Land is not depreciated. Depreciation on the other assets is calculated using the straight-line method over their estimated useful lives, as follows:
| Number of years |
|
|---|---|
| Buildings and other constructions | 20 to 33 |
| Plant and machinery | |
| Wind farm generation | 20 |
| Hydroelectric generation | 20 to 30 |
| Other plant and machinery | 15 to 40 |
| Transport equipment | 3 to 10 |
| Office equipment and tools | 3 to 10 |
| Other tangible fixed assets | 4 to 10 |
The other intangible assets of the Group are booked at acquisition cost less accumulated amortisation and impairment losses. The Group does not own intangible assets with indefinite lives.
The Group assesses for impairment, whenever events or circumstances may indicate that the book value of the asset exceeds its recoverable amount, the impairment being recognised in the income statement. The recoverable value is determined by the highest amount between its net selling price and its value in use, this being calculated by the present value of the estimated future cash-flows obtained from the asset and sale price at the end of its economic useful life.
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised on the basis of their expected useful lives.
Costs that are directly associated with the development of identifiable specific software applications by the Group, and that will probably generate economic benefits beyond one year, are recognised as intangible assets. These costs include employee costs directly associated with the development of the referred software and are amortised using the straight-line method during their expected useful lives.
Maintenance costs of software are charged to the income statement when incurred.
The amortisation of industrial property and other rights is calculated using the straight-line method for an expected useful live expected of less than 6 years.
The carrying amounts of the Group's non-financial assets such as investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is then estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units which are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in circumstances that caused the impairment. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Operating leases
Lease payments are recognised as an expense and charged to the income statement in the period to which they relate.
Inventories are stated at the lower of the acquisition cost and net realisable value. The cost of inventories includes purchases, conversion and other costs incurred in bringing the inventories to their present location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated selling costs.
The cost of inventories is assigned by using the weighted average method.
Accounts receivable are initially recognised at their fair value and subsequently are measured at amortised cost less impairment losses.
Impairment losses are recorded based on the valuation of estimated losses from non-collection of accounts receivable at the balance sheet date. Impairment losses are recognised in the income statement, and can be reversed if the estimated losses decrease in a later period.
Enernova, one of the portuguese companies of EDP Renováveis Group attribute post-retirement plans to their employees under defined benefit plans and defined contribution plans, namely, pension plans that pay complementary old-age, disability and surviving-relative pension complements, as well as early retirement pensions.
In Portugal, the defined benefits plan is financed through a restricted Pension Fund complemented by a specific provision. This Pension Fund covers liabilities for retirement pension complements as well as liabilities for early retirement.
The pension plans of the Group companies in Portugal are classified as defined benefit plans, since the criteria to determine the pension benefit to be received by employees on retirement is predefined and usually depend on factors such as age, years of service and level of salary at the age of retirement.
The liability of the Group with pensions is calculated annually, at the balance sheet date for each plan individually, by qualified actuaries using the projected unit credit method. The discount rate used in this calculation is determined by reference to interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liabilities.
Actuarial gains and losses determined annually and resulting from (i) the differences between financial and actuarial assumptions used and real values obtained and (ii) changes in the actuarial assumptions are recognised against equity, in accordance with the alternative method defined by IAS 19, revised on 16 December 2004.
The increase in past service costs arising from early retirements (retirements before the normal age of retirement) is recognised in the income statement when incurred.
Annually the Group recognises as cost in the income statement the net amount of, (i) the current service cost, (ii) the interest cost, (iii) the estimated return of the fund assets and (iv) the cost arising from early retirements.
The plan assets are recognised according to the conditions established by IFRIC 14 - IAS 19 and the minimum financing requirements defines legally or under a contract.
In Spain and Portugal, some Group Companies have social benefit plans of defined contribution that complement those granted by the social welfare system to the companies employees, under which they pay a contribution to these plans each year, calculated in accordance with the rules established in each plan. The cost related to defined contribution plans is recognised in the results in the period in which the contribution is made.
In Portugal some Group companies provide medical care during the period of retirement and early retirement, through complementary benefits to those provided by the Social Welfare System. These medical care plans are classified as defined benefit plans. The present value of the defined benefit obligation at the balance sheet date is recognised as a defined benefit liability. Measurement and recognition of the liability with healthcare benefits is similar to the measurement and recognition of the pension liability for the defined benefit plans, described above.
In accordance with the by-laws of certain Group entities, annually the shareholders approve in the annual general meeting a percentage of profits to be paid to the employees (variable remuneration), following a proposal made by the Board of Directors. Payments to employees are recognised in the income statement in the period to which they relate.
Provisions are recognised when: (i) the Group has a present legal or constructive obligation, (ii) it is probable that settlement will be required in the future and (iii) a reliable estimate of the obligation can be made.
The Group recognises dismantling and decommissioning provisions for property, plant and equipment when a legal or contractual obligation is setlled to dismantling and decommissioning those assets at the end of their useful life. Consequently, the Group has booked provisions for property, plant and equipment related with wind turbines, for the expected cost of restoring sites and land to its original condition. The provisions correspond to the present value of the expenditure expected to be required to settle the obligation and are recognised as part of the initial cost or an adjustment to the cost of the respective asset, being depreciated on a straight-line basis over the asset useful life.
Decommissioning and dismantling provisions are remeasured on an annual basis based on the best estimate of the settlement amount. The unwinding of the discount at each balance sheet date is charged to the income statement.
The assumptions used in the calculation of the provisions for dismantling and decommissioning are as follows:
| Horizon | NEO | |||
|---|---|---|---|---|
| Dec 2008 Dec 2008 |
Dec 20072007 Dec 2007 |
Dec 2008 Dec 2008Dec 2008 | Dec 2007 Dec 2007 | |
| Assumptions | ||||
| Average cost per MW (Euros) | - | - | 5,500 | 5,500 |
| Average cost per turbine (thousands of Euros) | 97,000 | 97,000 | - | - |
| Discount rate | 7.00% | 7.00% | 5.13% | 5.13% |
| Inflation rate | 2.50% | 2.50% | 2.20% | 2.20% |
| Capitalization period (nº of years) | 20 | 20 | 20 | 20 |
Costs and revenues are recorded in the year to which they refer regardless of when paid or received, in accordance with the accrual concept. Differences between amounts received and paid and the corresponding revenue and expenditure are recorded under other assets and other liabilities.
Revenue comprises the amounts invoiced on the sale of products or of services rendered, net of value added tax, rebates and discounts, after elimination of intra-group sales.
Revenue from electricity sales is recognised in the period that electricity is generated and transferred to customers.
Engeneering revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in profit or loss in proportion to the stage of completion of the contract.
Differences between estimated and actual amounts, which are normally not significant, are recorded during the subsequent periods.
Financial results include interest payable on borrowings, interest receivable on funds invested, dividend income, foreign exchange gains and losses, gains and losses on financial instruments and changes on fair value of the risk being hedged.
Interest income is recognised in the income statement based on the effective interest note method. Dividend income is recognised in the income statement on the date the entity's right to receive payments is established.
Financial results also include impairment losses on available for sale investments.
Income tax for the year includes current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Deferred taxes arising from the revaluation of cash flow hedge derivatives and financial assets available for sale recognised in shareholders' equity are recognised in the profit and loss in the period the results that originated the deferred taxes are recognized.
Current tax is the tax expected to be paid on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred taxes are calculated in accordance with the liability method based on the balance sheet, considering temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, using the tax rates enacted or substantively enacted at the balance sheet date for each jurisdiction and that is expected to be applied when the temporary difference is reversed.
Deferred tax liabilities are recognised for all taxable temporary differences except for goodwill not deductible for tax purposes, differences arising on initial recognition of assets and liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Deferred tax assets are recognised to the extent it is probable that future taxable profits will be available to absorb deductible temporary differences for taxation purposes.
Basic earnings per share are calculated by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding the average number of ordinary shares purchased by the Group and held as treasury stock.
For the diluted earnings per share, the weighted average number of ordinary shares outstanding is adjusted to assume conversion of all dilutive potential ordinary shares, such as convertible debt and share options granted to employees. Potential or contingent share issuances are treated as dilutive when their conversion to shares would decrease net earnings per share.
Non-current assets or disposal groups (groups of assets and related liabilities that include at least a non-current asset) are classified as held for sale when their carrying amounts will be recovered principally through sale and the assets or disposal groups are available for immediate sale and its sale is highly probable.
The Group also classifies as non-current assets held for sale those non-current assets or disposal groups acquired exclusively with a view to its subsequent disposal, that are available for immediate sale and its sale is highly probable.
Immediately before classification as held for sale, the measurement of the non-current assets or all assets and liabilities in a disposal group, is adjusted in accordance with the applicable IFRS. Subsequently, these assets or disposal groups are measured at the lower of their carrying amount at fair value less costs to sell.
For the purposes of the cash flow statement, cash and cash equivalents include balances with maturity less than three months from the balance sheet date, including cash and deposits with banks.
The Group classified cash flows related to interest and dividends received and paid as investment and financing activities, respectively.
A business segment is a distinguishable component of an entity that is engaged in providing an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business segments.
A geographical segment is a distinguishable component of an entity that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments.
Government grants are recognised initially as deferred income under non-current liabilities when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in profit or loss on a systematic basis over the useful life of the asset.
The IFRSs set forth a range of accounting treatments and require the Board of Directors to apply judgment and make estimates in deciding which treatment is most appropriate.
The main accounting estimates and judgements used in applying the accounting policies are discussed in this note in order to improve the understanding of how their application affects the Group's reported results and disclosures. A broader description of the accounting policies employed by the Group is disclosed in Note 2 to the Consolidated Annual Accounts.
Considering that in many cases there are alternatives to the accounting treatment adopted by the Executive Board of Directors, the Group's reported results could differ if a different treatment was chosen. The Executive Board of Directors believes that the choices made are appropriate and that the annual accounts are presented fairly, in all material respects, the Group's financial position and results. The alternative outcomes discussed below are presented solely to assist the reader in understanding the annual accounts and are not intended to suggest that other alternatives or estimates would be more appropriate.
The Group determines that available for sale investments are impaired when there has been a significant or prolonged decline in the fair value below its cost.
This determination of what is significant or prolonged requires judgment. In making this judgment, the Group evaluates among other factors, the normal volatility in share price. In addition, valuations are generally obtained through listed market prices or valuation models that may require assumptions or judgment in making estimates of fair value.
Alternative methodologies and the use of different assumptions and estimates could result in a higher level of impairment losses recognised with a consequent impact in the income statement of the Group.
Fair values are based on listed market prices, if available, otherwise fair value is determined either by dealer prices (both for that transaction or for similar instruments traded) or by pricing models, based on net present value of estimated future cash flows which take into account market conditions for the underlying instruments, time value, yield curves and volatility factors. These pricing models may require assumptions or judgments in estimating fair values.
Consequently, the use of a different model or of different assumptions or judgments in applying a particular model may have produced different financial results for a particular period.
The Group regularly reviews the useful life of its electrical generation installations in order to bring it into line with the technical and economic measurements of the installations, taking into consideration their technological capacity and prevailing regulatory restrictions.
Impairment test are performed whenever there is an indication that the recoverable amount of property, plant, equipment and intangible assets is less than the corresponding net book value of assets.
The recoverable amount of the goodwill from investments in subsidiaries recognised as an asset is reviewed annually, regardless of whether there is any indication of impairment, and goodwill from associates is tested when there is any indication of impairment.
Considering that estimated recoverable amounts related to property, plant and equipment, intangible assets and goodwill are based on the best information available, changes in the estimates and judgments could change the impairment test results which could affects the Group's reported results.
Impairment losses related to Doubtful debts are estimated by the Board of Directors based on the estimated recoverable amounts, the date of default, debt write offs and other factors. Certain circumstances and facts may change the estimated impairment losses of Doubtful debts, namely changes in the economic environment, economic sector trends, client's credit risk and increases in the rate of defaults. The evaluation process in determining whether an impairment loss should be recorded in the income statement is subject to numerous estimates and judgment. Changes in the estimates and judgments could change the impairment test results which could affect the Group's reported results.
Revenue from electricity sales is recognised when electricity is generated and transferred to customers. Estimates of electricity consumed and not invoiced until the end of the period are recognised based on average consumptions from previous periods and analysis to the electricity suppliance activity.
Alternative estimates could affect the Group's reported revenues and consequently the Group's reported results.
The Group is subject to income taxes in numerous jurisdictions. Significant interpretations and estimates are required in determining the global amount for income taxes.
There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Different interpretations and estimates would result in a different level of income taxes, current and deferred, recognised in the period.
Tax Authorities are entitled to review the EDP Renováveis, and its subsidiaries' determination of its annual taxable earnings, for a determined period that may be extended in case there are tax losses carried forward. Therefore, it is possible that some additional taxes may be assessed, mainly as a result of differences in interpretation of the tax law. However, the Board of Directors of EDP Renováveis, and those of its subsidiaries, are confident that there will be no material tax assessments within the context of the annual accounts.
Determining pension liabilities requires the use of assumptions and estimates, including the use of actuarial projections, estimated returns on investment, discount rates, salaries and social security increases and other factors that could impact the cost and liability of the pension and medical plans. Changes in these assumptions could materially affect these values.
The Board of Directors considers that Group has contractual obligations with the dismantling and decommissioning of property, plant and equipment related to wind electricity generation. For these responsibilities the Group has recorded provisions for the expected cost of restoring sites and land to its original condition. The provisions correspond to the present value of the expenditure expected to be required to settle the obligation.
The Board of Directors considers that no contractual or constructive obligations arise from regulatory and legal requirements of Group's activity that demands the recognition of a provision for dismantling and decommissioning for the remaining electricity generating centres of EDP Renováveis Group.
The use of different assumptions in estimates and judgments referred may have produced different results from those that have been considered.
The businesses of EDP Renováveis Group are exposed to a variety of financial risks, including the effects of changes in market prices, foreign exchange and interest rates. The main financial risks lie essentially in its debt portfolio, arising from interest-rate and the exchange-rate exposures. The unpredictability of the financial markets is analysed on an on-going basis in accordance with the EDP Group's risk management policy. Financial instruments are used to minimize potential adverse effects resulting from the interest rates and foreign exchange rates risks on EDP Renováveis financial performance.
The Board of Directors of EDP Renováveis is responsible for the definition of general risk-management principles and the establishment of exposure limits. The operational management of financial risks of EDP Renováveis Group is outsourced to the Finance Department of EDP - Energias de Portugal, S.A., in accordance with the policies approved by the Board of Directors. The outsourcing service includes identification and evaluation of hedging mechanisms appropriate to each exposure.
All transactions undertaken using derivative financial instruments require the prior approval of the Board of Directors, which defines the parameters of each transaction and approves the formal documents describing their objectives.
EDP Renováveis Group operates internationally and is exposed to the exchange-rate risk resulting, mainly, from investments in subsidiaries whose functional currency is the US Dollar (USD). Currently, the exposure to the USD/EUR currency fluctuation risk results mainly from the shareholding in Horizon.
EDP Group's Finance Department is responsible for monitoring the evolution of the USD, seeking to mitigate the impact of currency fluctuations on the financial results and/or equity of the Group, using exchange-rate derivatives and/or other hedging structures.
The policy implemented by the EDP Renováveis Group consists of undertaking derivative financial instruments for the purpose of hedging foreign exchange risks with characteristics similar to those of the hedged item. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that gave rise to them is evaluated.
Some operations result in an exposure to exchange rate risk due to the fact that they are accounted for as held for trading, although the actual purpose of these operations is to fix the price in the foreign exchange component related to future acquisitions of turbines.
As a consequence, in relation to Horizon, a depreciation/appreciation of 10% in the Dolar, with reference to 31 December 2008 and 2007, would originate an increase/(decrease) in EDP Renováveis Group income statement, as follows:
| 2008 2008 Euro'000 Euro'000 |
2007 2007 Euro'000 Euro'000 |
|||
|---|---|---|---|---|
| +10% +10% |
-10% -10% |
+10% | -10% | |
| USD / EUR | 8,349 | -10,205 | 5,620 | -6,869 |
| 8,349 | -10,205 | 5,620 | -6,869 |
This analysis assumes that all other variables, namely interest rates, remain unchanged.
As at 31 December 2008, EDP Renováveis Group has no significant exposure to foreign exchange rate risks.
The Group's operating and financial cash flows are substantially independent from the fluctuation in interest-rate markets.
The purpose of the interest-rate risk management policies is to reduce the financial charges and the exposure of debt cash flows to market fluctuations. As such, whenever considered necessary and in accordance to the Group's policy, the Group contracts derivative financial instruments to hedge interest rate risks.
In the floating-rate financing context, the Group contracts interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating-interest rate loans into fixed-interest rate loans.
All these operations are undertaken on liabilities in the Group's debt portfolio and are mainly perfect hedges with a high correlation between changes in fair value of the hedging instrument and changes in fair value of the interest-rate risk or upcoming cash flows.
The EDP Renováveis Group has a portfolio of interest-rate derivatives with maturities between 1 and 11 years. The Group's Financial Department undertakes sensitivity analyses of the fair value of financial instruments to interest-rate fluctuations.
The management of interest rate risk associated to activities developed by the Group is outsourced to the Financial Department of EDP Group, contracting derivative financial instruments to mitigate this risk.
Based on the debt portfolio of the NEO Group and the related derivative financial instruments used to hedge associated interest rate risk, as well as on the shareholder loans received by EDP Renováveis, a change of 100 basis points in the interest rates with reference to 31 December 2008 and 31 December 2007 would increase / (decrease) equity and results of EDP Renováveis Group in the following amounts (in thousands of Euros):
| 31 Dec 2008 | |||||
|---|---|---|---|---|---|
| Profit or loss | Equity | ||||
| 100 pb pb increase increase |
100 pb 100 pb decreasedecrease decrease |
100 pb increase increaseincrease |
100 pb decrease decrease |
||
| Cash flow hedge derivatives | - | - | 10,621 | -11,109 | |
| Unhedged debt (variable interest rates) | -1,433 | 1,433 | - | - | |
| -1,433 | 1,433 | 10,621 | -11,109 | ||
| 31 Dec 2007 | |||||
| Profit or loss | Equity | ||||
| 100 pb pb increase increase |
100 pb 100 pb decrease decrease |
100 pb increase increase |
100 pb decrease |
||
| Cash flow hedge derivatives | - | - | 11,123 | -11,165 | |
| Unhedged debt (variable interest rates) | -942 | 942 | - | - | |
| -942 | 942 | 11,123 | -11,165 |
This analysis assumes that all other variables, namely foreign exchange rates, remain unchanged.
As at 31 December 2008 and 31 December 2007, Horizon has no significant exposure to interest rate risks.
The EDP Renováveis Group policy in terms of the counterparty risk on financial transactions with companies outside EDP Group is managed by an analysis of the technical capacity, competitiveness, credit rating and exposure to each counter-party. Counterparties in derivatives and financial transactions are restricted to highquality credit institutions.
The EDP Renováveis Group documents financial operations according to international standards. Most operations with derivative financial instruments are engaged under ISDA Master Agreements, to assure a greater flexibility in the transfer of the instruments in the market.
In the specific case of the NEO Group, credit risk is not significant due to the limited average collection period for customer balances and the quality of its debtors. The Group's main customers are operators and distributors in the energy market of their respective countries (OMEL and MEFF in the case of the Spanish market).
The Board of Directors believe that the amount that best represents the Group's exposure to credit risk corresponds to the carrying amount of Trade receivables and Other debtors, net of the impairment losses recognised. The Group believes that the credit quality of these receivables is adequate and that no significant impaired credits exist that have not been recognised as such and provided for.
Liquidity risk is the possibility that the Group will not be able to meet its financial obligations as they fall due. The Group strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unaceptable losses or risking damage to the Group's reputation.
The adverse scenario of debt market could make it difficult to cover the financial requirements needed to carry out the Group's activities.
The liquidity policy followed ensures compliance with payment obligations acquired, through maintaining sufficient credit facilities and having access to the EDP Group credit facilities.
As at 31 December 2008, market price risk affecting the EDP Renovavéis Group is not significant. In the case of Horizon, prices are fixed and mainly determined by power purchase agreements. In the case of NEO the electricity is sold in Spain directly on the daily market at spot prices plus a pre-defined premium (regulated). Nevertheless, NEO has an option of selling the power through regulated tariffs, granting minimum prices. In the remaining countries, prices are mainly determined through regulated tariffs.
The Group's goal in managing equity, in accordance with the policies established by its main shareholder, is to safeguard the Group's capacity to continue operating as a going concern, grow steadily to meet established growth targets and maintain an optimum equity structure to reduce equity cost.
In order to maintain and adjust its equity structure, the Group could adjust the amount of dividends to be distributed to shareholders.
In conformity with other sector groups, the Group controls its financing structure based on the leverage ratio. This ratio is calculated as net financial borrowings divided by total equity and net borrowings. Net financial borrowings are determined as the sum of financial debt, institutional equity liabilities corrected for non-current deferred revenues, less cash and cash equivalents.
Revenue is analysed by sector as follows: Revenue
| Group | ||||
|---|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 |
|||
| Revenue by sector of activity/business: | ||||
| Electricity | 514,039 | 13,653 | ||
| Other | 12,738 | 472 | ||
| 526,777 | 14,125 | |||
| Services rendered by sector of activity: | ||||
| Other | 5,652 | 238 | ||
| 532,429 | 14,363 | |||
| Total Revenue: | ||||
| Electricity | 514,039 | 13,653 | ||
| Other | 18,390 | 710 | ||
| 532,429 | 14,363 |
The breakdown of Revenue Revenue Revenue forthe Group, by geographic market, is as follows:
| 31 Dec 2008 | 31 Dec 2007 | ||||||
|---|---|---|---|---|---|---|---|
| United | United | ||||||
| Europe Europe |
States States |
Total | Europe | States | Total | ||
| Electricity | 382,226 | 131,813 | 514,039 | 10,167 | 3,486 | 13,653 | |
| Other | 12,738 | - | 12,738 | 472 | - | 472 | |
| 394,964 | 131,813 | 526,777 | 10,639 | 3,486 | 14,125 |
Cost of consumed electricity and Changes in inventories and cost of raw material and consumables used Cost Changes in inventories and cost of raw material and consumables used Changes cost of material and is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Cost of consumed electricity | 993 | 158 |
| Changes in inventories and cost of raw material and consumables used: | ||
| Cost of consumables used | 17,160 | 7,939 |
| Other Changes in inventories | -5,909 | -7,437 |
| 12,244 | 659 |
Other operating income is Other operating incomeanalysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Supplementary income | 1,503 | 53 |
| Gains on fixed assets | 823 | 18 |
| Turbine availability income | 2,390 | - |
| Income from sale of interests in institutional partnerships - Horizon | 61,238 | 886 |
| Amortization of deferred income related to power purchase agreements | 18,272 | - |
| Other income | 5,298 | 792 |
| 89,524 | 1,749 |
Income from sale of interests in institutional partnerships - Horizon, includes revenue recognition related to production tax credits (PTC) and tax depreciations, related to projects Vento I and Vento II (see note 33).
The power purchase agreements between Horizon and its customers were valued, at the acquisition date, using discounted cash flow techniques. At that date, these agreements were valued based on market assumptions by approximately 120 million Euros (USD 190.4 million) and recorded as a non-current liability (note 33). This liability is amortised over the period of the agreements against other operating income. As at 31 December 2008, the amortization for the year amounts to 18,272 thousands of Euros.
Turbine availability income refers to compensation received from turbines suppliers when the measured average availability of turbines in activity, is less than 93% in the first six months and/or less than 97% in any of the subsequent periods of six months during the warranty period.
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Supplies and services: | ||
| Water, electricity and fuel | 1,808 | 50 |
| Tools and office material | 1,628 | 38 |
| Leases and rents | 19,196 | 506 |
| Communications | 1,686 | 68 |
| Insurance | 6,009 | 185 |
| Transportation, travelling and representation | 6,258 | 152 |
| Commissions and fees | 574 | - |
| Maintenance and repairs | 40,251 | 325 |
| Advertising | 2,223 | 40 |
| Specialised work | 25,181 | 1,426 |
| Other supplies and services | 2,133 | 137 |
| 106,947 | 2,927 |
Personnel costs Personnel costsis analysed as follows:
| Group | |||
|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 |
||
| Management remuneration | 414 | 5 | |
| Employees' remuneration | 32,426 | 928 | |
| Social charges on remunerations | 5,095 | 105 | |
| Employee's variable remuneration | 14,257 | 574 | |
| Employee's benefits | 1,501 | 104 | |
| Other costs | 2,823 | 41 | |
| Own work capitalised | -19,505 | -758 | |
| 37,011 | 999 |
The average breakdown by management positions and professional category of the permanent staff (annual average) as of 31 December 2008 and 31 December 2007 is as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 |
|
| Board members | 14 | 11 |
| Senior management / Senior officers | 44 | 47 |
| Middle management | 108 | 190 |
| Highly-skilled and skilled employees | 177 | 177 |
| Semi-skilled workers | 214 | 38 |
| 557 | 463 |
The number of employees includes Management and all the employees of all the companies included in the consolidation perimeter (full or proportionate method), regardless of the EDP Renováveis holding in the share capital.
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Costs with pension plan Costs with medical care plan and other benefits |
1,085 5 |
22 1 |
| 1,090 | 23 |
As at 31 December 2008, the balance Costs with pension plan is related to defined contribution plan expense (1,080 thousands of Euros) and defined benefit plans (5 thousands of Euros).
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Direct operating taxes | 8,574 | 109 |
| Indirect taxes | 4,047 | 71 |
| Impairment loss on debtors and other assets | 38 | 3 |
| Losses on fixed assets | 2,289 | 506 |
| Operating indemnities | 2 | - |
| Lease costs related to the electricity generating centres | 4,343 | - |
| Donations | 1,988 | 14 |
| Amortizations of Deferred O&M cost | 1,629 | - |
| Rents | 1,512 | - |
| Turbine availability bonus | 255 | - |
| Other costs and losses | 2,107 | 89 |
| 26,784 | 792 |
As discussed in Note 6, the Horizon's assets and liabilities were revalued to reflect fair value as of EDP Group acquistion date. During this process, it was determined that certain of the Horizon's Operation and Maintenance (O&M) and Warranty contracts, which were executed prior to the EDP Group acquisition, were at lower than then current market prices. Accordingly, it was determined that these contracts constituted an asset to the Company and a non-current asset was recorded. This asset is amortized into other operating expense over the life of the associated contract.
During the period the Group did not incur in any research and development expenses.
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Property, plant and equipment: | ||
| Buildings and other constructions | 489 | 398 |
| Plant and machinery: | ||
| Hydroelectric generation | 83 | 3 |
| Thermoelectric generation | 460 | 16 |
| Wind generation | 201,500 | 6,022 |
| Other | 23 | - |
| Transport equipment | 140 | - |
| Office equipment | 1,600 | 38 |
| Other | 344 | - |
| 204,639 | 6,477 | |
| Other intangible assets: | ||
| Industrial property, other rights and other intangibles | 3,125 | 408 |
| 3,125 | 408 | |
| 207,764 | 6,885 | |
| Amortisation of deferred income (Government grants): Investment grants |
-696 | -468 |
| -696 | -468 | |
| 207,068 | 6,417 |
Gains / (losses) from the sale of financial assets , for the Group, are analysed as follows: Gains (losses) from of financial assets
| 31 Dec 2008 | 31 Dec 2007 | |||
|---|---|---|---|---|
| Disposal Disposal % |
Value Value Euro'000 |
Disposal DisposalDisposal % |
Value Euro'000 |
|
| Investments in subsidiaries and associates | ||||
| Marquesado del Solar, S.A. | 50% | 2,378 | 50% | 1,136 |
| Investigación y Desarollo de Energias Renovables, S.L. ("IDER") | 20% | -15 | 20% | -248 |
| 2,363 | 888 |
On 28 March 2008, Generaciones Especiales I S.L., a company in which NEO holds an 80% interest, authorised the sale of the subsidiary Marquesado del Solar, S.A. to Solar Millenium AG, a german company. The sale price amounted to 3.4 million Euros, originating a gain of 2.4 million Euros.
Other financial income and financial expenses are analysed as follows: Other financial income and
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Other financial income: | ||
| Interest income | 19,271 | 561 |
| Derivative financial instruments | ||
| Interest | 25,978 | - |
| Fair value | 1,692 | 157 |
| Foreign exchange gains | 223,960 | 237 |
| 270,901 | 955 | |
| Other financial expenses: | ||
| Interest expense | 93,851 | 5,210 |
| Derivative financial instruments | ||
| Fair value | 5,663 | 227 |
| Banking services | 530 | 6 |
| Foreign exchange losses | 227,272 | - |
| Own work capitalised (financial interests) | -39,176 | -699 |
| Unwinding | 57,922 | - |
| Other financial expenses | 2,058 | 178 |
| 348,120 | 4,922 | |
| Financial income / (expenses) | -77,219 | -3,969 |
Derivative financial instruments - Interest, relating to the interest liquidations result from the derivative financial instrument established between EDP Renováveis and EDP Branch (see notes 23 and 35).
Foreign exchange gains (223,960 thousands of Euros) and losses (227,272 thousands of Euros) as at 31 December 2008 are essentially related with the financings granted by EDP Branch to EDP Renováveis.
In acordance with the accounting policy described on note 2g), the borrowing costs (interest) capitalised in tangible fixed assets in progress as at 31 December 2008 amounted to 39,176 thousands of Euros (699 thousands of Euros as at 31 December 2007) and are included under Own work capitalised (financial interest). The implicit interest rates used for this capitalisation vary in accordance with the related loans, between 2.71% and 7.91%.
Interest expense refers to interest on loans which bear interest at market rates.
Unwinding expenses refers to financial update of provision for wind farms dismantling and commissioning in the amount of 2,157 thousands of Euros (see note 32), financial update of the liability related with put option Genesa and Desa in the amount of 12,134 thousands of Euros (see note 33) and implied return in institutional partnership in US wind farms in the amount of 43,631 thousands of Euros (see note 33).
In accordance with prevailing legislation, tax returns are subject to review and correction by the tax authorities during subsequent years. In Portugal and Spain this period is four years, and 2004 is the last year considered to be definitively reviewed by the tax authorities. In the United States of America, generally, the statute to the issuance by tax authorities (IRS) of a tax additional liquidation is three years from the date of settlement of the annual tax declaration of a company.
Tax losses generated in each year, also subject to inspection and adjustment, may be deductible from taxable profits during subsequent years (6 years in Portugal, 15 years in Spain and 20 years in the EUA). The breakdown of tax losses carried forward and the respective expiration date are presented in Note 20. The companies of the EDP Renováveis Group are taxed, whenever possible, on a consolidated basis allowed by the tax law of the respective countries.
Nuevas Energías de Occidente, S.L. and its subsidiary companies file individual tax declarations in accordance with prevailing tax legislation. Nevertheless, the main Group companies pay income tax following the specific principles of the Special Tax Consolidation Regime, contained in articles 64 and 82 of Royal Legislative Decree 4/2004 whereby the revised corporate income tax law was approved.
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Current tax Deferred tax |
-55,047 6,068 |
- -47 |
| -48,979 | -47 |
The reconciliation between the nominal and the effective income tax rate for the Group as at 31 December 2008, is analysed as follows:
| 31 Dec 2008 | |||
|---|---|---|---|
| Rate Rate % % |
Tax basis basis Tax basis Euro '000 '000 Euro '000 |
Tax Euro '000 |
|
| Nominal rate and income tax (in parent company) | 30.00% | 161,197 | 48,359 |
| Non deductible provisions for tax purposes | 190 | 57 | |
| Unrecognised deferred tax assets related to tax losses generated in the year | -0.20% | -837 | -251 |
| Tax exempt dividends | 1.30% | 6,947 | 2,084 |
| Tax benefits | 0.60% | 2,578 | 970 |
| Fair value of financial instruments and financial investments | 6.20% | 26,739 | 10,062 |
| Difference between tax and accounting gains/losses | 0.80% | 3,255 | 1,225 |
| Financial investments in associates and subsidiaries | -0.80% | -4,443 | -1,333 |
| Autonomous taxation and tax benefits | 75 | 20 | |
| Deferred taxes unrecognised in financial statements | 31.80% | 199,010 | 51,317 |
| Tax effect of operations with institutional partnerships | -23.50% | -100,795 | -37,929 |
| Depreciation without tax effect | -15.10% | -93,765 | -24,274 |
| Tax differential and other adjustments | -0.80% | -4,204 | -1,328 |
| Effective tax rate and total income tax | 30.30% | 195,947 | 48,979 |
The income tax rates in the countries in which the EDP Renováveis Group operates are as follows:
| Tax rate | |||||
|---|---|---|---|---|---|
| Country Country |
SubgroupSubgroup Subgroup |
2008 | Subsequent years |
||
| Spain | NEO | 30.00% | 30.00% | ||
| Portugal | NEO | 26.50% | 26.50% | ||
| France | NEO | 33.00% | 33.00% | ||
| Poland | NEO | 19.00% | 19.00% | ||
| Belgium | NEO | 33.99% | 33.99% | ||
| United States | Horizon | 37.63% | 37.63% |
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Cost: | ||
| Land and natural resources | 11,739 | 4,589 |
| Buildings and other constructions | 10,855 | 241,920 |
| Plant and machinery: | ||
| Hydroelectric generation | 2,619 | 2,619 |
| Thermoelectric cogeneration | 6,008 | 6,008 |
| Wind generation | 5,227,721 | 2,640,479 |
| Other plant and machinery | 247 | 247 |
| Transport equipment | 686 | 332 |
| Office equipment and tools | 9,378 | 5,091 |
| Other tangible fixed assets | 7,334 | 27,754 |
| Assets under construction | 2,293,879 | 2,303,822 |
| 7,570,466 | 5,232,861 | |
| Accumulated depreciation: | ||
| Depreciation and amortisation expense for the period | -204,639 | -6,477 |
| Accumulated depreciation | -313,044 | -300,084 |
| -517,683 | -306,561 | |
| Carrying amount | 7,052,783 | 4,926,300 |
The balance of Assets under construction for 31 December 2007 has been reclassified due to Relax Winds Group purchase price allocation carried out in 2008, in the amount of 86,818 thousands of Euros (see note 16).
The movement in Property, plant and equipment Property, plant and equipmentProperty, plant equipment from 31 December 2007 to 31 December 2008, is analysed as follows:
| Balance 1 January January Euro'000 Euro'000 |
AcquisitionsAcquisitions Acquisitions Euro'000Euro'000 Euro'000 |
Disposals Disposals Disposals Euro'000 Euro'000Euro'000 |
Transfers TransfersTransfers Euro'000 Euro'000Euro'000 |
Exchange Exchange Differences DifferencesDifferences Euro'000 Euro'000Euro'000 |
Business Combinations/ Combinations/ Regularisations RegularisationsRegularisations Euro'000 Euro'000Euro'000 |
Balance 31 December 31 December Euro'000 Euro'000 |
|
|---|---|---|---|---|---|---|---|
| Cost: | |||||||
| Land and natural resources | 4,589 | - | -2,886 | 6 | -781 | 10,811 | 11,739 |
| Buildings and other constructions Plant and machinery: |
241,920 | 2,898 | - | -233,333 | -630 | - | 10,855 |
| Hydroelectric generation | 2,619 | - | - | - | - | - | 2,619 |
| Thermoelectric cogeneration | 6,008 | - | - | - | - | - | 6,008 |
| Wind generation | 2,640,479 | 13,427 | -8,524 | 2,353,325 | 152,953 | 76,061 | 5,227,721 |
| Other plant and machinery | 247 | - | - | - | - | - | 247 |
| Transport equipment | 332 | 308 | - | - | 33 | 13 | 686 |
| Office equipment and tools | 5,091 | 1,971 | -3 | 1,470 | 222 | 627 | 9,378 |
| Other | 27,754 | 47,236 | -109 | 629 | 38 | -68,214 | 7,334 |
| Assets under construction | 2,303,822 | 2,067,408 | -4,600 | -2,122,097 | 47,461 | 1,885 | 2,293,879 |
| 5,232,861 | 2,133,248 | -16,122 | - | 199,296 | 21,183 | 7,570,466 |
| Balance Balance 1 January January Euro'000 Euro'000 |
Charge Charge for the periodperiod for the period Euro'000 Euro'000 |
Impairment Losses / / Reverses Reverses Euro'000 Euro'000 |
Disposals Disposals Euro'000 Euro'000 |
Exchange Exchange Differences DifferencesDifferences Euro'000 Euro'000Euro'000 |
Business Combinations/ Combinations/ Regularisations Regularisations Euro'000 Euro'000 |
Balance 31 December 31 Euro'000 Euro'000 |
|
|---|---|---|---|---|---|---|---|
| Accumulated depreciation and impairment losses |
|||||||
| Buildings and other constructions Plant and machinery: |
3,780 | 489 | - | - | 5 | -2,538 | 1,736 |
| Hydroelectric generation | 1,360 | 83 | - | - | - | - | 1,443 |
| Thermoelectric cogeneration | 5,357 | 460 | - | - | - | - | 5,817 |
| Wind generation | 286,419 | 201,500 | -278 | -27 | 6,817 | 5,494 | 499,925 |
| Other plant and machinery | 191 | 23 | - | - | - | - | 214 |
| Transport equipment | 114 | 140 | 10 | 2 | 266 | ||
| Office equipment and tools | 2,822 | 1,600 | -1 | 59 | -224 | 4,256 | |
| Other | 6,518 | 344 | -41 | -21 | 18 | -2,792 | 4,026 |
| 306,561 | 204,639 | -320 | -48 | 6,909 | -58 | 517,683 |
Plant and Machinery includes the cost of the wind farms under operation.
The movement for the period from 4 to 31 December 2007 corresponds mainly to the contribution of NEO and Horizon made on 18 December 2007.
Assets under construction as at 31 December 2008 and 31 December 2007 are analysed as follows: Assets construction
| Group | ||||
|---|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|||
| Electricity business: | ||||
| NEO Group | 891,131 | 1,065,835 | ||
| Horizon Wind Energy Group | 1,402,388 | 1,237,987 | ||
| EDP Renováveis | 296 | - | ||
| EDP Renováveis Brasil | 64 | - | ||
| 2,293,879 | 2,303,822 |
Assets under construction as at 31 December 2008 and 31 December 2007 for NEO and Horizon Group are essentially related to wind farms under construction and development.
Financial interests capitalised amount to 39,176 thousands of Euros in 31 December 2008 and 699 thousands of Euros in 31 December 2007.
The EDP Renováveis Group has lease and purchase obligations as disclosed in Note 36 - Commitments below.
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 Euro'000 |
|
| Cost: | ||
| Industrial property, other rights and other intangible assets | 33,521 | 29,677 |
| Intangible assets under development | 2,840 | 3,781 |
| 36,361 | 33,458 | |
| Accumulated amortisation: | ||
| Depreciation and amortisation expense for the period | -3,125 | -408 |
| Accumulated depreciation | -10,828 | -10,092 |
| -13,953 | -10,500 | |
| Carrying amount | 22,408 | 22,958 |
Industrial property, other rights and other intangible assets include 18,022 thousands of Euros and 14,408 thousands of Euros related to wind generation licenses of Portuguese companies and Horizon Group, respectively.
Intangible assets under development are essentially related to advances for electricity wind generation licenses acquisition.
The movement in Intangible assets during 2008, is analysed as follows:
| Cost: Industrial property, other rights and other intangible assets 29,677 295 - 2,744 795 10 33,521 Intangible assets under development 3,781 - -941 - - - 2,840 33,458 295 -941 2,744 795 10 36,361 Business Balance at Balance at Charge Charge Exchange Exchange Combinations/ Combinations/ Balance at Balance at 1 January January for the year year for the year Disposals Disposals Disposals Transfers Transfers differences differences Regularisations Regularisations 31 December 31 Euro'000 Euro'000 Euro'000Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Accumulated amortisation: Industrial property, other rights and |
Balance at 1 January January Euro'000 Euro'000 |
AcquisitionsAcquisitions Acquisitions Euro'000Euro'000 Euro'000 |
Disposals Disposals Disposals Euro'000 Euro'000 |
Transfers TransfersTransfers Euro'000 Euro'000 |
Exchange Exchange differences differencesdifferences Euro'000 Euro'000 |
Business Combinations/Combinations/ Combinations/ Regularisations RegularisationsRegularisations Euro'000 Euro'000 |
Balance at Balance at 31 December 31 December Euro'000 |
|
|---|---|---|---|---|---|---|---|---|
| other intangible assets | -10,500 | -3,125 | - | -205 | -110 | -13 | -13,953 | |
| -10,500 -3,125 - -205 -110 -13 -13,953 |
For the Group, the breakdown of Goodwill GoodwillGoodwill resulting from the difference between the cost of the investments and the corresponding share of the fair value of the net assets acquired, is analysed as follows:
| Group | ||||
|---|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|||
| Electricity business: | ||||
| Goodwill booked in NEO Group | 802,611 | 661,817 | ||
| Goodwill booked in Horizon Wind Energy Group | 569,777 | 539,353 | ||
| 1,372,388 | 1,201,170 |
EDP Renováveis Group goodwill as at 31 December 2008 and 31 December 2007 is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Horizon group | 569,777 | 539,353 |
| Genesa group | 441,356 | 459,812 |
| Ceasa group | 146,469 | 141,949 |
| Relax Winds group (Poland) | 25,424 | 14,010 |
| Enernova group | 43,011 | 42,971 |
| NEO Galia SAS group | 45,104 | - |
| Hollywell group | 8,007 | - |
| Ridgeside group | 4,317 | - |
| Romania group | 64,461 | - |
| NEO Catalunia | 21,199 | - |
| Other | 3,263 | 3,075 |
| 1,372,388 | 1,201,170 |
The goodwill balance for Relax Winds group (Poland) included in NEO Group's as at 31 December 2007, in accordance with IFRS, has been reclassified due to purchase price allocation carried out in 2008, in the amount of 43,908 thousands of Euros (see information disclosed below in this note).
During the year 2008, the movements in Goodwill, by subgroup, are analysed as follows:
| Balance at 1 January January Euro'000 Euro'000 |
IncreasesIncreases Increases Euro'000Euro'000 Euro'000 |
Decreases DecreasesDecreases Euro'000 Euro'000 |
Impairment Impairment Impairment Euro'000 Euro'000 |
Other Euro'000 Euro'000 |
Perimeter Variations/ Variations/ Regularisations RegularisationsRegularisations Euro'000 Euro'000 |
Balance at Balance at 31 December 31 December Euro'000 |
|
|---|---|---|---|---|---|---|---|
| Electricity Business | |||||||
| Horizon group | 539,353 | - | - | - | 30,424 | - | 569,777 |
| Genesa group | 459,812 | 1,674 | (19,116) | - | - | (1,014) | 441,356 |
| Ceasa group | 141,949 | 8,484 | (3,964) | - | - | - | 146,469 |
| Relax Winds group (Poland) | 14,010 | 35,920 | (24,506) | - | - | - | 25,424 |
| Enernova group | 42,971 | 40 | - | - | - | - | 43,011 |
| NEO Galia SAS group | - | 52,472 | (7,368) | - | - | - | 45,104 |
| Hollywell group | - | 8,118 | (111) | - | - | - | 8,007 |
| Ridgeside group | - | 4,368 | (51) | - | - | - | 4,317 |
| Romania group | - | 64,461 | - | - | - | - | 64,461 |
| Neo Catalunia | - | 21,199 | - | - | - | - | 21,199 |
| Other | 3,075 | 188 | - | - | - | - | 3,263 |
| 1,201,170 | 196,924 | (55,116) | - | 30,424 | (1,014) | 1,372,388 |
Goodwill arising from the acquisition of the Horizon Wind Energy Group was determined in USD as at 31 December 2008 and amounts to 775,251 thousands of USD, corresponding to 569,777 thousands of Euros (31 December 2007: 539,353 thousands of Euros), including the related transaction costs in the amount of 12,723 thousands of Euros. The increase in Horizon group goodwill is essentially related with the effect from exchange differences of EUR/USD of 30,424 thousands of Euros.
The decrease in Genesa group goodwill is essentially related with the revaluation of put options of Caja Madrid over Genesa and Desa amounting to approximately 18,000 thousands of Euros.
On 8 April, 2008, NEO acquired in France the NEO Galia SAS subgroup from EOLE 76 and Eurocape, consisting of 3 wind farms in operation in the Normandy region, with a gross installed capacity of 35 MW and an average load factor of 27% and several wind farm projects under development, mostly located in the Normandy and Rhônes-Alpes regions, with an expected average load factor of 28%, representing a total capacity of 560 MW.
The cost of acquisition of the NEO Galia subgroup amounts to 43,088 thousands of Euros, which considering the subgroup's negative net assets of 480 thousands of Euros, originates a goodwill of 43,568 thousands of Euros. This amount includes 8,525 thousands of Euros corresponding to the best estimate of the additional success fees that will be paid for the wind farms that obtain construction licenses until 31 December, 2013. Additionally, during 2008 the interests held by Ridgeside and Hollywell in companies Bataille, Calengeville, Hetroye, Varimpre and Vatines have been transferred to Neo Galia through a share capital increase in kind, originating an increase of goodwill of 8,904 thousands of Euros, totalling 52,472 thousands of Euros of increase in goodwill during 2008.
The cost of acquisition of Hollywell amounts to 7,678 thousands of Euros, which, considering the company's negative assets of 440 thousands of Euros, originates goodwill of 8,118 thousands of Euros.
The cost of acquisition of Ridgeside amounts to 4,129 thousands of Euros, which considering the company's negative assets of 239 thousands of Euros, originates goodwill of 4,368 thousands of Euros.
In the purchase agreement signed by NEO for the acquisition of Relax Winds group included a call option for the purchase of 51% of other two companies of the same group (Relax Wind Park II e IV). In October 2008 the call option was exercised with an acquisition cost of 2,000 thousands of Euros, including a success fee of 1,900 thousands of Euros and has originated a goodwill of 2,000 thousands of Euros. Additionally, during December 2008 NEO has increased its interests in Relax Wind Park III and Relax Wind Park I to 93,3% and 100%, respectively, which originated a goodwill of 14,292 thousands of Euros.
During December 2008 NEO has made an analysis of the MW licensed for construction with the purpose of calculating the payable success fee. As a consequence NEO has paid an additional amount reflected in goodwill of 19,628 thousands of Euros.
Therefore the total increase in goodwill in Relax Winds group has been 35,920 thousands of Euros, during 2008.
On August 2008 Neo Catalunya, a 100% subsidiary of NEO, acquired from Copcisa Eléctrica, S.L.U. two companies, Bom Vent Corbera, S.L. and Bom Vent Vilalba, S.L., that own several wind farms in development stage, with an expected installed capacity of 99 MW. The acquisition cost was 21,370 thousands of Euros which resulted in a goodwill of 21,199 thousands of Euros.
Included in the purchase agreement of these companies, Copcisa Eléctrica, S.L.U. has a call option of a maximum of 49% of share capital from both companies, under the following terms:
On October 2008, EDP Renováveis group acquired 85% of share capital of Renovatio Power and Cernavoda Power, two romanian companies that own projects for wind power generation with a total capacity of 736 MW.
The acquisition cost was 64,435 thousands of Euros, including a sucess fee of 63,217 thousands of Euros. Considering the companies negative net asset of 26 thousands of Euros, the goodwill originated, amounted to 64,461 thousands of Euros. The purchase price allocation for this acquisition will be finalised during 2009.
EDP Renováveis, through its subsidiary NEO, holds a call option over Renovatio Group Limited for 10% of interest held by Renovatio Group Limited on companies Renovatio and Cernadova. The price of exercising these options is 5.39 Euros per share. The option can be exercised until 31 May 2009.
During 2008, the accounting value of assets, liabilities and contingent liabilities recognised at the date of acquisition for the above mentioned business combinations, are as follows:
| NEO Galia NEO Galia Group Group |
Hollywell Hollywell Hollywell Group Group |
Ridgeside Ridgeside Group |
Romania Romania Romania Group |
Neo Catalunia Group |
|
|---|---|---|---|---|---|
| Intangible assets Property, plant and equipment Financial investments Goodwill |
- 196 41,578 - |
1 26,684 - - |
1 14,631 - - |
- 11,221 - - |
- 2,851 21,795 - |
| Non-current assets | 41,774 | 26,685 | 14,632 | 11,221 | 24,646 |
| Current assets | 804 | 5,328 | 7,275 | 296 | 5,038 |
| Total assets | 42,578 | 32,013 | 21,907 | 11,517 | 29,684 |
| Medium and long term financial debt Other non-current term liabilities Current liabilities |
33,072 8,525 1,461 |
33,042 - 5,297 |
18,362 - 7,091 |
11,454 - 96 |
16,627 8,548 4,349 |
| Total liabilities | 43,058 | 38,339 | 25,453 | 11,550 | 29,524 |
| Net assets acquired | (480) | (6,326) | (3,546) | (33) | 160 |
Details of the combination cost, the net assets acquired and goodwill, for 2008 acquisitions are as follows:
| Relax Winds Relax Winds Group Group |
NEO Galia Galia Galia Group Group |
Hollywell Hollywell Group |
Ridgeside RidgesideRidgeside Group |
Romania Romania Group |
Neo Catalunia Neo Catalunia Group |
2008 Total |
|
|---|---|---|---|---|---|---|---|
| Combination cost | |||||||
| Amount paid (or attributed value) | 14,371 | 31,092 | 7,678 | 4,129 | - | 21,370 | 78,640 |
| Directly attributable costs | - | 3,471 | - | - | 1,218 | - | 4,689 |
| Contingent purchase price | 21,549 | 8,525 | - | - | 63,217 | - | 93,291 |
| Total combination cost | 35,920 | 43,088 | 7,678 | 4,129 | 64,435 | 21,370 | 176,620 |
| Book value of net assets acquired Goodwill (difference between the value of net |
- | (480) | (6,326) | (3,546) | (26) | 171 | (10,207) |
| assets acquired and cost of acquisition) | 35,920 | 43,568 | 14,004 | 7,675 | 64,461 | 21,199 | 186,827 |
Details of the combination cost, the net assets acquired and goodwill, for 2007 acquisitions are as follows:
| 2007 Relax Winds Group |
|
|---|---|
| Combination cost | |
| Amount paid (or attributed value) | |
| Directly attributable costs | 53,609 |
| Contingent purchase price | 2,521 |
| Total combination cost | 2,124 |
| 58,254 | |
| Book value of net assets acquired | |
| Goodwill (difference between the value of net | 336 |
| assets acquired and cost of acquisition) | |
| 57,918 |
As at 31 December 2008 the amounts pending to be paid related to these acquisitions are 46,279 thousands of Euros for the Relax Winds Group and 63,000 thousands of Euros for the Romanian companies.
During 2008 a purchase price allocation has been carried out for the Relax Winds Group. In accordance to IFRS 3, if the fair value of identifiable assets, liabilities or contingent liabilities are adjusted, then goodwill is adjusted with effect from the date of acquisition. Therefore, the Group has made the following restatements/reclassifications of 31 December 2007 balances:
| Relax Winds Group Euro'000 |
|
|---|---|
| Initial goodwill | 57,918 |
| Purchase price allocations changes: | |
| Property, plant and equipment (see note 14) | 86,818 |
| Deferred taxes (see note 20) | (14,924) |
| Minority interests (see note 29) | (27,986) |
| Goodwill | 14,010 |
Goodwill assigned to the acquisition of the Relax Winds Group has changed due to a purchase price allocation which has been carried out during 2008.
| Book value value Relax Winds Relax Winds Group Group |
2007 2007 Assets and Assets and Fair value value adjustments adjustments adjustments Relax Winds Winds Group Group |
2008 2008 Assets and Fair valuevalue Fair value adjustments adjustmentsadjustments Relax Winds Winds Group |
Assets and Assets and Liabilities Liabilities at fair value at fair value Relax Winds Group |
|
|---|---|---|---|---|
| Property, plant and equipment Other assets (including licenses) |
2,615 1,082 |
86,818 - |
- - |
89,433 1,082 |
| Total assets | 3,697 | 86,818 | - | 90,515 |
| Minority interests | - | 27,986 | (24,502) | 3,484 |
| Deferred tax liabilities Other liabilities |
- 3,108 |
14,924 - |
- - |
14,924 3,108 |
| Total minority interests and liabilities | 3,108 | 42,910 | (24,502) | 21,516 |
| Net assets at fair value | 65,515 | |||
| Acquisition cost | 94,423 | |||
| Goodwill | 28,908 |
Goodwill assigned to the acquisition of the Neo Galia Group, including Ridgeside and Hollywell, has changed due to a purchase price allocation which has been carried out during 2008.
| Book value value Neo Galia Galia Group Group |
Assets and Fair value value adjustmentsadjustments adjustments Neo Galia Galia Galia Group Group |
Assets and Assets and Liabilities Liabilities at fair value at fair value Neo Galia Group |
|
|---|---|---|---|
| Property, plant and equipment | 41,783 | 9,458 | 51,241 |
| Other assets (including licenses) | 55,175 | - | 55,175 |
| Total assets | 96,958 | 9,458 | 106,416 |
| Deferred tax liabilities | - | 2,090 | 2,090 |
| Other liabilities | 106,859 | - | 106,859 |
| Total liabilities | 106,859 | 2,090 | 108,949 |
| Net assets at fair value | (2,533) | ||
| Acquisition cost | 54,895 | ||
| Goodwill | 57,428 |
The amount of 96,276 thousands of Euros, resulting from recognition of the fair value of the projects operating and in development as of the acquisition date, was recognised under Property, plant and equipment. No value was attributed to projects in the research phase.
The goodwill of each of the subgroups of the Neo Group are tested for impairment, in the case of operational wind farms, by determining the recoverable value through the value in use of the different cash generating units (CGUs) comprising each of the subgroups of the Neo Group. In the case of wind farms at different stages of development, the recoverable value is determined using the fair value, less cost of sales.
The recoverable value of a CGU is determined based on calculations of the value in use. These calculations use cash flow projections based on financial budgets covering a period of five years approved by management. Cash flows after the five-year period are extrapolated using estimated growth rates. The growth rate does not exceed the average long-term growth rate of renewable energy generating businesses.
The method for determining the fair value of projects under development applied by the Neo Group is similar to that for determining the value in use of a CGU, adjusted for the probability of projects in development being completed and obtaining all the operating permits and licences.
The valuation analysis method used to evaluate the goodwill of NEO was based on a discounted cash flow model utilizing unlevered after-tax cash flows.
The valuation analysis method used to evaluate the goodwill of Horizon was based on a discounted cash flow model utilizing unlevered after-tax cash flows (i) generated from existing projects and (ii) those associated with the annual addition of 700 MW through 2020.
The assumptions used in goodwill impairment tests as at 31 December 2008 are as follows:
| Group / Company | Growth rate | Discount rate net of tax effect net of tax effect |
Terminal Value Terminal Value |
Cash flows period |
|---|---|---|---|---|
| HWE | 10.00% | 8.00% | 15% of total capital expenditures |
20 |
| Genesa subgroup | a) | 6.96% | b) | 20 |
| Ceasa subgroup | a) | 6.96% | b) | 20 |
| Relax Winds subgroup (Poland) | a) | 8.53% | b) | 20 |
| Enernova subgroup | a) | 7.66% | b) | 20 |
| NEO Galia SAS subgroup | a) | 6.66% | b) | 20 |
| Hollywell subgroup | a) | 6.66% | b) | 20 |
| Ridgeside subgroup | a) | 6.66% | b) | 20 |
The tariff amounts used in valuation models have been supported on projections, based on the best expectations at acquisition date, of the future evolution of electricity sales price generated by wind power in Spain.
The tariff amounts considered in valuation models for wind farms in France are in accordance with the rules established by "Arrêté du 10 Juillet 2006". According to the projections, electricity sales market price generated by wind power after the 15 years period has been estimated considering a reduction in the tariff amount of approximately 20%.
For the companies that operate in Portugal, according to the legislation, all operating wind farms or with an establishment license, have guaranteed the sale of electricity for a period of 15 years, for a pre-defined price, which is revised annually based on inflation rate. After this 15 years period, in such cases where a difference between the market price and regulated price exists, it is predicted a compensation with green certificates for a period of 5 years, which currently it is not supported by any legislation. In the evaluations made it has been assumed a significant reduction of electricity sales price for the last 5 years, of approximately 50%, based on the estimation for market price evolution.
The legal base of tariff regulation is the "Energy Act" of 4 March 2005. The amounts projected for the two parameters that constitute the tariff ("Black Energy Price" and for the "Green Certificates") were consistent with the most recent market amounts available. For the "Margonin" wind farm has been considered a higher tariff to reflect the price considered in the power sales contract already negotiated.
The EDP Renováveis Group has considered a terminal value, after 20 years of wind farms use, that corresponds to the valuation of (i) the possibility of increasing the generation capacity of the wind farms, (ii) the maintenace of licenses and rights of EDP Renováveis to use wind farms and (iii) the additional value related with the remain useful life of wind farms beyond the period above referred.
During 2008, the changes in the consolidation perimeter of the EDP Renováveis Group were:
The Subsidiary Companies consolidated under the full consolidated method, as at 31 December 2008, are as follows:
| Head | % | % | ||
|---|---|---|---|---|
| Subsidiaries Companies | Office | Indirect | Direct | Auditor |
| Group's parent holding company: | ||||
| EDP RENOVAVEIS, Sociedad Anónima | Oviedo | 100.00% | 100.00% | KPMG |
| Parent Company: | ||||
| NUEVAS ENERGÍAS DE OCCIDENTE,S.L. | Oviedo | 100.00% | 100.00% | KPMG |
| Electricity business Portugal | ||||
| ENERALTIUS-PRODUÇÃO DE ENERGIA ELECTRICA, SA | Lisboa | 100.00% | - | KPMG |
| ENERNOVA - NOVAS ENERGIAS, SA | Lisboa | 100.00% | - | KPMG |
| EÓLICA DA ALAGOA | Arcos Valdevez | 59.99% | - | KPMG |
| EÓLICA DE MONTENEGRELO, LDA | Vila Pouca de Aguiar | 50.10% | - | KPMG |
| EÓLICA DA SERRA DAS ALTURAS | Porto | 50.10% | - | KPMG |
| LEVANTE-ENERGIA EÓLICA, UNIPESSOAL, LDA | Porto Salvo | 100.00% | - | KPMG |
| MALHADIZES | Porto Salvo | 100.00% | - | KPMG |
| Electricity business Spain | ||||
| Acampo Arias,S.L. | Zaragoza | 98.19% | - | KPMG |
| Agrupación Eólica SLU | Zaragoza | 100.00% | - | KPMG |
| Parque Eólico Plana de Artajona, SLU | Zaragoza | 100.00% | - | Not audited |
| BOURBRIAC | Paris | 100.00% | - | KPMG |
| Compañía Eólica Campo de Borja, S.A. | Zaragoza | 75.83% | - | KPMG |
| Cía. Eléctrica de Energías Renovables Alternativas, SAL | Zaragoza | 100.00% | - | Deloitte |
| Ceprastur AIE * | Oviedo | 45.41% | - | Not Audited |
| Corporación Empresarial de Renovables Alternativas, SLU | Zaragoza | 100.00% | - | Not Audited |
| Parc Eòlic de Coll de Moro, S.L. | BARCELONA | 60.00% | - | Not audited |
| D.E. ALMARCHAL, SAL * | Cádiz | 80.00% | - | KPMG |
| D.E. BUENAVISTA, SAL * | Cádiz | 80.00% | - | KPMG |
| Desarrollos Catalanes Del Viento,S.L. | Barcelona | 60.00% | - | KPMG |
| D.E. DE CORME, S.A. * | La Coruña | 80.00% | - | KPMG |
| D.E. DUMBRIA, SAL * | La Coruña | 80.00% | - | KPMG |
| DESARROLLOS EOLICOS DE GALICIA, S.A. * | La Coruña | 77.33% | - | KPMG |
| D.E. DE LUGO, SAL * | Lugo | 80.00% | - | KPMG |
| Desarrollos Eólicos Promoción S.A.U. * | Sevilla | 80.00% | - | KPMG |
| D.E. RABOSERA, S.A. * | Huesca | 76.00% | - | KPMG |
| Desarrollos Eólicos, S.A. * | Sevilla | 80.00% | - | KPMG |
| D.E. DE TARIFA, SAL * | Cádiz | 80.00% | - | KPMG |
| EÓLICA DON QUIJOTE, S.L. * | Albacete | 80.00% | - | KPMG |
| EÓLICA DULCINEA, S.L. * | Albacete | 80.00% | - | KPMG |
| Eolica Alfoz, S.L. * | Madrid | 67.98% | - | KPMG |
| EÓLICA ARLANZÓN, S.A. * | Madrid | 62.00% | - | KPMG |
| EOLICA CAMPOLLANO, S.A. * | Madrid | 60.00% | - | KPMG |
| Eólica Mare Nostrum S.A. * | Valencia | 48.00% | - | Not Audited |
| EÓLICA LA BRÚJULA, S.A. * | Madrid | 67.92% | - | KPMG |
| Energías Eólicas La Manchuela, S.L.U. * | Albacete | 80.00% | - | KPMG |
| ENEROLIVA, S.A. * | Sevilla | 80.00% | - | Not Audited |
| Fontesilva * | Coruña | 80.00% | - | Not audited |
| Hidroeléctrica Fuentermosa S.L. * | Oviedo | 71.96% | - | Not Audited |
| Parques de Generación Eólica, S.L | Burgos | 60.00% | - | KPMG |
| GENERACIONES ESPECIALES I, S.L. | Madrid | 80.00% | - | KPMG |
| Ceasa Promociones Eólicas SLU | Zaragoza | 100.00% | - | Ernst & Young |
| SUBGRUPO VEINCO * | Zaragoza | 80.00% | - | Not Audited |
| GUADALTEBA * | Sevilla | 80.00% | - | Not Audited |
| Hidroeléctrica Gormaz S.A. * | Salamanca | 60.00% | - | Not Audited |
| Subsidiaries Companies | Head Office |
% Indirect |
% Direct |
Auditor |
|---|---|---|---|---|
| Iberia Aprovechamientos Eólicos, SAL | Zaragoza | 100.00% | - | KPMG |
| INVESTIGACIÓN Y DESARROLLO DE ENERGÍAS RENOVABLES, S. L. | León | 47.67% | - | KPMG |
| Industrias Medioambientales Río Carrión, S.A. * | Madrid | 72.00% | - | Not Audited |
| LA JANDA * | Madrid | 80.00% | - | Not Audited |
| LANAVICA | Madrid | 80.00% | - | KPMG |
| Parque Eólico Los Cantales, SLU | Zaragoza | 100.00% | - | KPMG |
| Parc Eolic Molinars SL | GIRONA | 54.00% | - | Not audited |
| Molino de Caragüeyes,S.L. | Zaragoza | 80.00% | - | KPMG |
| Parque Eólico Montes de Castejón, S.L. | Zaragoza | 100.00% | - | Not audited |
| Muxia I e II * | Coruña | 80.00% | - | Not audited |
| NEO Energia Aragón SL | Madrid | 100.00% | - | KPMG |
| NEO Catalunya SL | Barcelona | 100.00% | - | KPMG |
| Neomai Inversiones SICAV, SA | Madrid | 100.00% | - | PriceWaterhouseCoopers |
| PARQUE EOLICO SANTA QUITERIA, S.L. * | Huesca | 46.66% | - | KPMG |
| PARQUE EÓLICO BELCHITE, SL * | Zaragoza | 80.00% | - | KPMG |
| Parques Eólicos del Cantábrico, S.A. * | Oviedo | 80.00% | - | KPMG |
| PARQUE EÓLICO LA SOTONERA, SL * | Zaragoza | 51.88% | - | KPMG |
| Eolica de Radona SL * | Madrid | 80.00% | - | Not audited |
| Rasacal Cogeneración S.A. * | Madrid | 48.00% | - | Not Audited |
| SIESA RENOVABLES CANARIAS SL * | Gran Canaria | 80.00% | - | Not Audited |
| Renovables Castilla La Mancha S.A. * | Albacete | 72.00% | - | KPMG |
| Hidroeléctrica del Rumblar S.L. * | Madrid | 64.00% | - | Not Audited |
| SIERRA AVILA * | Madrid | 71.99% | - | KPMG |
| Sinae Inversiones Eólicas S.A. * | Madrid | 80.00% | - | KPMG |
| SOTROMAL, S.A. * | Soria | 72.00% | - | Not Audited |
| Parc Eòlic de Torre Madrina, S.L. | Barcelona | 60.00% | - | Not audited |
| TRATAMIENTOS MEDIOAMBIENTALES DEL NORTE, S.A. * | Madrid | 64.00% | - | Not Audited |
| TRATAMIENTOS MEDIOAMBIENTALES RÍO SOTÓN, S.A. | Madrid | 80.00% | - | KPMG |
| Veinco Energia Limpia SL * | Zaragoza | 80.00% | - | Not Audited |
| Bon Vent de Corbera, SL | Barcelona | 100.00% | - | Not audited |
| Bon Vent de Vilalba, SL | Barcelona | 100.00% | - | Not audited |
| Parc Eòlic de Vilalba dels Arcs, S.L. | Barcelona | 60.00% | - | Not audited |
| Electricity business France | ||||
| Parc Eolien D'Ardennes | Elbeuf | 100.00% | - | Not audited |
| C.E. Ayssenes-Le Truel | Paris | 100.00% | - | KPMG |
| Parc Eolien du Clos Bataille, SAS | Elbeuf | 100.00% | - | Cabinet Exco |
| C.E. Beaurevoir, SAS | Paris | 100.00% | - | KPMG |
| Eolienne des Bocages, SARL | Elbeuf | 100.00% | - | Not audited |
| C.E. Calanhel Lohuec, SAS | Paris | 100.00% | - | Not audited |
| Eolienne de Callengeville, SAS | Elbeuf | 100.00% | - | Cabinet Exco |
| CE Canet-Pont de Salars | Paris | 100.00% | - | KPMG |
| Parc Eolien des Longs Champs, SARL | Elbeuf | 100.00% | - | Not audited |
| Eole Service, SARL | Elbeuf | 100.00% | - | Not audited |
| Eole 76 Developpement, SARL | Elbeuf | 100.00% | - | Not audited |
| Eolienne D'Etalondes, SARL | Elbeuf | 100.00% | - | Not audited |
| Le Gollot SAS | Carhaix | 100.00% | - | Jean-Yves Morisset |
| CE Gueltas Noyal-Pontivy | Paris | 100.00% | - | KPMG |
| Parc Eolien de La Hetroye, SAS | Elbeuf | 100.00% | - | Cabinet Exco |
| Hollywell Investments Limited, SARL | Luxembourg | 100.00% | - | Not audited |
| Keranfouler SAS | Carhaix | 100.00% | - | Jean-Yves Morisset |
| SOCPE Le Mee SARL | Toulouse | 49.00% | - | KPMG |
| Parc Eolien Les Bles D'Or SARL | Toulouse | 100.00% | - | Not Audited |
| C.E. Les Vielles, SAS | Paris | 100.00% | - | KPMG |
| Parc Eolien de Mancheville, SARL | Elbeuf | 100.00% | - | Not audited |
| Eole Futur Montloue 1, SAS | Elbeuf | 100.00% | - | Cabinet Exco |
| Neo Galia , SAS | Paris | 100.00% | - | KPMG |
| C.E. Patay, SAS | Paris | 100.00% | - | KPMG |
| Parc Eolien des Bocages, SARL | Elbeuf | 100.00% | - | Not audited |
| SOCPE Petite Piece SARL | Toulouse | 49.00% | - | KPMG |
| SOCPE Pieces de Vigne SARL | Toulouse | 100.00% | - | Not Audited |
| Plouvien Breiz SAS | Carhaix | 100.00% | - | Jean-Yves Morisset |
| CE Pont d´Yeu, SAS | Paris | 100.00% | - | KPMG |
| PROUVILLE Rech. et Dével. Éoliennes |
Paris Paris |
100.00% 100.00% |
- - |
KPMG Not Audited |
| Ridgeside Investments Limited, SARL | Luxembourg | 100.00% | - | Not audited |
| Head | % | % | ||
|---|---|---|---|---|
| Subsidiaries Companies | Office | Indirect | Direct | Auditor |
| Parc Eolien de Roman, SARL | Elbeuf | 100.00% | - | Not audited |
| CE Saint Alban-Henansal | Paris | 100.00% | - | KPMG |
| C.E. Saint Barnabe, SAS | Paris | 100.00% | - | KPMG |
| SOCPE Saint Jacques SARL | Toulouse | 100.00% | - | Not Audited |
| Eolienne de Saugueuse, SARL | Elbeuf | 100.00% | - | Not audited |
| SOCPE Sauvageons SARL | Toulouse | 49.00% | - | KPMG |
| C.E. Segur, SAS Truc L'homme |
Paris Paris |
100.00% 100.00% |
- - |
KPMG KPMG |
| Parc Eolien de Varimpre, SAS | Elbeuf | 100.00% | - | Cabinet Exco |
| Parc Eolien des Vatines, SAS | Elbeuf | 100.00% | - | Cabinet Exco |
| Electricity business Poland | ||||
| Chodow Wind Park SP.ZO.O. | Varsóvia | 100.00% | - | Not Audited |
| KIP Wind Park I SP.ZO.O. | Varsóvia | 100.00% | - | Not Audited |
| KIP Wind Park II SP.ZO.O. | Varsóvia | 100.00% | - | Not Audited |
| Neolica Polska SP Z.O.O. | Warsaw | 100.00% | - | Not audited |
| Relax Wind Park I SP.ZO.O. | Varsóvia | 93.29% | - | Not Audited |
| Relax Wind Park II Sp. zoo | Warsaw | 51.00% | - | Not audited |
| Relax Wind Park III SP.ZO.O. Relax Wind Park IV Sp. zoo |
Varsóvia Warsaw |
100.00% 51.00% |
- - |
Not Audited Not audited |
| Relax Wind Park V SP.ZO.O. | Varsóvia | 100.00% | - | Not audited |
| Relax Wind Park VI SP.ZO.O. | Varsóvia | 100.00% | - | Not audited |
| SK Wind Park SP.ZO.O. | Varsóvia | 100.00% | - | Not audited |
| Sokolowo Wind Park SP.ZO.O. | Varsóvia | 100.00% | - | Not audited |
| Zulawy Wind Park I SP.ZO.O. | Varsóvia | 100.00% | - | Not audited |
| Electricity business Belgium | ||||
| Greenwind S.A. | Louvain-la-Neuve | 70.00% | - | Not Audited |
| Electricity business Brazil | ||||
| EDP RENOVAVEIS BRASIL, S.A. | São Paulo | 55.00% | 55.00% | Not Audited |
| Electricity business Romania | ||||
| Cernavoda Power SRL | Bucharest | 85.00% | - | Not audited |
| Renovatio Power SRL | Bucharest | 85.00% | - | Not audited |
| Electricity business - Holland: | ||||
| Tarcan BV | Amsterdam | 100.00% | - | KPMG |
| Parent Company: | ||||
| Horizon Wind Energy LLC | Texas | 100.00% | 100.00% | KPMG |
| Electricity business USA | ||||
| Wind Turbine Prometheus, LP | California | 100.00% | - | KPMG |
| Dickinson County Wind Farm LLC | Minnesota | 100.00% | - | KPMG |
| Darlington Wind Farm, LLC | Minnesota | 100.00% | - | KPMG |
| Cloud County Wind Farm | Kansas | 100.00% | - | KPMG |
| Whitestone Wind Purchasing, LLC Blue Canyon Windpower II LLC |
Texas Oklahoma |
100.00% 100.00% |
- - |
KPMG KPMG |
| Blue Canyon Windpower V, LLC | Oklahoma | 100.00% | - | KPMG |
| Horizon Wind Energy International | Texas | 100.00% | - | KPMG |
| Pioneer Prairie Wind Farm I, LLC | Iowa | 100.00% | - | KPMG |
| Sagebrush Power Partners, LLC | Washington | 100.00% | - | KPMG |
| Telocaset Wind Power Partners, LLC | Oregon | 100.00% | - | KPMG |
| High Trail Wind Farm, LLC | Illionois | 100.00% | - | KPMG |
| Chocolate Bayou Windpower I, LP | Texas | 100.00% | - | KPMG |
| Marble River, LLC | New York | 100.00% | - | KPMG |
| Rail Splitter | Illionois | 100.00% | - | KPMG |
| Blackstone Wind Farm, LLC | Illionois | 100.00% | - | KPMG |
| Aroostook Wind Energy LLC Jericho Rise Wind Farm LLC |
Maine New York |
100.00% 100.00% |
- - |
KPMG KPMG |
| Head | % | % | ||
|---|---|---|---|---|
| Subsidiaries Companies | Office | Indirect | Direct | Auditor |
| Madison Windpower LLC | New York | 100.00% | - | KPMG |
| Mesquite Wind, LLC | Texas | 100.00% | - | KPMG |
| Martinsdale Wind Farm LLC | Colorado | 100.00% | - | KPMG |
| Post Oak Wind, LLC | Texas | 100.00% | - | KPMG |
| BC Maple Ridge Wind LLC | Texas | 100.00% | - | KPMG |
| High Prairie Wind Farm II, LLC | Minnesota | 100.00% | - | KPMG |
| Arlington Wind Power Project LLC | Oregon | 100.00% | - | KPMG |
| Signal Hill Wind Power Project LLC | Colorado | 100.00% | - | KPMG |
| Tumbleweed Wind Power Project LLC | Colorado | 100.00% | - | KPMG |
| Old Trail Wind Farm, LLC | Illionois | 100.00% | - | KPMG |
| Viento Grande Wind Power Project LLC | Colorado | 100.00% | - | KPMG |
| OPQ Property LLC | Illionois | 100.00% | - | KPMG |
| Meadow Lake Wind Farm, LLC | Indiana | 100.00% | - | KPMG |
| Wheatfield Wind Power Project, LLC | Oregon | 100.00% | - | KPMG |
| 007 Vento I LLC | Texas | 100.00% | - | KPMG |
| 007 Vento II | Texas | 100.00% | - | KPMG |
| 008 Vento III | Texas | 100.00% | - | KPMG |
| Horizon Wind Ventures I LLC | Texas | 100.00% | - | KPMG |
| Horizon Wind Ventures II, LLC | Texas | 100.00% | - | KPMG |
| Horizon Wind Ventures III, LLC | Texas | 100.00% | - | KPMG |
| Clinton County Wind Farm, LLC | New York | 100.00% | - | KPMG |
| Electricity business USA (a) | ||||
| BC2 Maple Ridge Holdings LLC | Texas | 100.00% | - | Not audited |
| Cloud West Wind Project, LLC | Texas | 100.00% | - | Not audited |
| Five-Spot, LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Chocolate Bayou I LLC | Texas | 100.00% | - | Not audited |
| Alabama Ledge Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Antelope Ridge Wind Power Project LLC | Texas | 100.00% | - | Not audited |
| Arkwright Summit Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Ashford Wind Farm LLC Athena-Weston Wind Power Project LLC |
Texas Texas |
100.00% 100.00% |
- - |
Not audited Not audited |
| Black Prairie Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Blackstone Wind Farm II LLC | Texas | 100.00% | - | Not audited |
| Blackstone Wind Farm III LLC | Texas | 100.00% | - | Not audited |
| Blackstone Wind Farm IV LLC | Texas | 100.00% | - | Not audited |
| Blackstone Wind Farm V LLC | Texas | 100.00% | - | Not audited |
| Blue Canyon Windpower III LLC | Texas | 100.00% | - | Not audited |
| Blue Canyon Windpower IV LLC | Texas | 100.00% | - | Not audited |
| Blue Canyon Windpower VI LLC | Texas | 100.00% | - | Not audited |
| Broadlands Wind Farm II LLC | Texas | 100.00% | - | Not audited |
| Broadlands Wind Farm III LLC | Texas | 100.00% | - | Not audited |
| Broadlands Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Chateaugay River Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Cropsey Ridge Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Crossing Trails Wind, Power Project LLC | Texas | 100.00% | - | Not audited |
| Dairy Hills Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Diamond Power Partners LLC | Texas | 100.00% | - | Not audited |
| East Clickitat Wind Power Project LLC | Texas | 100.00% | - | Not audited |
| Ford Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Freeport Windpower I, LP | Texas | 100.00% | - | Not audited |
| Gulf Coast Windpower Management Company, LLC | Texas | 100.00% | - | Not audited |
| Homestead Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Northwest VII LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Northwest X LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Northwest XI LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Panhandle I LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Southwest I LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Southwest II LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Southwest III LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Southwest IV LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Valley I LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind MREC Iowa Partners LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind, Freeport Windpower I LLC | Texas | 100.00% | - | Not audited |
| Juniper Wind Power Partners, LLC | Texas | 100.00% | - | Not audited |
| Lexington Chenoa Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Machias Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Meadow Lake Wind Farm II LLC | Texas | 100.00% | - | Not audited |
| Head | % | % | ||
|---|---|---|---|---|
| Subsidiaries Companies | Office | Indirect | Direct | Auditor |
| New Trail Wind Farm LLC | Texas | 100.00% | - | Not audited |
| North Slope Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Number Nine Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Pacific Southwest Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Pioneer Prairie Wind Farm II LLC | Texas | 100.00% | - | Not audited |
| Rim Rock Power Partners LLC | Texas | 100.00% | - | Not audited |
| Saddleback Wind Power Project LLC | Texas | 100.00% | - | Not audited |
| Sardinia Windpower LLC | Texas | 100.00% | - | Not audited |
| Turtle Creek Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Western Trail Wind Project I LLC | Texas | 100.00% | - | Not audited |
| Whistling Wind WI Energy Center, LLC | Texas | 100.00% | - | Not audited |
| Simpson Ridge Wind Farm LLC | Texas | 100.00% | - | Not audited |
| Coos Curry Wind Power Project LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Midwest IX LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Northwest I LLC | Texas | 100.00% | - | Not audited |
| Horizon Wind Energy Northwest XV LLC | Texas | 100.00% | - | Not audited |
| Peterson Power Partners LLC | Texas | 100.00% | - | Not audited |
| Pioneer Prairie Interconnection LLC | Texas | 100.00% | - | Not audited |
| The Nook Wind Power Project LLC | Texas | 100.00% | - | Not audited |
| Tug Hill Windpower LLC | Texas | 100.00% | - | Not audited |
| Whiskey Ridge Power Partners LLC | Texas | 100.00% | - | Not audited |
| Wilson Creek Power Partners LLC | Texas | 100.00% | - | Not audited |
| WTP Management Company LLC | Texas | 100.00% | - | Not audited |
The main financial indicators of the jointly controlled companies included in the consolidation under the proportionate proportionateproportionate consolidation consolidationconsolidation method as at 31 December 2008, are as follows:
| Jointly Controlled Companies | Head | Assets Assets |
LiabilitiesLiabilities Liabilities |
Total Revenues Total Revenues | % | % | |
|---|---|---|---|---|---|---|---|
| Office | 31-Dec-08 31-Dec-08 |
31-Dec-08 31-Dec-08 31-Dec-08 |
31-Dec-08 31-Dec-08 | Indirect Indirect |
Direct Direct |
Auditor Auditor | |
| Euro'000 Euro'000 |
Euro'000Euro'000 Euro'000 |
Euro'000 Euro'000 | |||||
| Electricity business | |||||||
| Flat Rock Windpower LLC | New York | 353,953 | 2,430 | 31,284 | 50.00% | 50.00% | E&Y |
| Flat Rock Windpower II LLC | New York | 139,789 | 916 | 10,814 | 50.00% | 50.00% | E&Y |
| Compañía Eólica Aragonesa, S.A. | Zaragosa | 144,578 | 95,442 | 41,157 | 50.00% | 50.00% | Deloitte |
| Desarrollos Energeticos Canarios S.A. | Las Palmas | 8 | 18 | - | 39.92% | 49.90% | KPMG |
| EVOLUCIÓN 2000, S.L. | Albacete | 66,244 | 53,779 | 13,468 | 39.32% | 49.15% | KPMG |
| Horta Medioambiente S.A. | Madrid | - | 113 | - | 40.00% | 50.00% | Not Audited |
| Ibersol E. Solar Ibérica, S.A. | Almería | 2,190 | 2,125 | 22 | 40.00% | 50.00% | KPMG |
| Murciasol-1 Solar Térmica, S.L. | Almería | 202 | 198 | 14 | 40.00% | 50.00% | KPMG |
| TEBAR EÓLICA, S.A. | Cuenca | 48,522 | 38,450 | 12,163 | 40.00% | 50.00% | Audit, S.L. |
The Associated Companies Companies included in the consolidation under the equity method as at 31 December 2008, are as follows:
| Head | % | % | ||
|---|---|---|---|---|
| Associates | Office | Indirect | Direct | Auditor |
| Biomasas del Pirineo S.A. | Huesca | 24.00% | - | Not Audited |
| Cultivos Energéticos de Castilla S.A. | Burgos | 24.00% | - | Not Audited |
| D.E. DE CANARIAS, S.A. | Gran Canaria | 35.80% | - | KPMG |
| Hidroastur S.A. | Oviedo | 20.00% | - | Centium |
| Naturneo Energía, S.L. | Bilbau | 49.01% | - | Not audited |
| PARQUE EÓLICO BELMONTE, S.A. | Asturias | 23.92% | - | KPMG |
| Parque Eólico Sierra del Madero S.A. | Soria | 33.60% | - | Ernst & Young |
| PARQUE EÓLICO ALTOS DEL VOLTOYA, S.A. | Madrid | 24.80% | - | KPMG |
| SODECOAN, S.L. | Sevilla | 40.00% | - | Not audited |
| SOLAR SIGLO XXI, S.A. | Ciudad Real | 20.00% | - | Not Audited |
| ENEOP - ÉOLICAS DE PORTUGAL, S.A. | Lisboa | 19.60% | - | Mazars |
The Subsidiary Companies consolidated under the full consolidated method, as at 31 December 2007, are as follows:
| Subsidiaries Companies | Head Office |
% Indirect |
% Direct |
Auditor |
|---|---|---|---|---|
| Group's parent holding company: | ||||
| EDP Renováveis S.L. | Oviedo | - | - | KPMG |
| Parent Company: | ||||
| Nuevas Energías de Occidente, S.L. | Oviedo | 60.00% | - | KPMG |
| Electricity business - Portugal: | ||||
| Bolores-Energia Eólica, S.A. | Lisbon | 60.00% | - | KPMG |
| Eneraltius-Produção de Energia Electrica, S.A. | Lisbon | 60.00% | - | KPMG |
| Enernova - Novas Energias, S.A. | Lisbon | 60.00% | - | KPMG |
| Eólica da Alagoa, S.A. | Arcos Valdevez | 35.99% | - | KPMG |
| Eólica da Serra das Alturas, S.A. | Oporto | 30.06% | - | KPMG |
| Eólica de Montenegrelo, Lda | Vila Pouca de Aguiar | 30.06% | - | KPMG |
| Levante - Energia Eólica, Unipessoal, Lda | Porto Salvo | 60.00% | - | KPMG |
| Malhadizes - Energia Eólica SA | Porto Salvo | 60.00% | - | KPMG |
| Safra - Energia Eólica, S.A. | Leiria | 60.00% | - | KPMG |
| Electricity business - Spain: | ||||
| Acampo Arias,S.L. | Zaragoza | 58.91% | - | KPMG |
| Agrupación Eólica, SLU | Zaragoza | 60.00% | - | KPMG |
| Ceasa Promociones Eólicas, SLU | Zaragoza | 60.00% | - | Ernst&Young |
| Ceprastur AIE * | Oviedo | 27.25% | - | Not Audited |
| Cía. Eléctrica de Energías Renovables Alternativas, SAU | Zaragoza | 60.00% | - | Deloitte |
| Compañía Eólica Campo de Borja, S.A. | Zaragoza | 45.50% | - | KPMG |
| Corporación Empresarial de Renovables Alternativas, SLU | Zaragoza | 60.00% | - | Not Audited |
| Desarrollos Eólicos Promocion, S.A. * | Seville | 48.00% | - | KPMG |
| Desarrollo Eólico Almarchal, SAU * | Cádiz | 48.00% | - | KPMG |
| Desarrollo Eólico Buenavista, SAU * | Cádiz | 48.00% | - | KPMG |
| Desarrollo Eólico de Corme, S.A. * | La Coruña | 45.60% | - | KPMG |
| Desarrollo Eólico de Lugo, SAU * | Lugo | 48.00% | - | KPMG |
| Desarrollo Eólico de Tarifa, SAU * | Cádiz | 48.00% | - | KPMG |
| Desarrollo Eólico Dumbria, SAU * | La Coruña | 48.00% | - | KPMG |
| Desarrollo Eólico RABOSERA, S.A. * | Huesca | 45.60% | - | KPMG |
| Desarrollo Eólico Santa Quiteria, S.L.* | Huesca | 28.00% | - | KPMG |
| Desarrollos Catalanes Del Viento, S.L | Barcelona | 36.00% | - | KPMG |
| Desarrollos Eolicos de Galicia, S.A. * | La Coruña | 46.40% | - | KPMG |
| Desarrollos Eolicos, S.A. * | Seville | 48.00% | - | KPMG |
| Eólica Dulcinea, S.L. * | Albacete | 48.00% | - | KPMG |
| Eólica Alfoz, S.L. * | Madrid | 43.19% | - | KPMG |
| Eneroliva S.A. * | Seville | 48.00% | - | Not Audited |
| Eólica Arlanzón, S.A. * | Madrid | 37.20% | - | KPMG |
| Eolica Campollano S.A. * | Madrid | 36.00% | - | KPMG |
| Eólica Don Quijote, S.L. * | Albacete | 48.00% | - | KPMG |
| Eólica Mare Nostrum, S.A. * | Valencia | 28.80% | - | Not Audited |
| Energia Eólica La Manchuela, SLU (formerly Sierra de la Peña S.A.) * | Madrid | 40.75% | - | KPMG |
| Eólica La Brújula S.A. (formerly Sierra de la Peña S.L.) * | Albacete | 48.00% | - | KPMG |
| Genesa I S.L. | Madrid | 48.00% | - | KPMG |
| Eólica Guadalteba, S.L. * | Seville | 48.00% | - | Not Audited |
| Hidroeléctrica del Rumblar, S.L. * | Madrid | 38.40% | - | Not Audited |
| Hidroeléctrica Fuentermosa, S.L. * | Oviedo | 43.17% | - | Not Audited |
| Hidroeléctrica Gormaz S.A. * | Salamanca | 36.00% | - | Not Audited |
| Iberia Aprovechamientos Eólicos, SAU | Zaragoza | 60.00% | - | KPMG |
| Industrias Medioambientales Río Carrión, S.A. * | Madrid | 43.20% | - | Not Audited |
| Investigación y Desarrollo de Energías Renovables, S.L. | León | 38.20% | - | KPMG |
| Eólica La Janda, S.L. * | Madrid | 48.00% | - | Not Audited |
| Eólica La Navica, S.L. * | Madrid | 48.00% | - | KPMG |
| Molino de Caragüeyes,S.L | Zaragoza | 48.00% | - | KPMG |
| NEO Catalunya SL | Barcelona | 60.00% | - | KPMG |
| NEO Energia Aragon SL | Madrid | 60.00% | - | KPMG |
| Neomai Inversiones SICAV, SA | Madrid | 60.00% | - | PriceWaterhouseCoopers |
| Head | % | % | ||
|---|---|---|---|---|
| Subsidiaries Companies | Office | Indirect | Direct | Auditor |
| Parque Eólico Belchite S.L. * | Zaragoza | 48.00% | - | KPMG |
| Parque Eólico la Sotonera, S.L. * | Zaragoza | 31.13% | - | KPMG |
| Parque Eólico Los Cantales, SLU | Zaragoza | 60.00% | - | KPMG |
| Parque Eólico Montes de Castejón, S.L. | Zaragoza | 60.00% | - | Not audited |
| Parque Eólico Plana de Artajona, SLU | Zaragoza | 60.00% | - | Not audited |
| Parques de Generación Eólica, S.L | Burgos | 36.00% | - | KPMG |
| Parques Eólicos del Cantábrico S.A. * | Oviedo | 48.00% | - | KPMG |
| Rasacal Cogeneración S.A. * | Madrid | 28.80% | - | Not Audited |
| Renovables Castilla la Mancha, S.A. * | Albacete | 43.20% | - | KPMG |
| Eólica Sierra de Avila, S.L. * | Madrid | 45.60% | - | KPMG |
| Siesa Renovables Canarias, S.L. * | Gran Canaria | 48.00% | - | Not Audited |
| Sinae Inversiones Eólicas S.A. * | Madrid | 48.00% | - | KPMG |
| Sotromal, S.A. * | Soria | 43.20% | - | Not Audited |
| Tratamientos Medioambientales del Norte, S.A. * | Madrid | 38.40% | - | Not Audited |
| Eólica Curiscao Pumar, S.A.U. (formerly Río Sotón) * | Madrid | 48.00% | - | KPMG |
| Valle del Ebro Ingenieria y Consultoria, S.L. * | Zaragoza | 48.00% | - | Not Audited |
| Veinco Energia Limpia SLU * | Zaragoza | 60.00% | - | Not Audited |
| Electricity business - France: | ||||
| C.E. Bourbriac, SAS | Paris | 60.00% | - | KPMG |
| CE Ayssenes-Le Truel, SAS | Paris | 60.00% | - | KPMG |
| C.E. Beaurevoir, SAS | Paris | 60.00% | - | KPMG |
| C.E. Calanhel Lohuec, SAS | Paris | 60.00% | - | KPMG |
| CE Canet-Pont de Salars, SAS | Paris | 60.00% | - | KPMG |
| CE Gueltas Noyal-Pontivy, SAS | Paris | 60.00% | - | KPMG |
| C.E. Les Vielles, SAS | Paris | 60.00% | - | KPMG |
| C.E. Patay, SAS | Paris | 60.00% | - | KPMG |
| C.E. Pont d´Yeu, SAS | Paris | 60.00% | - | KPMG |
| CE Saint Alban-Henansal, SAS | Paris | 60.00% | - | KPMG |
| C.E. Saint Barnabe, SAS | Paris | 60.00% | - | KPMG |
| C.E. Segur, SAS | Paris | 60.00% | - | KPMG |
| Keranfouler, S.A.S. | Carhaix | 60.00% | - | Jean-Yves Morisset |
| Le Gollot, S.A.S. | Carhaix | 60.00% | - | Jean-Yves Morisset |
| Le Mee, S.A.R.L. | Toulouse | 29.40% | - | KPMG |
| Parc Eolien Les Bles D'Or S.A.R.L. | Toulouse | 60.00% | - | Not Audited |
| Petite Piece, S.A.R.L. | Toulouse | 29.40% | - | KPMG |
| Pieces de Vigne S.A.R.L. | Toulouse | 60.00% | - | Not Audited |
| Plouvien Breiz, S.A.S. | Carhaix | 60.00% | - | Jean-Yves Morisset |
| C.E. Neo Prouville, SAS | Paris | 60.00% | - | KPMG |
| Recherches et Développements Éoliennes, SARL | ||||
| Sauvageons, S.A.R.L. | Paris | 60.00% | - | KPMG |
| Saint Jacques, S.A.R.L | Toulouse | 29.40% | - | KPMG |
| C.E. Neo Truc de l'homme, SAS | Toulouse | 60.00% | - | Not Audited |
| Paris | 60.00% | - | KPMG | |
| Electricity business - Holland: | ||||
| Tarcan, BV | Amsterdam | 60.00% | - | KPMG |
| Electricity business - Belgium: | ||||
| Greenwind, S.A. | Louvain-la-Neuve | 42.00% | - | Not Audited |
| Electricity business - Poland: | ||||
| Chodow Wind Park SP.ZO.O. | Warsaw | 60.00% | - | Not Audited |
| KIP Wind Park I SP.ZO.O. | Warsaw | 60.00% | - | Not Audited |
| KIP Wind Park II SP.ZO.O. | Warsaw | 60.00% | - | Not Audited |
| Relax Wind Park I SP.ZO.O. | Warsaw | 43.98% | - | Not Audited |
| Relax Wind Park III SP.ZO.O. | Warsaw | 30.60% | - | Not Audited |
| Relax Wind Park V SP.ZO.O. | Warsaw | 60.00% | - | Not audited |
| Relax Wind Park VI SP.ZO.O. | Warsaw | 60.00% | - | Not audited |
| SK Wind Park SP.ZO.O. | Warsaw | 60.00% | - | Not audited |
| Sokolowo Wind Park SP.ZO.O. | Warsaw | 60.00% | - | Not audited |
| Zulawy Wind Park I SP.ZO.O. | Warsaw | 60.00% | - | Not audited |
| Head | % | % | ||
|---|---|---|---|---|
| Subsidiaries Companies | Office | Indirect | Direct | Auditor |
| Parent Company: | ||||
| Horizon Wind Energy LLC | Houston, Texas | 100.00% | - | KPMG |
| Electricity business - United States: | ||||
| 2007 Vento I LLC | Houston, Texas | 100.00% | - | KPMG |
| Arlington Wind Power Project LLC | Houston, Texas | 100.00% | - | KPMG |
| Aroostook Wind Energy LLC | Houston, Texas | 100.00% | - | KPMG |
| BC2 Maple Ridge Wind LLC | Houston, Texas | 100.00% | - | KPMG |
| Blue Canyon Windpower II LLC | Houston, Texas | 100.00% | - | KPMG |
| Chocolate Bayou Windpower I, LP | Houston, Texas | 100.00% | - | KPMG |
| Clinton County Wind Farm, LLC | Houston, Texas | 100.00% | - | KPMG |
| High Prairie Wind Farm II, LLC | Houston, Texas | 100.00% | - | KPMG |
| High Trail Wind Farm, LLC | Houston, Texas | 100.00% | - | KPMG |
| Horizon Wind Energy International | Houston, Texas | 100.00% | - | KPMG |
| Horizon Wind Ventures I LLC | Houston, Texas | 100.00% | - | KPMG |
| Jericho Rise Wind Farm LLC | Houston, Texas | 100.00% | - | KPMG |
| Madison Windpower LLC | Houston, Texas | 100.00% | - | KPMG |
| Marble River, LLC | Houston, Texas | 100.00% | - | KPMG |
| Martinsdale Wind Farm LLC | Houston, Texas | 100.00% | - | KPMG |
| Mesquite Wind, LLC | Houston, Texas | 100.00% | - | KPMG |
| Old Trail Wind Farm, LLC | Houston, Texas | 100.00% | - | KPMG |
| OPQ Property LLC | Houston, Texas | 100.00% | - | KPMG |
| Post Oak Wind, LLC | Houston, Texas | 100.00% | - | KPMG |
| Signal Hill Wind Power Project LLC | Houston, Texas | 100.00% | - | KPMG |
| Telocaset Wind Power Partners, LLC | Houston, Texas | 100.00% | - | KPMG |
| Tumbleweed Wind Power Project LLC | Houston, Texas | 100.00% | - | KPMG |
| Viento Grande Wind Power Project LLC | Houston, Texas | 100.00% | - | KPMG |
| Wind Turbine Prometheus, LP | Houston, Texas | 100.00% | - | KPMG |
The Associated Companies Associated CompaniesCompanies included in the consolidation under the equity method as at 31 December 2007, are as follows:
| Head | % | % | ||
|---|---|---|---|---|
| Associates | Office | Indirect | Direct | Auditor |
| Electricity business - Spain: | ||||
| Biomasas del Pirineo, S.A. | Huesca | 14.40% | - | Not Audited |
| Cultivos Energéticos de Castilla, S.A. | Burgos | 14.40% | - | Not Audited |
| D.E. de Canárias, S.A. | Gran Canaria | 21.48% | - | KPMG |
| Hidroeléctrica Rio Lena S.A. | Oviedo | 4.15% | - | KPMG |
| Hidroastur, S.A. | Oviedo | 12.00% | - | Centium |
| Parque Eólico Altos del Voltoya, S.A. | Madrid | 14.88% | - | KPMG |
| Parque Eólico de Belmonte, S.A. | Asturias | 14.35% | - | KPMG |
| Parque Eólico Sierra del Madero, S.A. | Soria | 20.16% | - | Ernst&Young |
| Sociedad Eólica de Andalucia, S.L. | Seville | 24.00% | - | Not audited |
| Siglo XXI Solar S.A. | Ciudad Real | 12.00% | - | Not Audited |
| Yedesa Cogeneración, S.A. | Seville | 4.80% | - | KPMG |
The main financial indicators of the jointly controlled companies included in the consolidation under the proportionate proportionateproportionate consolidation consolidation method as at 31 December 2007, are as follows:
| Jointly controlled controlled companies companies |
Head Head Office Office |
Assets 31-Dec-07 31-Dec-07 31-Dec-07 Euro'000 Euro'000 |
Liabilities LiabilitiesLiabilities 31-Dec-07 31-Dec-07 Euro'000Euro'000 Euro'000 |
Total Revenues Total RevenuesRevenues 31-Dec-07 31-Dec-07 Euro'000 Euro'000 |
% Indirect Indirect |
% Direct |
% Direct |
|---|---|---|---|---|---|---|---|
| Electricity business - Spain: | |||||||
| Compañía Eólica Aragonesa, S.A. | Zaragosa | 66,740 | 48,719 | - | 30.00% | - | Deloitte |
| Desarrollos Energeticos Canarios, S.A. | Las Palmas | 8 | 18 | - | 23.95% | - | KPMG |
| Evolución 2000, S.L. | Albacete | 64,838 | 55,414 | 5,644 | 23.59% | - | KPMG |
| Horta Medioambiental S.A. | Madrid | 22 | 135 | - | 24.00% | - | Not Audited |
| Ibersol E. Solar Ibérica, S.A | Almería | 1,937 | 1,872 | - | 24.00% | - | KPMG |
| Marquesado Solar S.A. | Almería | 17,634 | 17,597 | - | 24.00% | - | Not audited |
| Murciasol 1 Solar Térmica, S.L. | Almería | 182 | 179 | - | 24.00% | - | KPMG |
| Tébar Eólica, S.A. | Cuenca | 50,181 | 41,377 | 8,340 | 24.00% | - | Audit, S.L. |
(a) During 2008 EDP Renováveis Group has incorporated these companies in United States of America that do not have activity and have been incorporated without share capital.
* These companies have been consolidated considering that EDP Renováveis, through its subsidiary NEO, hold 100% of Genesa share capital, taking in consideration the put option over Caja Madrid (as described in note 36).
This balance is analysed as follows:
| Group | ||||
|---|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|||
| Investments in associates: Equity holdings in associates Adjustments on investments in associates |
40,782 - |
32,514 -154 |
||
| Carrying amount | 40,782 | 32,360 |
For the purpose of annual accounts presentation, goodwill arising from the acquisition of associated companies is presented in this caption, included in the total amount of Equity holdings in associates.
| Group | ||
|---|---|---|
| 31 Dec 2008 | ||
| Investment Investment Euro'000 Euro'000 |
Impairment Euro'000 |
|
| Associated companies: | ||
| Desarrollos Eólicos de Canárias, S.A. | 10,735 | - |
| ENEOP - Éolicas de Portugal, S.A. | 6,486 | - |
| Parque Eólico Sierra del Madero S.A. | 5,454 | - |
| Veinco Energia Limpia S.L. | 4,154 | - |
| Parque Eólico altos del Voltoya, S.A. | 3,481 | - |
| Parque Eólico Belmonte, S.A. | 3,243 | - |
| Associates of Valle del Ebro Ingeniería y Consultoría, S.L. | 2,241 | - |
| Hidroastur S.A. | 2,112 | - |
| Horizon Wind Energy | 2,031 | |
| Other | 845 | - |
| 40,782 | - |
| Group | ||
|---|---|---|
| 31 Dec 2007 | ||
| Investment Investment Euro'000 Euro'000 |
Impairment Impairment Euro'000 Euro'000 |
|
| Associated companies: | ||
| Desarrollos Eólicos de Canárias, S.A. | 10,875 | - |
| Parque Eólico Sierra del Madero, S.A. | 4,542 | - |
| Associates of Veinco Energia Limpia, S.L. | 4,913 | - |
| Parque Eólico Altos del Voltoya, S.A. | 2,967 | - |
| Blue Canyon Windpower, LLC | 2,635 | -154 |
| Parque Eólico de Belmonte, S.A. | 2,610 | - |
| Hidroastur, S.A. | 2,121 | - |
| Associates of Valle del Ebro Ingeniería y Consultoría, S.L. | 1,647 | - |
| Other | 204 | - |
| 32,514 | -154 |
| Group | |
|---|---|
| 31 Dec 2008 Euro'000 |
|
| Balance as at 1 January | 32,514 |
| Acquisitions | 3,569 |
| Disposals | -210 |
| Share of profits of associates | 4,369 |
| Dividends received | -2,693 |
| Exchange differences | 151 |
| Changes in consolidation method | 3,436 |
| Changes in perimeter consolidation | -201 |
| Transfers/Regularizations | -153 |
| Balance as at 31 December | 40,782 |
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 Euro'000 |
|
| Sociedad Eólica de Andalucia, S.A. | 10,854 | 3,107 |
| ENEOP - Eólicas de Portugal, S.A. | - | 3,460 |
| Hueneja, C.B. | - | 1,246 |
| Aprofitament D'Energies Renovables de la Terra Alta, S.A. | 783 | - |
| Wind Expert | 500 | - |
| Other | 364 | 138 |
| 12,501 | 7,951 |
During 2008, ENEOP - Eólicas de Portugal, a partnership with other companies that develop several projects related to electricity wind generation, started to consolidate under the equity method.
Genesa sold its shareholding in Marquesado del Solar, S.A., which held an interest in Hueneja, C.B. classified under available for sale investments.
The EDP Renováveis Group acquired an interest in Aprofitament D'Energies Renovables de la Terra Alta, S.A., a company that develops several projects related with electricty transport lines and high voltage substations in the region of Terra Alta (Spain) and an interest of 5% in romanian company Wind Expert, included in the acquisition of Renovatio and Cervanoda.
The increase in Sociedad Eólica de Andalucia, S.A. is related to the increase on the fair vale of the company (see note 28).
The assumptions used in the valuation models of available for sale investments are as follows:
| Discount rate | Cash flows | ||||
|---|---|---|---|---|---|
| Company | Growth rate | net of tax effect | period period |
Terminal Terminal Value |
|
| Sociedad Eólica de Andalucia, S.A. | a) | 6.96% | 20 | b) |
a) The tariff amounts used in valuation models have been supported on projections, based on the best expectations at acquisition date, of the future evolution of electricity sales price generated by wind power in Spain.
b) The Group EDP Renováveis has considered a terminal value, after 20 years of wind farms use, that corresponds to the valuation of (i) the possibility of increasing the generation capacity of the wind farms, (ii) the maintenance of licenses and rights to use the wind farms and (iii) the additional value related with the remain useful life of wind farms beyond the period mentioned above.
The EDP Renováveis Group records the tax effect arising from temporary differences between the assets and liabilities determined on an accounting basis and on a tax basis, which are analysed as follows:
| Deferred tax assets | Deferred tax liabilities | Net deferred tax | ||||
|---|---|---|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 31 Dec 2007 Euro'000Euro'000 Euro'000 |
31 Dec 2008 31 2008 Euro'000 Euro'000Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000Euro'000 |
31 Dec 2008 31 Dec 2008 Euro'000 Euro'000Euro'000 |
31 Dec 2007 Dec 2007 Euro'000 Euro'000 |
|
| Tax losses brought forward | 3,008 | 4,309 | - | - | 3,008 | 4,309 |
| Provisions | 2,173 | 556 | - | - | 2,173 | 556 |
| Derivative financial instruments | 3,581 | 176 | 1,374 | 1,679 | 2,207 | -1,503 |
| Available for sale Investments | - | - | - | - | - | - |
| Intangible Assets | - | - | 13,123 | - | -13,123 | - |
| Property, plant and equipment | 12,142 | 11,335 | 10,542 | 8,386 | 1,600 | 2,949 |
| Reinvested gains | - | - | - | - | - | - |
| Other | 930 | 343 | 12 | 8,398 | 918 | -8,055 |
| Reversal of regulatory assets and liabilities | - | - | - | - | - | - |
| Allocation of fair value to assets and liabilities | - | - | 278,153 | 274,579 | -278,153 | -274,579 |
| Accounting revaluations | - | - | 127 | 352 | -127 | -352 |
| Exchange differences and others | - | - | - | - | - | - |
| Assets/liabilities compensation of deferred taxes | - | - | - | - | - | - |
| 21,834 | 16,719 | 303,331 | 293,394 | -281,497 | -276,675 |
The Deferred tax liabilities of NEO Group for 31 December 2007, has been reclassified due to purchase price allocation carried out in 2008, in the amount of 14,924 thousands of Euros (see note 16).
The movements in deferred tax assets and liabilities during the year are analysed as follows:
| 31 Dec 2008 Euro'000 |
||
|---|---|---|
| Tax Assets Tax Assets |
Tax Liabilities Tax Liabilities |
|
| Opening balance | 16,719 | -293,393 |
| Increases charged to the profit and loss account | 4,456 | -3,500 |
| Decreases charged to the profit and loss account | -3,352 | 8,464 |
| Increases charged to reserves | 3,572 | -13,413 |
| Decreases charged to reserves | - | 1,473 |
| Change in the applicable tax rate | -14 | 178 |
| Other movements | 453 | -3,140 |
| 21,834 | -303,331 | |
Details of deferred tax assets and liabilities that will be realised or reversed in over 12 months are as follows:
| Tax Assets Tax Assets |
Tax Liabilities Tax Liabilities |
|
|---|---|---|
| 31 Dec 2008 2008 |
31 Dec 2008 31 Dec 2008 |
|
| Euro'000 Euro'000 |
Euro'000 Euro'000 |
|
| Tax losses brought forward | - | - |
| Provisions | 116 | - |
| Derivative financial instruments | 4,031 | 1,374 |
| Reversal of regulatory assets and liabilities | - | - |
| Allocation of acquired assets and liabilities fair values | - | 278,153 |
| Intangible Assets | - | 13,123 |
| Property, plant and equipement | - | 10,542 |
| Accounting revaluations | - | 3 |
| Others | 11,252 | 19 |
| 15,399 | 303,214 |
The Group tax losses and tax credits carried forward are analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Expiration date: | ||
| 2009 | - | - |
| 2010 | 11 | 11 |
| 2011 | 21 | 21 |
| 2012 | 27 | 27 |
| 2013 | 105 | 105 |
| 2014 | 3 | 3 |
| 2015 | 7,462 | 7,462 |
| 2016 to 2027 | 221,099 | 67,265 |
| 228,728 | 74,894 |
The Group has not calculated deferred tax assets for tax losses carried forward of 228,178 thousands of Euros due to uncertainty regarding the future realization of the net deferred tax asset.
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Advances on account of purchases | 1,915 | 35,127 |
| Finished and intermediate products | 10,313 | 3,740 |
| Raw and subsidiary materials and consumables: | ||
| Other consumables | 149 | 157 |
| 12,377 | 39,024 |
Trade receivables are analysed as follows: Trade receivables
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Short term trade receivables - Current: | ||
| Spain | 46,221 | 35,219 |
| United States of America | 21,130 | 11,567 |
| Portugal | 11,050 | 11,178 |
| France | 4,168 | 2,881 |
| Poland | 29 | 40 |
| 82,598 | 60,885 | |
| Doubtful debts | 2,347 | 2,309 |
| Impairment losses | -2,347 | -2,309 |
| 82,598 | 60,885 |
The movement in impairment losses in 2008 is due to an increase of 38 thousands of Euros for customers in Spain.
Debtors and other assets are analysed as follows: Debtors other assets
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Short-term debtors - Current: | ||
| Loans to related parties | 106,625 | 23,674 |
| Advances to suppliers | 18 | 36 |
| Other debtors: | ||
| - Amounts related to staff | 25 | 9 |
| - Derivative financial instruments (Hedging) | 3,355 | 51,061 |
| - Insurance | 1,059 | 309 |
| - Management fees | 512 | 2,022 |
| - Cernavoda land acquisitions | 2,189 | - |
| - Financial assets advanced payments | 1,075 | 1,399 |
| - Deferred costs for infrastructure construction | 1,821 | - |
| - Wind relax (Receivable VAT related with turbines acquisitions) | 991 | - |
| - Amounts receivabe from Eolic Partners | 1,925 | - |
| - Production tax credits (PTC) | 934 | 1,104 |
| - Horizon warranty claim | 5,179 | - |
| - Prepaid turbine maintenance | 2,687 | - |
| - Guarantee deposits | 6,853 | 1,044 |
| - Tied deposits | 43,016 | 9,089 |
| - Sundry debtors and other operations | 17,549 | 9,504 |
| 195,813 | 99,251 |
| Medium and long-term debtors - Non-current: | ||
|---|---|---|
| Loans to related parties | 21,769 | 10,576 |
| Notes receivable (Horizon) | 10,678 | 6,824 |
| Guarantees and tied deposits | 33,666 | 34,431 |
| Derivative financial instruments (Hedging) | 6,081 | - |
| Deferred costs (Enernova Group) | 42,617 | 26,666 |
| Deferred PPA costs (High Trail) | 5,748 | - |
| O&M contract valuation - Mapple Ridge I (Horizon) | 7,941 | 8,084 |
| Deferred Tax Equity Costs | 5,002 | - |
| Sundry debtors and other operations | 8,038 | 13,881 |
| 141,540 | 100,462 | |
| 337,353 | 199,713 |
Loans to related parties - Current includes an amount of 83,025 thousands of Euros related to a set of loans granted to EDP Finance, that have maturities from 1 week to 1 month and bear interest at market conditions and an amount of 22,825 thousands of Euros with EDP Branch.
Tied deposits - Current includes 39,736 thousands of Euros related to the Vento III financing agreement. Funds are required to be held in the amount sufficient to pay remaining Vento III construction related costs.
Guarantees and tied deposits - Non Current are related with NEO Group companies with projects finance, that are obliged to maintain these amounts in bank accounts to assure the capacity of comply with responsabilities.
Deferred costs (Enernova group) - non current relates to up-front rents and surface rights paid to land owners and up-front network rents paid to EDP Distribuição. These costs are deferred on the balance sheet date and are recognised in a straight line basis over the estimated useful life of the assets.
Tax receivable is analysed as follows: Tax receivable
| Group | |||
|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
||
| State and other public entities: | |||
| - Income tax | 7,755 | 3,993 | |
| - Value added tax (VAT) | 150,569 | 89,342 | |
| - Other taxes | 16,769 | 3,500 | |
| 175,093 | 96,835 |
Financial assets at fair value through profit or loss are analysed as follows: Financial assets or loss
| Group | |||
|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
||
| Equity securities: | |||
| Investment funds | 32,369 | 42,841 | |
| Debt securities: | |||
| Unlisted bonds | 3,405 | 1,998 | |
| 35,774 | 44,839 |
The fair value of the investment funds is calculated based on the quoted market price of the funds.
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Cash: | ||
| - Cash in hand | 2 | 2 |
| Bank deposits: | ||
| - Current deposits | 189,895 | 388,295 |
| - Term deposits | - | 195 |
| - Other deposits | 39,783 | - |
| 229,678 | 388,490 | |
| Cash and cash equivalents | 229,680 | 388,492 |
The main operation occurred during 2008 without cash in or out, was the share capital increases in the EDP Renováveis through non monetary contributions (see note 27), and the acquisition of the Romanian companies Renovatio and Cervanoda.
EDP Renováveis was incorporated on 4 December 2007 with a share capital of 15 thousands of Euros, represented by 1,500 shares with a par value of 10 Euros each. These shares were subscribed entirely by EDP Energias de Portugal, S.A. Sucursal en España, (EDP Branch). On 18 and 21 December 2007, EDP Sucursal increased the share capital of EDP Renováveis through the incorporation of the shares held in its subsidiaries NEO - Nuevas Energias de Occidente, S.L. (corresponding to 60% of this company's share capital) and Horizon Wind Energy LLC, (corresponding to 100% of this company's share capital).
On 25 February 2008, the sole Shareholder of EDP Renováveis, approved a share capital increase of 4,718 thousands of Euros with a share premium of 175,490 thousands of Euros, through the issuance of 471,824 new shares with a par value of 10 Euros each and a share premium of 371.94 Euros per share (175,490 thousands of Euros). This capital increase was fully subscribed by Hidroelectrica del Cantábrico, S.A. through a non-monetary contribution of its 40% interest held in Nuevas Energías de Occidente, S.L., the parent company of the NEO Group, obtaining in exchange an interest of 20% in EDP Renováveis. This agreement was executed on a public deed on 29 February 2008. Since that date, EDP Renováveis holds a 100% interest in Nuevas Energías de Occidente, S.L.
The above referred contributions were made under the Special Regime governing mergers, spin offs, asset contributions and share exchanges established in Chapter VIII, Title deed VII of Royal Decree 4 of 5 March 2004, approving the revised corporate income tax law. In compliance with article 93 of Royal Legislative Decree 4 of 5 March 2004, whereby the revised corporate income tax law was approved.
At the annual general meeting held on 12 March 2008 the shareholders agreed to:
Increase the share capital of EDP Renováveis, S.L. with a charge to share premium through the issuance of 205,782,806 shares with a par value of 10 Euros each. This capital increase was subscribed by the shareholders in proportion of the respective shareholdings in EDP Renováveis, S.A.
Reduce the par value of the shares from Euros 10 to 2 Euros per share by splitting the shares representing the total share capital in a proportion of five new shares for each former share. Share capital remained unchanged.
This operation was raised to public deed on 18 March 2008.
At their annual general meeting held on 18 March 2008 the shareholders agreed to convert EDP Renováveis, S.L. into a corporation under the name EDP Renováveis, S.A. The agreement, which was raised to a public deed on 18 March 2008, considers the Company balance sheet as at 17 March 2008 as the conversion balance sheet, replacing the former stakes by shares with the same number and unit value.
On 7 May 2008, EDP, S.A. and Hidrocantabrico approved (i) a share capital increase of EDP Renováveis to 3,381,419,280 Euros. This increase was fully subscribed by EDP, S.A. and Hidrocantabrico through a non monetary contribution of loans granted amounting to 1,040,000 thousands of Euros and 260,000 thousands of Euros, respectively, and (ii) increase of share nominal value from 2 to 5 Euros. After this share capital increase, EDP, S.A. maintained a hold of 80% and Hidrocantabrico a hold of 20% of EDP Renováveis' share capital.
On 13 May 2008, to allow the Initial Public Offering ("IPO"), the General Assembly of EDP Renováveis decided to increase share capital of the Company in a maximum nominal amount of 1,127,139,760 Euros, by issuing of 225,427,952 new shares.
On 2 June 2008, the IPO occurred through the dilution of the interests held by EDP Renováveis shareholders. The number of new shares admitted to negotiation was 196,024,306 shares, and as a consequence, the interest held by EDP, S.A. through its branch in Spain decreased to 62.02% and the interest held by Hidrocantabrico decreased to 15.51% of the EDP Renováveis share capital.
As at 31 December 2008 the share capital of EDP Renováveis is composed of 872,308,162 shares with a nominal value of Euros 5 per share.
Earning per share attributable to the shareholders of EDP Renováveis are analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 |
31 Dec 2007 2007 |
|
| Profit attributable to the equity holders of the parent in thousands of Euros | 104,364 | 1,093 |
| Profit from continuing operations attributable to the equity holders of the parent in thousands of Euros |
104,364 | 1,093 |
| Weighted average number of ordinary shares outstanding | 662,217,700 | 1,792,667 |
| Weighted average number of diluted ordinary shares outstanding | 662,217,700 | 1,792,667 |
| Earnings per share (basic) attributable to equity holders of the parent in Euros | 0.16 | 0.61 |
| Earnings per share (diluted) attributable to equity holders of the parent in Euros | 0.16 | 0.61 |
| Earnings per share (basic) from continuing operations attributable to the equity holders of the parent in Euros |
0.16 | 0.61 |
| Earnings per share (diluted) from continuing operations attributable to the equity holders of the parent in Euros |
0.16 | 0.61 |
The EDP Renováveis Group calculates its basic and diluted earnings per share attributable to equity holders of the parent using the weighted average number of ordinary shares outstanding during the period.
The earning per share for 31 December 2007 has been recalculated based on the nominal value per share for 31 December 2008 (5 Euros).
During 2008 the nominal value per share has been 10 Euros until March and 2 Euros from March until June. From June until year end the nominal value per share was 5 Euros and therefore as at 31 December 2008 the earning per share has been calculated based on a nominal value per share of 5 Euros.
The company does not hold any treasury stock as at 31 December 2008.
The average number of shares was determined as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 31 2008 |
31 Dec 2007 31 Dec 2007 |
|
| Ordinary shares issued at the beginning of the year | 1,887,298 | - |
| Effect of shares issued during the year | 660 330 402 | 1,792,667 |
| Average number of realised shares | 662,217,700 | 1,792,667 |
| Average number of shares during the year | 662,217,700 | 1,792,667 |
| Diluted average number of shares during the year | 662,217,700 | 1,792,667 |
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 |
|
| Fair value reserve (cash flow hedge) | 18,669 | 11,566 |
| Fair value reserve (available for sale financial assets) | 7,747 | |
| Exchange differences arising on consolidation | 1,179 | -819 |
| Additional paid in capital | 60,666 | 119,097 |
| Other reserves and retained earnings: | ||
| Retained earnings | 1,158 | - |
| 89,419 | 129,844 |
The accounting for transactions among entities under common control is excluded from IFRS 3. Consequently, in the absence of specific guidance, within IFRSs, the Group EDP Renováveis has adopted an accounting policy for such transactions, as considered appropriate. According to the Group's policy, business combinations among entities under common control are accounted for in the consolidated annual accounts using the book values of the acquired company (subgroup). The difference between the carrying amount of the net assets received and the consideration paid is recognised in equity.
The variation of 58,431 thousands of Euros in Additional paid in capital relates to the increase in EDP Renováveis shareholding in the NEO Group from 60% to 100%, following a share capital contribution made by Hidrocantábrico. This contribution was recorded in EDP Renováveis annual accounts in accordance with the book values of this shareholding in EDP's consolidated annual accounts, namely financial investments of 180 million Euros. Considering NEO's shareholding equity as at 28 February 2008 of 304 million, of which 122 are attributable to EDP Renováveis shareholding, a negative consolidation reserve of 58 million Euros was accounted for as at 31 December 2008.
The legal reserve has been appropriated in accordance with Article 214 of the Spanish Companies Act whereby companies are obliged to transfer 10% of the profits for the year to a legal reserve until such reserve reaches an amount equal to 20% of the share capital. This reserve is not distributable to shareholders and may only be used to offset losses if no other reserves are available or to increase the share capital.
Profit distribution (parent company)
The proposal for EDP Renováveis, S.A. 2008 profits distribution to be presented in the Annual General Meeting is as follows:
| Company | |
|---|---|
| Profit for the period | 74,794 |
| Distribution | |
| Legal reserve | 7,479 |
| Free reserve | 67,315 |
| 74,794 |
The Fair value reserve (cash flow hedge) comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments.
This reserve includes the accumulated net change in the fair value of available-for-sale financial assets as at the balance sheet date. The changes in this consolidated caption are as follows:
| Group | |||
|---|---|---|---|
| Increases Increases Euro'000 Euro'000 |
Decreases Decreases Euro'000 Euro'000 |
||
| Balance as at 1 January 2008 | - | - | |
| Changes in fair value for Sociedad Eólica de Andalucia | 7,747 | - | |
| Balance as at 31 December 2008 | 7,747 | - |
This caption reflects the amount arising on the translation of the annual accounts of subsidiaries and associated companies from their functional currency into Euros. The exchange rates used in the preparation of the annual accounts are as follows:
| Exchange rates as at 31 Dec 2008 |
Exchange rates as at 31 Dec 2007 |
||||
|---|---|---|---|---|---|
| Currency | Closing Rate |
Average Rate |
Closing Rate |
Average Rate |
|
| Dollar | USD | 1.392 | 1.477 | 1.472 | 1.372 |
| Zloty | PLN | 4.154 | 3.486 | 3.594 | N/A |
| Real | BRL | 3.244 | 2.652 | N/A | N/A |
| Lei | RON | 4.023 | 3.762 | N/A | N/A |
This balance is analysed as follows:
| Group | |||
|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
||
| Minority interest in income statement | 7,854 | 277 | |
| Minority interest in share capital and reserves | 74,897 | 213,296 | |
| 82,751 | 213,573 |
Minority interests , by subgroup, are analysed as follows: Minority interests
| Group | ||||
|---|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|||
| NEO Group | 82,751 | 213,547 | ||
| Horizon Wind Energy Group | 27 | 26 | ||
| EDP Renováveis Brasil | -27 | - | ||
| 82,751 | 213,573 |
The Minority interests of NEO Group for 31 December 2007, has been reclassified due to purchase price allocation carried out in 2008, in the amount of 27,986 thousands of Euros (see note 16).
As at 31 December 2008, the EDP Renováveis Group profit attributable to minority interests amounted to 7,854 thousands of Euros (31 December 2007: 277 thousands of Euros).
In 2008, the amount of minority interests accounted for under the terms of the granted put options of Genesa was 10,058 thousand Euros. These put options were revalued and therefore the liability and Goodwill decreased in the amount of 15,910 thousand Euros (note 16).
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 Euro'000 |
|
| Short-term financial debt - Current | ||
| Bank loans: | ||
| - NEO Group | 75,950 | 80,016 |
| Loans from shareholders of group entities: | ||
| - NEO Group | 3,956 | 116,502 |
| - Horizon Wind Energy Group | - | 320,926 |
| Other loans: | ||
| - NEO Group | 3,277 | - |
| Interest payable | 2,982 | - |
| 86,165 | 517,444 | |
| Medium/long-term financial debt - Non-current | ||
| Bank loans: | ||
| - NEO Group | 451,062 | 398,233 |
| Loans from shareholders of group entities: | ||
| - NEO Group | 34,394 | 1,931,896 |
| - EDP Renováveis, S.A. | 862,817 | |
| Other loans: | ||
| - NEO Group | 27,835 | 34,500 |
| 1,376,108 | 2,364,629 | |
| 1,462,273 | 2,882,073 |
Financial debt - Current for EDP Renováveis, amounting to 862,817 thousands of Euros, refers to a set of loans granted by EDP Branch. These loans have an average maturity of 9.75 years and bear interest at a fixed rate of 4.413%.
The Group has project finance financings that include the usual guarantees on this type of financings, namely the pledge or a promise of pledge of bank accounts and assets of the related projects. As at 31 December 2008, these financings show a total amount of 478,904 thousands of Euros (476,334 thousands of Euros as at 31 December 2007), which are already included in the total debt of the Group.
The breakdown of Financial debt by maturity, is as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
|
| Bank loans: | ||
| Up to 1 year | 75 950 | 77,724 |
| 1 to 5 years | 193 750 | 188,454 |
| Over 5 years | 257 312 | 244,279 |
| 527,012 | 510,457 | |
| Loans from shareholders of group entities:: | ||
| Up to 1 year | 3,956 | 439,720 |
| 1 to 5 years | 34,394 | 1,003,041 |
| Over 5 years | 862,817 | 928,855 |
| 901,167 | 2,371,616 | |
| Other loans: | ||
| Up to 1 year | 6 259 | - |
| 1 to 5 years | 7 851 | - |
| Over 5 years | 19 984 | - |
| 34,094 | - | |
| 1,462,273 | 2,882,073 |
The fair value of EDP Renováveis Group's debt is analysed as follows:
| 31 Dec 2008 | 31 Dec 2007 | |||
|---|---|---|---|---|
| Carrying Carrying Value Value Euro'000 Euro'000 |
Market Market Value Value Euro'000Euro'000 Euro'000 |
Carrying Carrying Carrying Value Euro'000 Euro'000Euro'000 |
Market Value Euro'000 Euro'000 |
|
| Short term financial debt - Current Medium/Long financial debt - Non current |
86,165 1,376,108 |
86,165 1,414,824 |
517,444 2,364,629 |
517,444 2,424,153 |
| 1,462,273 | 1,500,989 | 2,882,073 | 2,941,597 |
The market value of the medium/long-term (non-current) debt and borrowings that bear a fixed interest rate is calculated based on the discounted cash flows at the rates ruling at the balance sheet date. The market value of debt and borrowing that bear a floating interest rate is considered not to differ from its book value as these loans bear interest at a rate indexed to Euribor. The book value of the short-term (current) debt and borrowings is considered to be the market value.
As at 31 December 2008, the scheduled repayments of Group's debt are as follows:
| Total Euro'000 Euro'000 |
2009 2009 Euro'000 Euro'000 |
2010 2010 Euro'000 Euro'000 |
2011 Euro'000 Euro'000 |
2012 Euro'000 Euro'000Euro'000 |
2013 Euro'000 Euro'000 |
Subsequent years Euro'000 Euro'000 |
|
|---|---|---|---|---|---|---|---|
| Medium/long-term debt and borrowings Short term debt and borrowings |
1,376,108 86,165 |
- 86,165 |
93,837 - |
47,348 - |
46,813 - |
47,997 - |
1,140,113 - |
| 1,462,273 | 86,165 | 93,837 | 47,348 | 46,813 | 47,997 | 1,140,113 |
Group
The breakdown of guarantees is presented in Note 36 to the annual accounts.
The breakdown of Finance debt, by currency, is as follows:
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 Euro'000 |
|
|---|---|---|
| Loans denominated in Euros | 599,456 | 2,561,147 |
| Loans denominated in USD | 862,817 | 320,926 |
| 1,462,273 | 2,882,073 |
Employee benefits balance are analysed as follows: Employee benefits
| Group | |||
|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
||
| Provisions for social liabilities and benefits Provisions for liabilities and social benefits |
780 | 834 | |
| Provisions for healthcare liabilities Provisions for liabilities related to medical care and other benefits |
382 | 377 | |
| 1,162 | 1,211 |
As at 31 December 2008 and 31 December 2007, the caption "Provisions for liabilities and social benefits" refers exclusively to defined benefit plans.
The liabilities arising from pension and healthcare plans are fully covered, either by plan assets or provisions.
The responsabilities and the assets from pension and healthcare pension plans have no significant amount.
Some EDP Renováveis Group companies grant post-retirement benefits to employees, under defined benefit plans, namely pension plans that ensure retirement complements to age, disability and surviving pensions, as well as retirement pensions. In some cases healthcare care is provided during retirement and early retirement, through mechanisms complementary to those provided by the National Health Service.
The existing plans are presented hereunder, with a brief description of each and of the companies covered by them, as well as of the economic and financial data:
The EDP Renováveis Group companies in Portugal have a social benefits plan funded by a restricted Pension Fund, complemented by a specific provision. The EDP Pension Fund is managed by Pensõesgere being the management of the assets subcontracted to external asset management entities.
This Pension Fund covers the liability for retirement pension complements (age, disability and survivor pension) as well as the liability for early retirement.
The following financial and actuarial assumptions were used to calculate the liability of the EDP Renováveis Group pension plans:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 |
31 Dec 2007 2007 |
|
| Assumptions | ||
| Expected return of plan assets | 6.00% | 6.00% |
| Discount rate | 5.75% | 5.30% |
| Salary increase rate | 3.70% | 3.70% |
| Pension increase rate | 2.90% | 2.90% |
| Social Security salary appreciation | 2.10% | 2.10% |
| Inflation rate | 2.20% | 2.20% |
| Mortality table | TV 88/90 | TV 88/90 |
| Disability table | 50.00% | 50.00% |
| Expected % of eligible employees accepting | 40.00% | 40.00% |
| early retirement |
NEO in Spain, has social benefit plans of defined contribution that complement those granted by the Social Welfare System to the companies' employees, under which they pay a contribution to these plans each year, calculated in accordance with the rules established in each case.
The Group companies in Portugal resulting from the spin-off of EDP in 1994 have a Medical Care Plan which is fully covered by a provision.
The actuarial assumptions used to calculate the liability for Medical Care Plans are as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 |
31 Dec 2007 2007 |
|
| Assumptions | ||
| Discount rate | 5.75% | 5.30% |
| Annual increase rate of medical service costs | 4.00% | 4.00% |
| Estimated administrative expenses per beneficiary per year (Euros) | 150 | 150 |
| Mortality table | TV 88/90 | TV 88/90 |
| Disability table | 50.00% | 50.00% |
| Expected % of subscription of early retirement by employees eligible | 40 | 40 |
The Medical Plan liability is recognised in the Group's accounts through provisions that totally cover the liability.
Provisions are analysed as follows: Provisions
| Group | |||
|---|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 |
||
| Provision for legal, labour and other contingencies | 278 | 12 | |
| Provision for customers guarantees | 270 | 301 | |
| Dismantling and decommission provisions | 47,311 | 20,280 | |
| Provision for other liabilities and charges | 1,839 | 2,004 | |
| 49,698 | 22,597 |
Dismantling and decommission provisions refer to the costs to be incurred with dismantling wind farms and restoring of sites and land to their original condition, in accordance with the accounting policy described in Note 2 n). The above amount includes 39,240 thousands of Euros for wind farms in the United States of America, 6,086 thousands of Euros for wind farms in Spain, 1,577 thousands of Euros for wind farms in Portugal and the remaining 408 thousands of Euros for wind farms in France.
The EDP Renováveis Board of Directors believes that the provisions booked on the consolidated balance sheet adequately cover the risks described in this note. Therefore, it is not expected that they will give rise to liabilities in addition to those recorded.
As at 31 December 2008, the EDP Renováveis Group does not have any significant tax-related contingent liabilities or contingent assets related to unresolved disputes with the tax authorities.
The changes in the provisions for legal and labour matters and other contingencies were as follows:
| Group | |
|---|---|
| 31 Dec 2008 Euro'000 |
|
| Balance at the beginning of the year | 12 |
| Charge for the year | 266 |
| Balance at the end of the year | 278 |
The movements in Provisions for customer guarantees under current operations are analysed as follows:
| Group | |
|---|---|
| 31 Dec 2008 | |
| Euro'000 | |
| Balance at the beginning of the year | 301 |
| Charge for the year | 250 |
| Write back for the year | -281 |
| Balance at the end of the year | 270 |
The movements in Provisions for dismantling and decommission provisions are analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 | ||
| Euro'000 | ||
| Balance at the beginning of the year | 20,280 | |
| Capitalised amount for the year | 26,490 | |
| Charge off for the year | -3,830 | |
| Unwinding | 2,157 | |
| Other and exchange differences | 2,214 | |
| Balance at the end of the year | 47,311 |
The movements in Provision for other liabilities and charges are analysed as follows:
| Group 31 Dec 2008 Euro'000 |
|
|---|---|
| Balance at the beginning of the year Write back for the year |
2,004 -165 |
| Balance at the end of the year | 1,839 |
This balance is analysed as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 |
|
| Short-term trade and other payables - Current: | ||
| Suppliers | 78,141 | 20,168 |
| Other operations with related parties | 8,837 | - |
| Property and equipment suppliers | 424,920 | 287,066 |
| Advances from customers | 22 | 7,155 |
| Derivative financial instruments (Hedging) | - | 1,400 |
| Deferred income | 857 | 708 |
| Amounts payable for the acquisition of the "RELAX" project | - | 2,267 |
| Variable remuneration to employees | 19,662 | 5,730 |
| Other supplies and services | 68,821 | 38,224 |
| Deposits received from customers and other debtors | - | 7,215 |
| Management fees | 5,181 | - |
| Other creditors and sundry operations | 41,893 | 28,260 |
| 648,334 | 398,193 | |
| Group | ||
| 31 Dec 2008 2008 |
31 Dec 2007 31 Dec 2007 |
|
| Euro'000 Euro'000 |
Euro'000 | |
| Medium/long-term trade and other payables – Non-current: | ||
| Property and equipment suppliers | 131 | - |
| Amounts payable for the acquisition of the "RELAX" project | 46,279 | 46,735 |
| Amounts payable for the acquisition of Greenwind | 7,114 | - |
| Government grants for investments in fixed assets | 15,034 | 10,528 |
| Electricity sale contracts - Horizon Derivative financial instruments (Hedging) |
119,655 77,022 |
125,735 - |
| Sucess fees payable for the acquisition of Romania companies | 63,000 | - |
| Liabilities arising from options with minority interests | 258,925 | 264,893 |
| Liabilities arising from institutional partnerships in US wind farms | 1,096,668 | 733,273 |
| Other creditors and sundry operations | 11,559 | 1,889 |
| 1,695,387 | 1,183,053 |
Derivative financial instruments (Hedging) - Non Current includes 65,478 thousands of Euros (on 31 December 2007 a debtor balance of 37,993 thousands of Euros) related to an hedge instrument of USD and Euros with EDP Branch, which was formalised in order to hedge the foreign exchange risk of the net investment held in Horizon, expressed in USD (see Note 35). In the Group accounts, EDP Renováveis Group has applied the net investment hedge model to state this transaction.
Electricity sales contracts - Horizon relates to the fair value of the contracts entered into by Horizon with its customers, determined under the Purchase Price Allocation (see note 6).
As referred in note 2b) the EDP Renováveis Group records written put options related with investments in subsidiaries held by minority interest at the date of acquisition of a business combination or at a subsequent date as an advance acquisition of these interests, recording a financial liability for the present value of the best estimate of the amount payable, irrespective of the estimated probability that the options will be exercised. As at 31 December 2008 the liabilities arising from written put options with minority interests include the liability for the put option contracted in 2005 with Caja Madrid for a 20% interest in the Desa Group and the written put option contracted in 2007 with Caja Madrid for 20% of the Genesa Group and amount to 258,925 thousands of Euros. Also, as referred in note 16, the option conditions (both for Desa and Genesa) are as follows:
• The timeframe is from 1 January 2010 to 2011, inclusive.
• The contract is for the total shares in Neo Group companies held by Caja Madrid, 20% in Genesa Group and 20% in Desa Group.
• The strike price will be the market value determined by valuations from prestigious banks.
Liabilities arising from institutional partnerships in US wind farms, in the amount of 1,096,668 thousands of Euros, are analysed as follows:
| 31 Dec 2008 Euro'000 |
|
|---|---|
| Balance as of 1 January | 733,273 |
| Exchange rate differences | 60,813 |
| Proceeds from sale of partnership interests | 319,986 |
| Value of benefits provided | -226,380 |
| Cash distributions | -219 |
| Interest implied return | 43,631 |
| Subtotal subject to interest | 931,104 |
| Liability for residual interest | 3,840 |
| Non-current deferred revenue | 161,724 |
| Balance as of 31 December | 1,096,668 |
The amount of Proceeds from sale of partnership interests is related with the projects Vento II (165,000 thousands of Euros) and Vento III (154,000 thousands of Euros).
Horizon's relationship with the institutional investors is established through a limited liability company operating agreement that apportions the cash flows generated by the wind farms between the investors and the Company and allocates the tax benefits, which include Production Tax Credits (PTC) and accelerated depreciation, largely to the investor.
The institutional investors purchase their partnership interests for an upfront cash payment. This payment is sized so that the investors, as of the date that they purchase their interest, anticipate earning an agreed targeted internal rate of return by the end of the ten year period over which PTC's are generated. This anticipated return is computed based on the total anticipated benefit that the institutional investors will receive and includes the value of PTC's, allocated taxable income or loss and cash distributions received.
Under these structures, all operating cash flow is allocated to Horizon until the earlier of a fixed date, or when the investors recover the amount of invested capital that remains after deducting the amount of the payment received from the institutional investors from the total amount previously invested. This "cash flip" is expected to occur approximately seven to eight years from the initial closing date. Thereafter, all operating cash flow is allocated to the institutional investors until they receive the targeted internal rate of return (the "Flip Date").
Prior to the Flip Date, a significant part of the tax income and benefits generated by the partnerships are allocated to the institutional investor, with any remaining benefits allocated to Horizon.
After the Flip Date, the institutional investor retains a small minority interest for the duration of its membership in the structure. Horizon also has an option to purchase the institutional investor's residual interests at fair market value on the Flip Date.
As of 31 December 2008, Horizon had the following institutional equity partnerships:
| Cash Interest |
|||
|---|---|---|---|
| Structure | Wind Farm | Date Created | Ownership |
| Blue Canyon I | Blue Canyon I | Dec. 2003 | 25% |
| 2007 Vento I | Maple Ridge I(1) Maple Ridge II(1) Madison Blue Canyon II Mesquite High Trail |
July 2007 | 100% |
| 2007 Vento II | Twin Groves II Elkhorn Valley Prairie Star Lone Star II |
December 2007 | 100% |
| 2008 Vento III(3) | Pioneer Prairie I Rattlesnake Meridian Way |
December 2008 | 100% |
(1) Horizon's 50% interest
(2) Post Oak contributed in 2008 upon completion of construction
(3) Pioneer Prairie II is anticipated to be contributed in the first quarter of 2009 in exchange for additional investment. At December 31, 2008, Horizon had retained 50% of the Vento III shares available for institutional investors.
Horizon records the proceeds received from the sale of the investment interests in the partnerships as a non-current liability. This liability is reduced by the value of tax attributes provided and cash distributions made to the institutional investors during the period. The value of the tax attributes delivered is recorded as non-current deferred income and is reclassified to income and is recognized pro rata over the 20 year useful life of the underlying projects.
The liability to the institutional investors is increased by an interest accrual that is a function of the outstanding liability balance and the targeted internal rate of return.
At the Flip Date, the institutional investors will be granted a 5% ownership interest in the partnerships. Horizon has the right to purchase the institutional investors' interests in the project for the then fair value of those interests.
This balance is analysed as follows:
| Group | |||
|---|---|---|---|
| 31 Dec 2008 Euro'000 Euro'000 |
31 Dec 2007 Euro'000 |
||
| State and other public entities: | |||
| - Income tax | 18,153 | 6,940 | |
| - Withholding tax | 19,832 | 3,650 | |
| - Value added tax (VAT) | 6,380 | 2,564 | |
| - Other taxes | 1,896 | 491 | |
| 46,261 | 13,645 |
In accordance with IAS 39, the Group classifies the derivative financial instruments as a fair value hedge of an asset or liability recognised and as a cash flow hedge of recorded liabilities and forecast transactions considered highly probable.
The fair value of the derivatives portfolio as at 31 December 2008 and 31 December 2007 is as follows:
| Group | ||
|---|---|---|
| 31 Dec 2008 Euro'000 |
31 Dec 2007 Euro'000 |
|
| Net investment hedge | ||
| Currency swaps | -65,478 | 37,994 |
| Cash flow hedge | ||
| Currency swaps | - | 7,189 |
| Power price swaps | 7,807 | - |
| Interest rate swaps | -10,481 | 4,445 |
| Currency forwards | 1,527 | - |
| Options purchase and sold | -961 | 33 |
| -67,586 | 49,661 |
The fair value of derivative financial instruments is recorded under Debtors and other assets (note 23) or Trade and other payables (note 33), if the fair value is positive or negative, respectively.
The fair value hedge derivatives are related to the Group CIRS in USD and EUR with EDP Branch as referred in the notes 37 and 38. The fair value is based on internal valuation models, as describes in note 38.
Cash flow hedge currency swaps are related to exchange rate risk in Neólica Polska, derived from the supplying contracts defined in Euros, for which will be necessary financings in Polish Zlotis.
Cash flow hedge power price swaps are related to the hedging of the sales price. Horizon has entered into a power price swap to hedge the variability in the spot market prices received for a portion of the production of Maple Ridge I project and NEO for the production of some of its wind farms.
Interest rate swaps are related to the project finances and intend to convert variable to fixed interest rates .
Fair value of cash flow hedge derivatives is based on quotes indicated by external entities (investment banks). These entities use discount cash flows techniques usually accepted and data from public markets.
During 2008, the changes in the fair value of hedging instruments and risks being hedged are as follows:
| 31 Dec 2008 | ||||
|---|---|---|---|---|
| Changes in fair value | ||||
| Type of hedge hedge |
Hedging Hedging instrument instrument |
Hedged item item |
Instrument Instrument Euro'000 Euro'000 |
Risk Risk Euro'000 Euro'000 |
| - Net Investment hedge | Interest and exchange rate swap | Subsidiary accounts denominated in USD | -103,472 | 103,314 |
| - Cashflow hedge | Interest rate swap | Interest rate | -14,926 | - |
| - Cashflow hedge | Interest rate caps and floors | Interest rate | -994 | - |
| - Cashflow hedge | Power price swap | Power price | 7,807 | - |
| - Cashflow hedge | Exchange rate forward | Exchange rate | 1,527 | - |
| - Cashflow hedge | Exchange rate swap | Exchange rate | -7,189 | - |
-117,247 103,314
During 2008, the movements in cash flow hedge reserve have been as follows:
| 2008 | |
|---|---|
| Euro'000 | |
| Balance at the beginning of the year | 12,598 |
| Fair value changes | |
| Interest rate swaps | -14,926 |
| Interest rate caps and floors | -994 |
| Power price swaps | 7,807 |
| Exchange rate forward | 1,527 |
| Exchange rate swaps | -7,189 |
| Fair value changes reflected in income statement before the hedge designation of the Power price swap in Horizon | 5,266 |
| Settlements of exchange rate swaps waiting for the hedge item to hit P&L | 12,020 |
| Transfers to results | -935 |
| Minority interests included in fair value changes | 1,351 |
| Balance at the end of the year | 16,526 |
The gains and losses on the financial instruments portfolio booked in the income statement in 2008 are as follows:
| Dez 2008 Euro'000 |
|
|---|---|
| Net investment hedge - inefectiveness | -158 |
| Cash-flow hedge | |
| Fair value changes reflected in income statement before the hedge designation of the Power price swap in Horizon | -5,266 |
| Transfers to results | 935 |
| Settlements of interest rate derivatives directly reflected in P&L | 518 |
| -3,971 |
As of 31 December 2008, the maturity of derivatives associated to financing operations, is analysed as follows:
| Group | ||||
|---|---|---|---|---|
| Up to to 1 year 1 year Euro'000 Euro'000 |
1 year 1 year to 5 years years to 5 years Euro'000 Euro'000 Euro'000 |
More than More than 5 years 5 5 years Euro'000 Euro'000 |
Total Euro'000 Euro'000 |
|
| Net investment hedge Currency swaps |
- | - | 1,826,174 | 1,826,174 |
| - | - | 1,826,174 | 1,826,174 | |
| Cash Flow Hedge: | ||||
| Interest rate swaps | 4,815 | 36,359 | 303,573 | 344,747 |
| Currency forwards | 99,463 | - | - | 99,463 |
| Options purchase and sold | 464 | 59,383 | 6,199 | 66,046 |
| 104,742 | 95,742 | 2,135,946 | 2,336,430 |
As of 31 December 2007, the maturity of derivatives associated to financing operations, is analysed as follows:
| Group | |||||
|---|---|---|---|---|---|
| Up to to 1 year 1 year Euro'000 Euro'000 |
1 year 1 year to 5 years years to 5 years Euro'000 Euro'000 Euro'000 |
More than More than 5 years 5 5 years Euro'000 Euro'000 |
Total Euro'000 Euro'000 |
||
| Net investment hedge Currency swaps |
- | - | 1,826,174 | 1,826,174 | |
| - | - | 1,826,174 | 1,826,174 | ||
| Exchange rate contracts: | |||||
| Currency swaps | 93,039 | - | - | 93,039 | |
| Interest rate swaps | 58,744 | 130,029 | 146,530 | 335,303 | |
| Options purchase and sold | 16,450 | 65,711 | 2,627 | 84,788 | |
| 168,233 | 195,740 | 1,975,331 | 2,339,304 |
The effective interest rates for derivative financial instruments associated with financing operations during 2008, were as follows:
| Group | ||||
|---|---|---|---|---|
| Currency | EDP Renováveis Pays | EDP Renováveis Receives | ||
| Interest rate contracts: Interest rate swaps |
EUR | [ 3.00% - 5.10%] |
[ 3.00% - 5.14%] |
|
| Notional value Euro'000 |
Group | |||
| Interest rate contracts: Options purchased on interest rates (CAP purchases) |
37,425 | [ 5.75% - 3.89%] |
||
| Options sold on interest rates (Floor sale) | 28,611 | [ 4.27% - 3.06%] |
The effective interest rates for derivative financial instruments associated with financing operations during 2007, were as follows:
| Group | ||||
|---|---|---|---|---|
| Currency | EDP Renováveis Pays | EDP Renováveis Receives | ||
| Interest rate contracts: Interest rate swaps |
EUR | [ 3.00% - 5.15%] |
[ 3.85% - 4.95%] |
|
| Notional value Euro'000 |
Group | Company Dec 2008 | ||
| Interest rate contracts: | ||||
| Options purchased on interest rates (CAP purchases) | 48,921 | [ 5.75% - 4.00%] |
- - |
|
| Options sold on interest rates (Floor sale) | 35,867 | [ 4.27% - 3.12%] |
- - |
As at 31 December 2008 and 31 December 2007, the financial commitments not included in the balance sheet in respect of financial and real guarantees provided, are analysed as follows:
| Group | ||
|---|---|---|
| Type | 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 |
| Guarantees of a financial nature | ||
| - NEO Energia Group | 6,341 | 26,306 |
| - NEO Group - Horizon Wind Energy Group | 3,233 | 3,057 |
| 9,574 | 29,363 | |
| Guarantees of an operational nature | ||
| - NEO Energia Group | 401,647 | 40,034 |
| - Horizon Wind Energy Group | 907,363 | 542,564 |
| 1,309,010 | 582,598 | |
| Total | 1,318,584 | 611,961 |
| Real guarantees | 719 | 3,458 |
The EDP Renováveis Group financial debt, lease and purchase obligations by maturity date are as follows:
| 31 Dec 2008 | |||||
|---|---|---|---|---|---|
| Debt capital by period | |||||
| Total Total Euro'000 Euro'000 |
Up to 1 to 1 year year Euro'000 Euro'000 |
1 to 3 3 years Euro'000 Euro'000 |
3 to 5 years Euro'000 Euro'000Euro'000 |
More than More than 5 years Euro'000 |
|
| Financial debt (including interests) | 1,966,109 | 153,302 | 219,729 | 208,100 | 1,384,978 |
| Operating lease rents not yet due | 485,485 | 28,774 | 59,248 | 54,858 | 342,606 |
| Purchase obligations | 1,856,876 | 1,311,393 | 347,409 | 172,068 | 26,005 |
| 4,308,470 | 1,493,469 | 626,386 | 435,026 | 1,753,589 | |
| 31 Dec 2007 | |||||
| Debt capital by period | |||||
| Total Total Euro'000 Euro'000 |
Up to 1 to 1 year year Euro'000 Euro'000 |
1 to 3 3 years Euro'000 Euro'000 |
3 to 5 years Euro'000 Euro'000Euro'000 |
More than More than 5 years Euro'000 |
|
| Financial debt (including interests) | 3,013,510 | 528,071 | 455,871 | 443,342 | 1,586,226 |
| Operating lease rents not yet due | 325,731 | 16,975 | 42,208 | 26,835 | 239,713 |
| Purchase obligations | 2,487,874 | 1,204,679 | 1,277,789 | 518 | 4,888 |
| 5,827,115 | 1,749,725 | 1,775,868 | 470,695 | 1,830,827 |
Purchase obligations include debts related with long-term agreements of product and services supply related to the Group operational activity. When prices are defined under "forward" contracts, these are used in estimating the amounts of the contractual commitments.
The Group has purchase commitments for the acquisition of property, plant and equipment and for maintenance contracts obligations amounting to 1.996.621 thousands of Euros related to the acquisition of wind turbines for projects currently in the construction and development stages, which have been contracted with different suppliers of this type of installations. The breakdown per years is as follows:
| NEO NEO |
Horizon Horizon Horizon |
Group | NEO | Horizon Horizon | Group | |
|---|---|---|---|---|---|---|
| 31 Dec 2008 Dec 2008 Euro'000 Euro'000 |
2008 2008 31 Dec 2008 Euro'000 Euro'000 |
31 Dec 2008 Dec 2008 Euro'000 Euro'000 |
31 Dec 2007 2007 Euro'000 Euro'000 |
31 Dec 2007 31 Dec 2007 Euro'000 Euro'000 Euro'000 |
31 Dec 2007 Euro'000 |
|
| Up to 1 year | 900,112 | 407,723 | 1,307,835 | 744,147 | 422,515 | 1,166,662 |
| 1 to 5 years | 333,366 | 213,252 | 546,619 | 311,404 | 957,671 | 1,269,075 |
| Over 5 years | 26,005 | 116,162 | 142,167 | 4,888 | - | 4,888 |
| 1,259,483 | 737,138 | 1,996,621 | 1,060,439 | 1,380,186 | 2,440,625 |
As at 31 December 2008 the Group has the following contingent liabilities/rights related with call and put options on investments:
EDP Renováveis, through its subsidiary NEO, holds a call option over Caja Madrid for all the shares held by Caja Madrid on companies of the NEO sub-group (20% of Genesa). Caja Madrid holds an equivalent put option on these shares over EDP Renováveis. The price of exercising these options will be determined under an investment bank valuation process. The options can be exercised between 1 January 2010 and 1 January 2011, inclusively (see note 33).
EDP Renováveis, through its subsidiary NEO, holds a call option over Cajastur for all the shares held by Cajastur on company "Quinze Mines" (51% of share capital). Cajastur holds an equivalent put option on these shares over EDP Renováveis. The price of exercising these options will be determined under an investment bank valuation process. The options can be exercised between 1 January 2012 and 1 January 2013, inclusively.
EDP Renováveis, through its subsidiary Veinco Energía Limpia, S.L., holds a call option over Jorge, S.L. for 8.5% of interest held by Jorge, S.L. on company "Apineli Aplicaciones industriales de energías limpias, SL". The price of exercising these options is 900 thousands of Euros. The option can be exercised when Jorge, S.L. obtain the licenses to amplify the windfarms "Dehesa del Coscojar" and "El Águila", until 30 days after the notification of the suspensive condition with a limit date of 18 April 2014.
EDP Renováveis, through its subsidiary NEO, holds a call option over Copcisa for all the shares held by Copcisa on company "Neo Cataluña" (49% of share capital) (see note 16).
EDP Renováveis, through its subsidiary NEO, holds a call option over Renovatio Group Limited for the interests held by Renovatio Group Limites on companies "Renovatio" and "Cernadova" (see note 16).
EDP Renováveis, S.A..'s shareholder structure as at 31 December 2008 is analysed as follows:
| N.º of Shares Shares |
% Capital Capital |
% Voting rights | |
|---|---|---|---|
| EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) | 541,027,156 | 62.02% | 62.02% |
| Hidroeléctrica del Cantábrico, S.A. | 135,256,700 | 15.51% | 15.51% |
| Other shareholders | 196,024,306 | 22.47% | 22.47% |
| 872,308,162 872,308,162 |
100.00% 100.00% |
100.00% |
The number of shares held by company officers as at 31 December 2008 are as follows:
| 2008 | |
|---|---|
| N.º of shares | |
| Executive Board of Directors | |
| Antonio Luis Guerra Nunes Mexía | 4,200 |
| Ana Mª Machado Fernandes | 1,510 |
| Joao Manuel Manso Neto | - |
| Nuno María Pestana de Almeida Alves | 5,000 |
| Antonio Fernando Melo Martins da Costa | 1,480 |
| Francisco José Queiroz de Barros de Lacerda | 620 |
| Joao Manuel de Mello Franco | 380 |
| Jorge Manuel Azevedo Henriques dos Santos | 200 |
| José Silva Lopes | 760 |
| José Fernando Maia de Araujo e Silva | 80 |
| Rafael Caldeira de Castel-Branco Valverde | - |
| Antonio do Pranto Nogueira Leite | - |
| Joao José Belard da Fonseca Lopes Raimundo | 840 |
| Daniel M. Kammen | - |
| Manuel Menéndez Menéndez | - |
| 15,070 |
The members of Board of Directors of EDP Renováveis has not comunicated and the parent company do not have knowledge of any conflict of interests included in the article 127.º, 4.º of "Ley de Sociedades Anónimas".
The board members of parent company, complying with the article 127.º, 4.º of the "Ley de Sociedades Anónimas", declared that do not have exercised positions of responsability in companies with the same, similar or complementar activity of EDP Renováveis Group parent company, and they do not have realized by their own or to third entities any activity in companies with the same, similar or complementar activity of EDP Renováveis Group parent company, with the following exceptions (includes information about external and Group EDP entities):
| Name of Board member | Company | Position |
|---|---|---|
| António Luis Guerra Nunes Mexia | EDP - Energias de Portugal, S.A. | Chairman of Board of Directors |
| Energias do Brasil, S.A. | Chairman of Board of Directors | |
| EDP Energías de Portugal, S.A. Sucursal en España | Representative | |
| EDP Finance BV | Representative | |
| Ana Maria Machado Fernandes | EDP - Energias de Portugal, S.A. | Board of Directors member |
| Energias do Brasil, S.A. | Board of Directors member | |
| Nuevas Energías de Occidente, S.L. | Chairman of Board of Directors | |
| Horizon Wind Energy, LLC | Board of Directors member | |
| EDP Energías de Portugal, S.A. Sucursal en España | Representative | |
| EDP Finance BV | Representative | |
| Hidroeléctrica del Cantábrico, S.A. | Board of Directors member | |
| ENEOP - Eólicas de Portugal, S.A. | Chairman of Board of Directors | |
| António Fernando Melo Martins da Costa | EDP - Energias de Portugal, S.A. | Board of Directors member |
| Name of Board member | Company Company |
Position Position |
|---|---|---|
| Nuno Maria Pestana de Almeida Alves | Balwerk - Consultadoria Económica e Participações, S.U., Lda. |
Manager |
| Electricidade de Portugal Finance Company Ireland, Lt. |
Director | |
| EDP - Energias de Portugal, S.A. | Board of Directors member and CFO |
|
| EDP - Investimentos, Gestão de Participações e Assistência Técnica, Lda. |
Board of Directors member | |
| Energias do Brasil, S.A. | Board of Directors member | |
| EDP Imobiliária e Participações, S.A. | Chairman of Board of Directors | |
| EDP Valor - Gestão Integrada de Serviços S.A. | Chairman of Board of Directors | |
| Energia RE, S.A. | Chairman of Board of Directors | |
| EDP Finance BV | Representative | |
| EDP Renováveis, S.A. | Board of Directors member | |
| Horizon Wind Energy, LLC | Board of Directors member | |
| MRH Mudança e Recursos Humanos, S.A. | Chairman of Board of Directors | |
| EDP Estudos e Consultoria, S.A. | Chairman of Board of Directors | |
| EDP Gás III, SGPS., S.A. | Board of Directors member | |
| EDP Investimentos, S.G.P.S., S.A. | Board of Directors member | |
| Manuel Menéndez Menéndez | Naturgás Energía Grupo, S.A. | Chairman of Board of Directors |
| Nuevas Energías de Eccidente, S.L. | Board of Directors member | |
| Hidroeléctrica del Cantábrico, S.A. | Chairman of Board of Directors | |
| Enagás, S.A. | Representative of an entity in the Board of Directors |
|
| João Manuel Manso Neto | Naturgás Energia Grupo, S.A. | Vice-Chairman of Board of Directors |
| Eléctrica de la Ribera del Ebro, S.A. | Chairman of Board of Directors | |
| Hidrocantábrico Energía, S.A.U. | Chairman of Board of Directors | |
| Hidrocantábrico Gestión de Energía, S.A.U. | Board of Directos sole member | |
| EDP - Energias de Portugal, S.A. | Board of Directors member | |
| EDP - Gestão da Produção de Energia, S.A. | Chairman of Board of Directors | |
| EDP Gás, S.G.P.S., S.A. | Chairman of Board of Directors | |
| EDP Gás II, S.G.P.S., S.A. | Chairman of Board of Directors | |
| EDP Gás III, S.G.P.S., S.A. | Chairman of Board of Directors | |
| EDP Investimentos S.G.P.S., S.A. | Chairman of Board of Directors | |
| EDP Gás GPL - Comércio de Petróleo Liquefeito, S.A. | Chairman of Board of Directors | |
| EDP Finance, B.V. | Representative | |
| Hidroeléctrica del Cantábrico, S.A. | Vice-Chairman of Board of | |
| Name of Board member | Company | Position |
|---|---|---|
| João Manuel Manso Neto | EDP Energías de Portugal, S.A. Sucursal en España | Representative |
| Operador del Mercado Ibérico de Energia - Pólo Español, S.A. |
Chairman of Board of Directors | |
| António do Pranto Nogueira Leite | EFACEC Capital, SGPS, S.A. | Board of Directors member |
| João José Belard da Fonseca Lopes Raimundo | Fomentivest, SGPS, S.A. | Board of Directors member |
Additionally the board members have comunicated that do not own any interest in the share capital of other company with the same, similar or complementar activity of EDP Renováveis Group, with the following exceptions:
| Name of Board member | Company Company |
Number of shares of shares |
|---|---|---|
| António Luis Guerra Nunes Mexia | EDP - Energias de Portugal, S.A. | 1,000 |
| João Manuel Manso Neto | EDP - Energias de Portugal, S.A. | 1,268 |
| João José Belard da Fonseca Lopes Raimundo | REN - Redes Energéticas Nacionais, SGPS, S.A. | 150 |
| Jorge Manuel Azevedo Henriques dos Santos | EDP - Energias de Portugal, S.A. | 2,379 |
| Nuno Maria Pestana de Almeida Alves | EDP - Energias de Portugal, S.A. | 40 |
In accordance with the Company's by-laws, the remuneration of company officers is set by a Remuneration Committee appointed by the Shareholders' General Meeting, except for the fixed and variable remuneration of the members of the Executive Board of Directors, which is set by a Remuneration Committee appointed by the General and Supervisory Board.
The remuneration attributed to the members of the Executive Board of Directors (EBD) 2008 was as follows:
| EBD | |
|---|---|
| Euros | |
| CEO | 235,200 |
| Members | 277,083 |
| 512,283 |
The remuneration of the CEO of Board of Directors for the year 2008 has been liquidated by EDP Energias de Portugal, S.A.. This amount will be liquidated through the management fees agreement signed by both companies.
The remuneration of the Key Management of EDP Renováveis Group for the year 2008 has been 8,307 thousands of Euros.
As at 31 December 2008, assets and liabilities with related parties, are analysed as follows:
| Assets Assets Euro'000 Euro'000 |
Liabilities Liabilities Euro'000Euro'000 Euro'000 |
Net Euro'000 Euro'000 |
|
|---|---|---|---|
| EDP Energias de Portugal, S.A. | 6,684 | 10,965 | (4,281) |
| EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) | 24,416 | 931,140 | (906,724) |
| Group EDP companies | 120,943 | 2,000 | 118,943 |
| Hidrocantábrico Group companies | 21,464 | 6,154 | 15,310 |
| Associated companies | 14,018 | - | 14,018 |
| Jointly controlled entities | 8,344 | 840 | 7,504 |
| Other | - | 185 | (185) |
| 195,869 | 951,284 | (755,415) |
Liabilities includes essentially loans obtained by EDP Renováveis from EDP Branch in the amounts of 862,817 thousands of Euros.
As at 31 December 2007, assets and liabilities with related parties, are analysed as follows:
| Assets Assets Euro'000 Euro'000 |
Liabilities Liabilities Euro'000Euro'000 Euro'000 |
Net Euro'000 Euro'000 |
|
|---|---|---|---|
| EDP Energias de Portugal, S.A. | 60,732 | 2,312,098 | (2,251,366) |
| Group EDP companies | 6 | 1,187 | (1,181) |
| Hidrocantábrico Group companies | 8,347 | 2,646 | 5,701 |
| Associates | 7,751 | 2,228 | 5,523 |
| Jointly controlled entities | 12,441 | 2,740 | 9,701 |
| Other | - | 10,691 | (10,691) |
| 89,277 | 2,331,590 | (2,242,313) |
Transactions with related parties for the year ended 31 December 2008, are analysed as follows:
| Operating Operating income income Euro'000 Euro'000 |
FinancialFinancial Financial income income Euro'000Euro'000 Euro'000 |
Operating OperatingOperating expenses expensesexpenses Euro'000 Euro'000Euro'000 |
Financial Financial expenses expenses Euro'000 Euro'000 |
|
|---|---|---|---|---|
| EDP Energias de Portugal, S.A. | 3,905 | 340 | (3,327) | (1,257) |
| EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) | - | 26,791 | (2,880) | (55,309) |
| Hidrocantábrico Group companies | 93,118 | - | (4,290) | (525) |
| Group EDP companies | 96,968 | 8,755 | (3,973) | - |
| Associated companies | 1,239 | 198 | (24) | - |
| Jointly controlled entities | 707 | 471 | - | - |
| Other | - | - | - | - |
| 195,937 | 36,555 | (14,494) | (57,091) |
Transactions with related parties for the period ended 31 December 2007, are analysed as follows:
| Operating Operating income income Euro'000 Euro'000 |
Financial Financial income income Euro'000 Euro'000 |
Operating Operating expenses expenses Euro'000 Euro'000 |
Financial expenses expenses Euro'000 |
|
|---|---|---|---|---|
| EDP Energias de Portugal, S.A. | - | 548 | (3,288) | (6,787) |
| EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) | - | - | (53) | (6,180) |
| Group EDP companies | 69,872 | - | (3,774) | (69,539) |
| Hidrocantábrico Group companies | 8,036 | 541 | (3,723) | (145) |
| Associates | 2,731 | 90 | (28) | - |
| Jointly controlled entities | 24,066 | (305) | - | 1,244 |
| Other | - | - | - | - |
| 104,705 | 874 | (10,866) | (81,407) |
Additionally to the liabilities related to existing put options between NEO and Caja Madrid, of 270,964 thousand of Euros, which are stated in the caption Trade and other payables (see Note 33), NEO holds loans with Caja Madrid of approximately 104,667 thousand of Euros. These loans bear interest at market rates.
With the purpose of hedging the foreign exchange risk existing in the company and Group accounts of EDP Renováveis and in the company accounts of EDP Branch, the EDP Group settled a CIRS in USD and Euros between EDP Branch and EDP Renováveis. At each reporting date, this CIRS is revalued to its market value, which corresponds to a spot foreign exchange revaluation, resulting in a perfect hedge (revaluation of the investment in Horizon and of the USD external financing). As at 31 December 2008, the amount payable by EDP Renováveis to EDP Branch related to this CIRS amounts to 65,478 thousands of Euros (see note 33).
As part of its operational activities, the EDP Renováveis Group must present guarantees in favour of certain suppliers. Usually, these guarantees are granted by EDP, S.A., through EDP Branch. As at 31 December 2008, EDP, S.A. and Hidrocantábrico granted financial (61,654 thousands of Euros) and operational (765,510 thousands of Euros) guarantees to suppliers in favour of NEO and Horizon. The operational guarantees are issued following the commitments assumed by NEO and Horizon in relation to the acquisition of property, plant and equipment, namely turbines (see note 36).
Fair value of financial instruments is based, whenever available, on quoted market prices. Otherwise, fair value is determined through internal models, which are based on generally accepted cash flow discounting techniques and option valuation models or through quotations supplied by third parties.
Non-standard instruments may require alternative techniques, which consider their characteristics and the generally accepted market practices applicable to such instruments. These models are developed considering the market variables that affect the underlying instrument, namely yield curves, exchange rates and volatility factors.
Market data is obtained from generally accepted suppliers of financial data (Bloomberg and Reuters).
As at 31 December 2008 and 31 December 2007, the following table presents the interest rate curves of the major currencies to which the Group is exposed. These interest rates were used as the base for the fair value calculations made through internal models referred above:
| 31 Dec 2008 Currencies |
2008 | 31 Dec 2007 Currencies |
2007 | |
|---|---|---|---|---|
| EUR EUR |
USD USD |
EUR | USD | |
| 7 days | 2.39% | 0.40% | 4.14% | 4.49% |
| 1 month | 2.60% | 0.45% | 4.29% | 4.60% |
| 2 months | 2.79% | 1.12% | 4.49% | 4.65% |
| 3 months | 2.89% | 1.44% | 4.68% | 4.70% |
| 6 months | 2.97% | 1.78% | 4.71% | 4.60% |
| 9 months | 3.02% | 1.92% | 4.73% | 4.38% |
| 1 year | 3.05% | 2.03% | 4.75% | 4.22% |
| 2 years | 2.76% | 1.48% | 4.56% | 3.81% |
| 3 years | 2.91% | 1.82% | 4.53% | 3.91% |
| 5 years | 3.71% | 2.11% | 4.56% | 4.18% |
| 7 years | 3.93% | 2.36% | 4.61% | 4.42% |
| 10 years | 3.74% | 2.57% | 4.72% | 4.67% |
| 15 years | 3.92% | 2.84% | 4.86% | 4.89% |
| 20 years | 3.88% | 2.82% | 4.91% | 4.98% |
| 30 years | 3.57% | 4.26% | 4.89% | 5.03% |
| 30 years | 3.57% | 4.26% | 4.89% | 5.03% |
Non-listed equity instruments, for which a reliable and consistent fair value estimate is not available either by internal models or external providers, are recognized at their historical cost.
Listed financial instruments are recognized at fair value based on market prices. The financial instruments for which reliable fair value estimates are not available, are recorded in the balance sheet at their historical costs (note 19).
These financial instruments include mainly short term financial assets and liabilities. Given their short term nature at the reporting date, their book values are not significantly different from their fair values.
The fair value of the financial debt is estimated through internal models, which are based on generally accepted cash flow discounting techniques. At the reporting date, the carrying amount of floating rate loans is approximately their fair value. In case of fixed rate loans, mainly the intercompany loans granted by EDP Group, their fair value is obtained through internal models based on generally accepted discounting techniques. The discount rates and forward interest rates were based on the market interest rate curves and on the exchange rates disclosed on note 28.
All derivatives are accounted at their fair value. For those which are quoted in organized markets, the respective market price is used. For over-the-counter derivatives, fair value is estimated through the use of internal models based on cash flow discounting techniques and option valuation models generally accepted by the market, or by dealer price quotations.
With the purpose of hedging the foreign exchange risk resulting from the net investment in Horizon, the Group entered into a CIRS in USD and EUR with EDP Branch. This financial derivative is presented on the balance sheet at its fair value, which is estimated by discounting the projected USD and EUR cash flows. The discount rates and forward interest rates were based on the interest rate curves referred to above and the USD/EUR exchange rate is disclosed on note 28. See also notes 12, 23 and 27.
The fair values of assets and liabilities as at 31 December 2008 is analysed as follows:
| 31 Dec 2008 Group | ||||
|---|---|---|---|---|
| Carrying amount |
Fair value value |
Difference | ||
| Euro'000 Euro'000 |
Euro'000Euro'000 Euro'000 |
Euro'000 | ||
| Financial assets | ||||
| Available for sale investments | 12,501 | 12,501 | - | |
| Trade receivables | 82,598 | 82,598 | - | |
| Derivative financial instruments | 3,355 | 3,355 | - | |
| Financial assets at fair value through profit or loss | 35,774 | 35,774 | - | |
| Cash and cash equivalents (assets) | 229,680 | 229,680 | - | |
| 363,908 | 363,908 | - | ||
| Financial liabilities | ||||
| Financial debt | 1,462,273 | 1,500,989 | 38,716 | |
| Suppliers | 503,192 | 503,192 | - | |
| Derivative financial instruments | - | - | - | |
| 1,965,465 | 2,004,181 | 38,716 |
The fair values of assets and liabilities as at 31 December 2007 is analysed as follows:
| 31 Dec 2007 Group | ||||
|---|---|---|---|---|
| Carrying amount |
Fair value value |
Difference Difference |
||
| Euro'000 Euro'000 |
Euro'000Euro'000 Euro'000 |
Euro'000 Euro'000 | ||
| Financial assets | ||||
| Available for sale investments | 7,951 | 7,951 | - | |
| Trade receivables | 60,885 | 60,885 | - | |
| Derivative financial instruments | 51,061 | 51,061 | - | |
| Financial assets at fair value through profit or loss | 44,839 | 44,839 | - | |
| Cash and cash equivalents (assets) | 388,492 | 388,492 | - | |
| 553,228 | 553,228 | - | ||
| Financial liabilities | ||||
| Financial debt | 2,882,073 | 2,941,597 | 59,524 | |
| Suppliers | 307,234 | 307,234 | - | |
| Derivative financial instruments | 1,400 | 1,400 | - | |
| 3,190,707 | 3,250,231 | 59,524 |
On 17 February 2009, EDP Renováveis has announced the signature of the American Recovery and Reinvestment Act of 2009, which includes a number of energy related tax and policy provisions to benefit the development of wind energy generation, namely (i) a three year extension of the PTC until 2012 and (ii) an option to elect a 30% Investment Tax Credit ("ITC") that could replace the PTC through the duration of the extension, this ITC allows the companies to receive 30% of the cash invested in projects placed in service or with begin of construction during 2009 and 2010.
On February 2009, EDP Renováveis through its subsidiary EDP Renováveis Brasil has obtained the approval to close the acquisition of 100% of CENAEEL – Central Nacional da Energia Eólica S.A. share capital for approximately 15,000 thousands of Euros (enterprise value) made on 11 June 2008. This company has 14 MW already in operation and 70 MW categorized as "Prospects".
The new standards and interpretations that have been issued, but that are not yet effective and that the Group has not yet applied, are analysed below:
The International Accounting Standards Board (IASB) issued in September 2007, the Amended IAS 1 - Presentation of Financial Statements with effective date of mandatory application in 1 January 2009, being allowed its anticipated adoption. The approval by European Commission is being analysed by European Financial Reporting Advisory Group - EFRAG.
The Amended IAS 1 establishes the following changes:
Balance sheet presentation its required for the current and comparative period. According to Amended IAS1, a balance sheet should also be presented for the beginning of the comparative period, when an entity re-expresses the comparatives as a consequence of an accounting policy change, an error adjustment or a reclassification of an item in the financial statements. In these cases, three balance sheets would be presented, compared to the two already required.
With the changes required by this standard financial statements users can easily distinguish changes in Group equity related to transactions with shareholders (ex. dividends, own shares) and transactions with third parties, these being summarized in the comprehensive income statement.
The Group is evaluating the impact of adopting these changes.
The International Accounting Board (IASB) issued in March 2007, the Amended IAS 23 - Borrowing Costs, with effective date of mandatory application of 1 January 2009, being allowed its anticipated adoption.
This standard defines that borrowing costs obtained, directly attributable to acquisition cost, construction or production of an asset (elegible asset) are included in its cost. Therefore, the option to recognise these costs directly in the profit or loss its eliminated.
The Group presently states borrowing costs in the accounts according to alternative criteria allowed by the present version of IAS 23, therefere no significant impact is expected.
The International Accounting Board (IASB) issued in February 2008, the reviewed IAS 32 - Financial Instruments: Presentation - Puttable financial instruments and obligations arising from liquidation, with effective date of mandatory application on 1 January 2009.
Under the current requirements of IAS 32, if an issuer can be required to pay cash or another financial asset in return for redeeming or repurchasing a financial instrument, the instrument is classified as a financial liability. As a result of the amendments, some financial instruments that currently meet the definition of a financial liability will be classified as equity because they represent the last residual interest in the net assets of the entity.
IAS 1 has been also Amended to add a new deemed financial instrument presentation requirement and obligations resulting from the liquidation.
The Group is evaluating the impact of adopting these changes. Therefore, at this date, it is not possible to determine the impact of the adoption in the financial statements.
The International Accounting Standards Board (IASB) has issued an amendment to IAS 39 Financial Instruments: Recognition and measurement – Eligible hedged items, which is applicable from 1 July, 2009.
This change clarifies the application of the existing principles that determine what risks or which cash-flows can be designated as a hedged item.
The Group is evaluating the impact of adopting this amendment.
The changes to the IFRS 1 - First time adoption of the International Financial Reporting Standards and IAS 27 - Consolidated and Separated Financial Statements are effective from 1 January 2009.
These changes allow entities adopting IFRS for the first time in the preparation of the individual accounts, to use as deemed cost of the investments in subsidiaries, jointventures and associated companies, the respective fair value at the transition date to the IFRS or the carrying amount determined based on the previous accounting framework.
The Group does not expect any material impact from the adoption of this amendment.
The International Accounting Standards Board (IASB) issued on January 2008, the Amended IFRS 2 - Share-based payment - Acquisition conditions, with effective date of mandatory application on 1 January 2009, being allowed its anticipated adoption.
This change to IFRS 2 allows to clarify that (i) the conditions to acquire the inherent rights to a share-based payment are limited to service conditions or performance and that (ii) any cancellation of such programs, by the entity or third parties, has the same accounting treatment.
The Group does not expect any material impact from the adoption of this standard.
The International Accounting Standards Board (IASB) issued in January 2008, the reviewed IFRS 3 - Business Combinations and also the Amended IAS 27 - Consolidate and Separate Financial Statements, with effective date of mandatory application of 1 July 2009, being allowed the anticipated adoption. The endorsement by European Commission is expected to occur during the second quarter of 2009. The main impacts of these changes are:
Additionally, IAS 27 was amended to require that an entity attributes a share of the accumulated loss of a subsidiary to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance, and to specify that, upon losing control of a subsidiary, an entity measures any non-controlling interest retained in the former subsidiary at its fair value, determined at the date the control is lost.
The Group is evaluating the impact of adopting these changes. Therefore, at this date, it is not possible to determine the impact of the adoption in the financial statements.
The International Accounting Standards Board (IASB) issued on 30 November 2008, the IFRS 8 - Operating Segments, approved by European Commission on 21 November 2007. This standard is mandatory and applicable for periods beginning on or after 1 January 2009.
IFRS 8 - Operating Segments defines the presentation of information about an entity's operating segments and also about services and products, geographical areas where the entity operates and the most significant customers. This standard specifies how an entity should disclose its information in the annual financial statements and, as a consequential amendment to IAS 34 Interim Financial Reporting, regarding the information to be disclosed in the interim financial reporting. Each entity should also provide a description of the segmental information disclosed namely profit or loss and of segment assets, as well as a brief description of how the segmental information is produced.
The Group is evaluating the impact of adopting this standard. Therefore, at this date, it is not possible to determine the impact of the adoption in the financial statements.
The International Financial Reporting Interpretations Committee (IFRIC) issued in July 2007, the IFRIC 12 - Service Concession Arrangements, with effective date of mandatory application on 1 January 2008, being allowed its anticipated adoption. The endorsement by European Commission is expected to occur during the first quarter of 2009.
IFRIC 12 applies to public-to-private service concession arrangementss. This interpretation will be applicable only when a) the grantor controls or regulates what services the operator must provide and b) the grantor controls any significant residual interest in the infrastructure at the end of the term of the arrangement.
The impact from the adoption of this interpretation is not material.
The International Financial Reporting Interpretations Committee (IFRIC) issued in July 2007, the IFRIC 13 - Customer Loyalty Programmes, with effective date of mandatory application on 1 July 2008, being allowed its anticipated adoption.
This interpretation addresses how companies, that grant their customers loyalty award credits (often called 'points') when buying goods or services, should account for their obligation to provide free or discounted goods or services if and when the customers redeem the points.
The Group does not expect any material impact from the adoption of this interpretation.
The International Accounting Board (IASB) issued in July 2008, the IFRIC 15 - Agreements for the construction of Real Estate, with effective date of mandatory application on 1 January 2009 and is to be applied retrospectively.
This interpretation defines the accounting practice across jurisdictions for the recognition of revenue among real estate developers for sales of units, such as apartments or houses, before construction is complete.
The Group does not expect any material impact from the adoption of this interpretation.
The International Accounting Board (IASB) issued in July 2008, the IFRIC 16 - Hedges of a Net Investment in a Foreign Operation, with effective date of mandatory application for annual periods commencing on or after 1 October 2008.
This interpretation applies to na entity that hedges the foreign currency risk arising from its net investments in foreign operations and wishes to qualify for hedge accounting in accordande with IAS 39 - Financial Instruments - Recognition and Measurement.
IFRIC 16 provides guidance to (i) identifying the foreign currency risks that qualify as a hedged risk in the hedge of a net investment in a foreign operation, (ii) where, within a group, hedging instruments that are hedges of a net investment in a foreign operation can be held to qualify for hedge accounting and (iii) how an entity should determine the amounts to be reclassified from equity to profit or loss for both the hedging instrument and the hedged item.
The Group is evaluating the impact of adopting this interpretation. Therefore, at this date, it is not possible to determine the impact of the adoption in the financial statements.
The International Accounting Board (IASB) issued in November 2008, the IFRIC 17 - Distributions of Non-cash Assets to Owners, with effective date of mandatory application for annual periods commencing on or after 1 July 2009, and earlier application is permitted.
This interpretation clarifies that (i) a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity, (ii) na entity should measure the dividend payable at the fair value of the net assets to be distributed and (iii) an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss.
The Group does not expect any material impact from the adoption of this interpretation.
The International Accounting Board (IASB) issued in January 2009, the IFRIC 18 - Transfers of Assets from Customers, with effective date of prospectively mandatory application to transfers of assets from customers received on or after 1 July 2009, with earlier application permitted, when valuations and other information needed to apply the interpretation is provided for past transfers.
This interpretation clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing acces to supply of goods or services.
The Group does not expect any material impact from the adoption of this interpretation.
In May, 2008, the IASB published the Annual Improvement Project that implied changes to the standards in force. The effective date of the referred changes depends on the specific standard, although the majority will be mandatory for the Group in 2009. The Group is evaluating the impact of these changes.
Expenses of environmental nature are the expenses that were identified and incurred to avoid, reduce or repair damages of an environmental nature that result from the Group's normal activity.
These expenses are booked in the income statement of the year, except if they qualify to be recognised as an asset, as according to IAS 16.
During the period, the environmental expenses recognised in the income statement refer to costs with the environmental management plan are analysed as follows:
| Group 31 Dec 2008 Euro'000 |
Group 31 Dec 2007 Euro'000 |
|
|---|---|---|
| Environmental monitoring plan | 783 | 431 |
| 783 | 431 |
As referred in accounting policy 2n, the Group has established provisions for dismantling and decommissioning of property, plant and equipment when a legal or contractual obligation exists to dismantle and decommission those assets at the end of their useful lifes. Consequently, the Group has booked provisions for property, plant and equipment related to electricity wind generation for the responsibilities of restoring sites and land to its original condition, in the amount of 47,311 thousands of Euros as at 31 December 2008 (20,280 thousands of Euros on 31 December 2007) (see note 32).
Assets held for sale, in the amount of 985 thousands of Euros, relates to land, acquired with the express purpose of a future sale. This land belongs to the subsidiary Horizon and is integrated in the United States geographical segment.
A business segment is an identifiable component of the Group, aimed at providing a single product or service, or a group of related products or services, and it is subject to risks and returns that can be distinguished from those of other business segments.
A geographical segment is an identifiable component of the Group, aimed at providing a single product or service, or a group of related products or services, within a specific economic environment, and it is subject to risks and returns that can be differentiated from those that operate in other economic environments.
KPMG has audited the consolidated annual accounts of EDP Renováveis Group for 2008. This company and the other related entities and persons in accordance with Law 19/188 of 12 July, have invoiced for the year ended in 31 December 2008, fees and expenses for professional services, acording to the following detail:
| Spain Spain |
Other Other |
|
|---|---|---|
| 31 Dec 2008 2008 Euro'000 Euro'000 |
31 Dec 2008 31 Dec 2008 Euro'000 Euro'000 |
|
| Audit services | 636 | 771 |
| Audit related services | 449 | 1,502 |
| Other services | 46 | - |
| 1,131 | 2,273 |
(Thousands of Euros)
| WIND ENERGY OPERATIONS | |||||||
|---|---|---|---|---|---|---|---|
| Portugal Portugal |
Spain Spain |
France | Rest of Europe |
U.S.A. | Other and adjustments |
EDP Renováveis Group |
|
| Revenue Cost of consumed electricity |
98,102 -222 |
265,302 -265 |
16,832 - |
29 - |
131,813 -506 |
20,351 - |
532,429 -993 |
| Cost of consumed gas | - | - | - | - | - | - | - |
| Changes in inventories and cost of raw materials and consumables used |
43 | -178 | 225 | -57 | - | -11,284 | -11,251 |
| 97,923 | 264,859 | 17,057 | -28 | 131,307 | 9,067 | 520,185 | |
| - | |||||||
| Other operation income / (expenses): | - | ||||||
| Other operating income | 734 | 1,935 | 1,751 | 28 | 84,601 | 475 | 89,524 |
| Supplies and services | -12,430 | -31,671 | -4,257 | -2,554 | -45,381 | -10,654 | -106,947 |
| Personnel costs | -3,796 | -751 | -702 | 2,032 | -17,099 | -16,695 | -37,011 |
| Employee benefits expenses Other operating expenses |
-11 -6,082 |
- -4,554 |
- -1,968 |
- -424 |
-929 -14,033 |
-150 277 |
-1,090 -26,784 |
| -21,585 | -35,041 | -5,176 | -918 | 7,159 | -26,747 | -82,308 | |
| 76,338 | 229,818 | 11,881 | -946 | 138,466 | -17,680 | 437,877 | |
| Provisions Depreciation and amortisation expense |
166 -25,940 |
- -64,296 |
- -6,755 |
- -53 |
- -87,687 |
640 -23,033 |
806 -207,764 |
| Amortisation of deferred income on partially funded properties received under concessions |
540 | 154 | - | - | - | 2 | 696 |
| Gains / (losses) from the sale of financial | 51,104 | 165,676 | 5,126 | -999 | 50,779 | -40,071 | 231,615 |
| assets | - | 549 | - | - | - | 1,814 | 2,363 |
| Other financial income | 9,139 | 34,859 | 310 | 1,087 | 3,190 | 222,316 | 270,901 |
| Other financial expenses | -28,419 | -68,058 | -10,250 | -2,661 | -45,595 | -193,137 | -348,120 |
| Share of profit of associates | - | 610 | - | - | -6 | 3,834 | 4,438 |
| Profit before tax | 31,824 | 133,636 | -4,814 | -2,573 | 8,368 | -5,244 | 161,197 |
| Income tax expense | -8,038 | -36,005 | -617 | - | - | -4,319 | -48,979 |
| Profit after tax but before gains / (losses) | |||||||
| on discontinued operations | 23,786 | 97,631 | -5,430 | -2,573 | 8,368 | -9,564 | 112,218 |
| Profit (loss) for the period | 23,786 23,786 |
97,631 97,631 |
-5,430 | -2,573 - |
8,368 | -9,564 | 112,218 112,218 |
| Attributable to: Equity holders of the parent company |
23,786 | 97,632 | -5,430 | - -2,573 |
8,370 | -17,421 | 104,364 |
| Minority interest | - | - | - | - | - | 7,854 | 7,854 |
| Profit (loss) for the period | 23,786 | 97,632 | -5,430 | -2,573 | 8,370 | -9,567 | 112,218 112,218 |
| Other information: | |||||||
| Property, plant and equipment Intangible assets |
498,264 6,760 |
1,436,448 - |
218,912 - |
59,919 161 |
3,478,077 12,459 |
1,361,163 3,028 |
7,052,783 22,408 |
| Total Current Assets | 67,208 | 358,423 | 36,555 | 17,754 | 126,338 | 126,042 | 732,320 |
| Total Equity | 74,848 | 381,175 | 6,434 | 22,409 | 2,786,532 | 1,918,712 | 5,190,110 |
| Total Current Liabilities | 68,281 | 326,955 | 63,474 | 35,226 | 175,002 | 111,822 | 780,760 |
| Renewable Production | |||||
|---|---|---|---|---|---|
| Europe Europe |
E.U.A. E.U.A. |
Other Other Operations Operations |
EDP Renováveis Group Group |
||
| Turnover Cost of Consumed Electricty |
10,689 -11 |
3,674 -147 |
- - |
14,363 -158 |
|
| Changes in inventories and cost of raw materials and consumables used |
-501 | - | - | -501 | |
| 10,177 | 3,527 | - | 13,704 | ||
| Other operating income / (expenses) | |||||
| Other operating income | 805 | 944 | - | 1,749 | |
| Supplies and services | -2,027 | -833 | -67 | -2,927 | |
| Personnel costs | -372 | -627 | - | -999 | |
| Employee benefits expense | -5 | -18 | - | -23 | |
| Other operating expenses | -635 | -157 | - | -792 | |
| -2,234 | -691 | -67 | -2,992 | ||
| 7,943 | 2,836 | -67 | 10,712 | ||
| Depreciation and amortisation expense | -4,473 | -2,412 | - | -6,885 | |
| Amortisation of deferred income / Government grants | 6 | 462 | - | 468 | |
| 3,476 | 886 | -67 | 4,295 | ||
| Gains / (losses) from the sale of financial assets | 888 | - | - | 888 | |
| Other financial income | 396 | 401 | 158 | 955 | |
| Other financial expenses | -4,265 | -659 | - | -4,924 | |
| Share of profit of associates | 224 | -21 | - | 203 | |
| Profit before tax | 719 | 607 | 91 | 1,417 | |
| Income tax expense | - | - | -47 | -47 | |
| Profits after tax | 719 | 607 | 44 | 1,370 | |
| Profit for the period | 719 719 |
607 607 |
44 | 1,370 | |
| Attributable to: | |||||
| Equity holders of EDP Renováveis | 442 | 607 | 44 | 1,093 | |
| Minority interest | 277 | - | - | 277 | |
| Profit for the period | 719 719 |
607 607 |
44 | 1,370 | |
| Other informations: | |||||
| Property plant and equipment | 2,753,098 | 2,173,202 | - | 4,926,300 | |
| Intangible assets | 12,617 | 10,341 | - | 22,958 | |
| Current assets | 360,311 | 333,636 | 38,020 | 731,967 | |
| Equity + Minority interest | 333,120 | 11,346 | 1,901,255 | 2,245,721 | |
| Current liabilities | 528,842 | 400,363 | 77 | 929,282 |
Full year of 2008 (12 months ending December 31st, 2008)
On June 4th, EDP Renováveis, S.A. ("EDPR") started trading on NYSE Euronext's Lisbon market under the ticker symbol "EDPR" following its successful spin-off from EDP Group (NYSE Euronext: EDP). The EDPR IPO raised a total of €1.566 billion/\$2.42 billion in global proceeds, representing the largest IPO launched in Western Europe during 2008.
Priced at €8.00 (eight Euros) per share – midway between the offering price range of €7.40 to €8.90 per share – the Public Subscription Offer was oversubscribed by 87.9 times the total amount of 45,085,590 shares1 . The institutional offer had a demand of 6.1 times the total amount of 180,342,362 shares. These combined shares make up 22.5% of EDPR, with EDP maintaining majority ownership of the other 77.5% of the company.
The proceeds of the Offering are being used to finance EDPR's growth plans, including the execution of its portfolio of wind projects to meet the target of consistently increasing its portfolio of installed wind capacity to more than 10.5 GW by 2012.
In challenging financial markets, the success of the IPO clearly demonstrates the high regard investors have for EDPR as the fastest growing pure-play among the world's largest global renewables companies, with first class assets and strong track record in execution. EDPR welcomes all new shareholders and looks forward to rewarding their confidence as the organization delivers on the growth strategy and pipeline. EDPR ended up 2008 ranking #4 in the Euronext's Lisbon market with a total capitalization of €4.4 billion.
1 Including greenshoe
On February 14th, EDPR acquired from Hydra Wind, LLC six development projects in the USA totalling 1,050MW. The six projects are located in Illinois, Indiana, and Ohio, within the regional transmission systems of PJM and MISO. This acquisition supports consolidation of EDPR's leadership in Illinois, where EDPR owns and operates the 396MW Twin Groves wind farm - the largest wind farm east of the Mississippi River. The acquisition also strengthens the EDPR pipeline in Indiana and Ohio, where EDPR is the developer with the largest pipeline. All projects will be regionally managed by the Great Lakes Regional Development office, located in Bloomington, Illinois.
Noteworthy, although unrelated with the transaction, is the favourable advance on the regulatory front, since last May Ohio enacted its first Alternative Energy Resource Standard, mandating Ohio utilities to have at least 12.5% of their generation coming from renewable energy by 2025.
On April 7th, EDPR acquired French wind assets from EOLE 76 complementing the French wind assets with, at the time of the transaction, 35MW in operation, 8MW under construction, 258MW in pipeline and 595MW in prospective stage. Of the pipeline projects, 13MW have all the necessary authorizations to start construction and are expected to enter operation between 2009 and 2010. Construction licenses have been submitted for additional 43MW. The total amount of the transaction summed up to €54.9 million.
The 35MWs in operation - the "Pays de Bray" complex in Normandy - came online in the second quarter of 2008 and provides electricity for the annual consumption of approximately 90,000 people. The original EOLE 76 development team will stay responsible for the projects, and will be working jointly with the rest of the EDPR development team in France.
On June 11th, EDPR made a move towards the Brazilian market, establishing a subsidiary "EDP Renováveis Brasil", owned 55% by EDPR and 45% by Energias do Brasil (EDP Group company). At the same time, EDP Renováveis Brasil agreed to acquire 100% of the share capital of CENAEEL
– Central Nacional da Energia Eólica S.A. for R\$51 million (enterprise value). This transaction was closed in February 2009 and includes a total portfolio of 84 MW in various stages of maturity.
On October 17th, EDPR enters the Romanian market by acquiring 85% of Renovatio Power SRL and Cernadova Power SRL, which owned several wind projects in prime locations, totalling 736MW in different stages of maturity: i) 225 MW classified as Tier 1 (ready to build on the short term); ii) 60 MW of projects rated as Tier 2; iii) 462 MW of Tier 3 and Prospects. The total acquisition price amount to €64.4 million, including success fees to be paid as wind projects reach certain predefined milestones.
On January 2nd, EDPR closed a \$600 million transaction Institutional Investors Partnership in the USA. The agreement with the institutional equity investors GE Energy Financial Services and Wachovia Investment Holdings relates with 2007 and 2008 wind farm projects.
On December 29th, EDPR establishes a new Investors Partnership for the investment in 2008 wind projects in the USA. The agreement is closed with JP Morgan Capital Co and New York Life Insurance Group for a portfolio of \$265 million worth.
On January 20th, 2009 EDPR announced to reach a total portfolio of gross MW in operation in excess of 5.0GW. This corresponds to an additional gross installed capacity of 1,413MW during 2008, fully accomplishing its yearly defined target upon the IPO of cc 1.4GW. Total generated output reached 7.8GW, which corresponds to a 78% increase vs. 2007.
During the year of 2008, EDPR added 1,413MW of gross installed capacity, fully achieving its yearly target of 1.4GW defined upon the IPO and leading to a total portfolio of assets in operation in excess of 5.0GW. In terms of total output, EDPR recorded a significant growth in electricity generation ending 2008 with 7.8TWh (78% or 1.8 times increase vs. 2007), mainly a result of increased installed capacity.
On top of the 1,413MW of new installed capacity, EDPR ended the year with 769MW under construction (of which 569MW in Europe and 199MW in North America) which represents a significant carry forward of capacity into 2009 (standing for more than 50% of the previously mentioned yearly target) and, most notably, provides clear of the organization's ability to manage more than 2.2GW of construction throughout the year3 .
Total revenues reached €532 million driven by higher installed capacity as well as attractive selling prices in Europe and stable PPA conditions in the North American portfolio.
Focus on operational efficiency, with Other Operating Income / (Expenses) amounting to (€82) million, lead to an EBITDA of €437.8 million.
Net Financial Results in 2008 were (€77.2) million (benefiting from cash proceeds from IPO and capitalization of EDP Group debt) and Net Income totalled €112.2 million, of which €104.4 million is attributable to EDPR equity holders and €7.9 million belong to minority interest.
Excellence in operational performance is best reflected in the sustainable high availability levels in Europe (97%, in line 2007) and a significant improvement in availability in North America operations (from 90% in 2007 to a full year average of 94%, with 96% performance level during 4th quarter of 2008).
2 Prepared according to IFRS accounting standard. Comparison with prior year not presented since 2007 audited accounts reflect only the period of December 4th to December 31st, 2007 3
Totalling 2008 additions plus capacity under construction by year-end 5
Currently only Spanish market data is available comparison using official sources (REE)
Volatile quarterly wind conditions, with a particularly low 3rd quarter, lead to a load factor in Europe of 26% in line with mark of 2007 and consistent with the historical premium towards the market5 (e.g., EDPR's assets in Spain recorded a load factor of 25,7%, cc. 200 bps premium compared to market), underlining the quality of EDPR' assets. In North America, load factor reached a significant 34%, considerably higher than prior year mark of 30% mainly resulting from new additions to US portfolio and particularly strong 4th quarter winds.
Throughout the year of 2008, EDPR invested about €2.2 billion as capital expenditures (including M&A transactions) and used the €1.6 billion cash proceeds from the IPO and the €1.3 billion from the capitalization of EDP shareholder loans to reach a year-end Net Debt of approx. €1.1 billion6 . This resulted in a solid Net Debt / EBITDA ratio of 2.44x. Future growth is anticipated to be financed mainly through shareholder loans with EDP parent company.
EDPR continues to look to the renewable energy sector with a long-term outlook, believing that the environmental, economic and technological trends that have underpinned the current favourable renewable energy market conditions will continue to drive further support for and growth in the markets we are active in.
EDPR is a leading 'pure-play' renewable energy company, having derived the revenue stream from renewable energy activity. EDPR has leading position and "early mover" advantages in attractive high-growth markets, and continues to analyze new markets and new opportunities within the markets we currently operate within.
EDPR has a solid history of executing projects and delivering targets. We consistently increased gross installed capacity by surpassing the 2006-2008 targets. The combination of diversified operations with a stable revenue base spread across countries with favourable regulatory regimes limits the exposure to market prices of electricity and provides a significant visibility and stability. EDPR's asset portfolio is well-balanced, in terms of geography and stages of development. In addition, EDPR is selectively engaged in expanding our activities into other geographies.
EDPR is positioned to deliver on significant and superior growth targets and achieve over 10.5GW in operating assets by 2012. For that, by year-end 2008, EDPR has crafted a robust, visible and
6 Excluding Institutional Investors Partnership. Including I.I.P., Net Debt / EBITDA would be of 3.9x.
geographically diverse pipeline in excess of 28.2GW worldwide (varying from projects in nineteen US states to regions of Brazil and different European countries).
This aggressive medium term targets will reinforce EDPR's position as a leading player in the renewable industry and underlines management's commitment to create shareholder value. On the core of EDPR's confidence on achieving these targets, is a dynamic, highly qualified and experienced team of world-wide employees with the track record and ambition to deliver upon the superior growth targets.
In recent years, global attention has been increasingly focused on climate change and its effect on world populations, economies and, consequently, strategies for generating energy from renewable sources. At a global level, an important milestone was reached on May 9, 1992, when 154 countries signed the United Nations' Framework Convention on Climate Change (the "UNFCCC"), which came into effect on March 21, 1994. The objective of the UNFCCC is to "achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system".
As a result, on December 11, 1997, a majority of the countries that are party to the UNFCCC also signed the Kyoto Protocol, which came into effect on February 16, 2005 for those signatories that subsequently ratified it. The Kyoto Protocol sets mandatory limits on emissions of carbon dioxide and five other greenhouse gasses for individual nations in an effort to reduce emissions by a collective average of at least 5% against 1990 levels in the period between 2008 and 2012. The Kyoto Protocol establishes enforcement provisions and penalties for nations that exceed their designated emissions limits.
At the European level, The European Commission published a white paper on renewable energy in 1997, setting forth the renewable energy strategy of the Member States of the European Union (the "EU") and reaffirmed its commitment to the promotion of energy from renewable sources on January 10, 2007 with the European Commission's presentation of a long-term "Renewable Energy Roadmap" which proposes a mandatory target of generating 20% of energy from renewable sources by 2020. Furthermore, in January 2008, the EU proposed specific binding targets for each country.
The European Commission further developed the "Emissions Trading Scheme" ("ETS") allowances (which allows for companies to trade "permits" to pollution at the lowest cost) and rising prices for oil
and gas, and reinforced the strong renewable energy allocation and flexibility methodology adopted by the European Council.
As far as North America is related, in September 2008, the U.S. House of Representatives passed the Comprehensive American Energy Security and Consumer Protection Act containing provisions for a Federal RPS to require 15% of power demand to be supplied through renewables by 2020. The wide ranging bill was defeated in the Senate, but its progress indicates the growing expectation for federal action on RPS legislation.
On climate change legislation, the states continued to lead the way in the US. The Regional Greenhouse Gas Initiative (RGGI) held its first CO2 allowance auction in September 2008. The RGGI provides the mechanism to manage the CO2 Budget Trading Programs for 10 participating states in the north-eastern U.S. representing 12% of total US CO2 emissions. At the federal level, members of the 110th Congress (2007-2008) introduced legislation related to global climate change at a faster pace than any previous Congress.
In fact, lawmakers introduced more than three times as many bills, resolutions, and amendments specifically addressing global climate change and greenhouse gas emissions than the 109th Congress (2005-2006). While climate change legislation has not succeeded to date, expectations are building that the new administration and the Democratic controlled Congress will make progress.
Following the formal appointment of the New Administration in January 20th of 2009, the "American Recovery and Reinvestment Act of 2009" was signed into law on February 17th. This plan includes several provisions to stimulate investment in renewable energy and specifically the wind business.
Overall, in essence, the renewable energy industry benefits from government subsidies or incentives in the markets in which EDP Renováveis operates (Spain, Portugal, France, Belgium, Poland, Romania, the United States, and Brazil). These incentives and subsidies benefit the producers of electricity from renewable energy sources and can broadly be classified into three groups:
In line with the objectives and the strategy of EDP Group reinforced during the IPO of EDP Renováveis, EDPR decided to implement a Internal Control System of Finance Report (SCIRF) with volunteer character that follows the international standards and aims to promote a set of activities to strengthen controls to ensure confidence and integrity of financial information.
In the European platform activities began at the end of 2007 and continued throughout 2008 with implementation of SCIRF following the following action lines:
Additionally in 2008, the first phase of deployment for the North America platform was initiated. This phase consisted in the reinforcement of the controls associated with the three major components that are covered in the model that follow the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework of reference the first two and Control Objectives for Information and related Technologies (COBIT) the last
The body responsible for SCIRF in EDPR is the Internal Audit Department whose functions include the implementation, follow up and system improvement designed for assuring confidence and integrity of the financial information.
Apart from the SCIRF, during 2nd half of 2008, EDPR created a Risk Management Department and started creating the basis for an integrated Risk Management Internal System with the purpose of pro-actively identify and manage the key risks arising from its business.
EDPR's business is focused on the production of electricity from renewable energy sources. The amount of energy generated by, and the profitability of, wind farms is dependent on climatic conditions, which vary across the locations of the wind farms, the seasons and years.
Remuneration for electricity sold by a number of the wind farms depends, at least in part, on market prices for electricity. Market prices may be volatile and are affected by various factors, including the cost of the raw materials used as sources of energy, average rainfall levels, the cost of power plant construction, the technological mix of installed generation capacity and user demand.
At the same time, all new investments are subject to construction risk (in a diversity of forms) and once brought to operations are exposed to market, operational, credit and business risks which may penalize project's initial profitability.
The businesses of the EDPR are exposed to a variety of financial risks, including the effects of changes in market prices, foreign exchange and interest rates. The unpredictability of the financial markets is analyzed on an on-going basis in accordance with the EDP Group's risk management policy. Financial instruments are used to minimize potential adverse effects resulting from the interest rates and foreign exchange rates risks on its financial performance.
The management of financial risks of EDPR is undertaken by the Financial Department of EDP (under the terms of the outsourcing of management services agreement "Contrato de Prestaçao Serviços Consultoria" between EDPR and EDP), in accordance with the policies approved by the Board of Directors. The Financial Department identifies, evaluates and submits to the Board for approval, hedging mechanisms appropriate to each exposure.
The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits.
d) Capital investments
The capital investment required to develop and construct a wind farm is very high and generally varies based on the cost of the necessary fixed assets, such as turbines. The price of such equipments and/or civil construction works may increase, or continue to increase as in the case of
turbines, if the market demand for such equipment or works is greater than the available supply, or if the prices of key component commodities and raw materials used to build such equipments increases.
The Group operates internationally and is exposed to the exchange-rate risk resulting from investments in subsidiaries whose functional currency is the U.S. dollar. Currently, the exposure to the U.S. dollar/euro currency fluctuation risk results principally from the shareholding in EDPR NA. EDP Group's Financial Department is responsible for monitoring the evolution of the U.S. dollar, seeking to mitigate the impact of currency fluctuations on the financial results of the Group companies and consequently, on consolidated net profit, using exchange-rate derivatives and/or other hedging structures. The policy implemented by the Group consists of undertaking derivative financial instruments for the purpose of hedging foreign exchange risks with characteristics similar to those of the hedged item. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that gave rise to them is evaluated.
The Group's operating and financial cash flows are substantially independent from the fluctuation in interest-rate markets.
The purpose of the interest-rate risk management policies is to reduce the financial charges and the exposure of debt cash flows from market fluctuations through the settlement of derivative financial instruments to fix the debt interest rates. In the floating-rate financing context, the Group contracts interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating interest rate loans into fixed interest rate loans. All these operations are undertaken on liabilities in the Group's debt portfolio and are mainly perfect hedges through a high correlation between changes in fair value of the hedging instrument and changes in fair value of the interest-rate risk or upcoming cash flows.
EDPR has a portfolio of interest-rate derivatives with maturities between approximately 1 and 10 years. The EDP Group's Financial Department undertakes sensitivity analyses of the fair value of financial instruments to interest-rate fluctuations.
As of December 31, 2008, EDPR faced limited market price risk. In the case of EDPR NA, most prices are fixed and principally determined by long-term power purchase agreements. In the case of Spain, electricity is sold directly on the daily market at spot prices plus a pre-defined regulated premium. EDPR also has an option of selling this electricity through regulated tariffs, guaranteeing
minimum prices. In 2008 the company closed a hedge in order to mitigate pool price fluctuations in Q4 in Spain, which mitigates the risk related to fluctuations in pool prices. In the remaining countries, prices are mainly determined through regulated tariffs (France and Portugal) or managed through long-term power purchase agreement (Brazil, Poland, Romania and Belgium).
The development and profitability of renewable energy projects is dependent on policies and regulatory frameworks that support such development. The jurisdictions in which we operate provide various types of incentives that support the sale of energy generated from renewable sources.
Support for renewable energy sources has been strong during the last years, and both the European Union and the various U.S. federal and state bodies have regularly reaffirmed their desire to continue and strengthen such support (as legislative advances in early 2009 are adequate evidence). However, we can neither guarantee that support will be maintained nor guarantee that the electricity produced by future renewable energy projects will benefit from statutory purchase obligations, tax incentives, or other support measures for the generation of electricity from renewable energy sources.
With operating projects and ongoing development pipeline across multiple countries, EDPR faces the risks inherent in the individual countries, including:
Wind energy development requires multiple permits and studies about environmental impact of the proposed or existing projects. As with other risks, these permits do not have guaranteed approval from the relevant authorities.
Other operational, financial, political, reputation or others risks may arise from running the business while prospecting opportunities, developing projects or operating existing assets.
Topic 4.2 provides a description of the key financial risks faced by EDPR. According to EDPR risk policy, and in order to manage, control or minimize impact of some of those risks, EDPR may, occasionally, use financial derivatives and enter hedging transactions with the sole intent to protect against risks and as a consequence mitigate fluctuations of earnings. These derivative instruments are explained in detail as part of the notes to the financial statements.
During the 2008 exercise, EDP Holding and EDPR do not hold (or have bought) any treasury stocks (own shares).
EDPR's business model focused on renewable energy springs from its firm pledge to promote environmental protection as a fundamental pillar of its activity, complying with current environmental legislation while fostering sustainable development.
EDPR focuses its daily efforts on mitigating environmental impacts in all of its activities. From project development to construction and operation, EDPR conducts extensive location environmental viability studies, environmental impact studies, bird studies, noise studies, and promotes environmental awareness and alertness.
As a result of EDPR's philosophy to reach a sustainable development and its continuous aim to improve the environmental practices in all its activities, Environmental Management Systems
(EMSs) are currently in the process of being implemented in both the European and North American platforms.
For the European platform, under the international specification UNE-EN ISO 14001, wind farms currently in operation managed to achieve the corresponding certification by the end of 2008. This entails a project efficiency increase, minimizing consumption and enables a more exhaustive control of the compliance of legal requisites, among other aspects.
The North American platform is developing an EMS and has implemented standards for baseline wildlife studies applicable to all projects under development, construction, or operation, with the goals of:
The EMS is a set of processes and practices that enables both EDPR platforms to reduce its environmental impacts during development, construction, and operations. EDPR is committed to exceeding all standards and requirements for environmental impacts and as such is proactively integrating environmental awareness as key part of its growth strategy.
During 2008, the main objective of the Human Resources Department in EDPR was to harmonize, standardize and adjust the Human Resources policies of all the group companies to the comprehensive EDPR Talent Management structure, considering the organization and retribution model, as well as the performance evaluation. A new EDPR remuneration policy was established to link to this Talent Management Structure with the following dimensions:
Additionally, HR analyzed the key executive functions for each EDPR Group company. This analysis solidified the process of redefining the organization structure, as well as promotes the executives' national and international mobility and development.
With the intent to foster and support R&D within the renewables arena, EDP Renováveis signed an agreement with EDP Inovação, S.A. establishing the basis for joint project development in new technologies, technologies currently in pilot mode as well as in the enhancing of existing ones.
The purpose of this R&D agreement is to promote the exchange of knowledge between companies and to establish legal and commercials relations setting the tone for development R&D projects. This agreement is intended to remain in force as long as both companies are detained in more than 50% by EDP Group, reinforcing the long term commitment of EDPR to support of R&D activities in areas that relate with its business.
On February 16th, EDPR closed the transaction (initiated and announced still during 2008) to acquire 100% of the Brazilian wind assets of Central Nacional de Energia Eólica S.A. ("CENAEEL") for R\$51 million (enterprise value). Included in the transaction were 14MW of operating capacity spread across two wind farms in the state of Santa Catarina and a total of 70 MW of pipeline projects in various stages of maturity.
On February 17th, the President of the United States of America signed the American Recovery and Reinvestment Act of 2009, which includes a number of energy-related tax and policy provisions to benefit the development of wind energy generation in the country. The key tax incentives to be introduced as a result of this Act are the following:
The approved provisions will increase the optionalities on the monetization of the federal tax subsidies, providing a greater liquidity vis-à-vis the traditional monetization through Institutional Partnership transactions. The law, besides providing a wider regulatory stability until 2012, constitutes a major positive development in the US wind market in terms of improved project's economics and risks.
In accordance with the regulations, attached is an appendix with the Corporate Governance chapter, being an integral part of the current management report.
| Corporate Governance |
4 |
|---|---|
| 0. Statement of compliance | 4 |
| 1. Corporate governance structure | 12 |
| 2. Shareholder structure | 18 |
| 3. Management and control system | 20 |
| 4. Exercice of shareholders' rights | 34 |
| 5. Remuneration | 38 |
| 6. Shares and dividend policy | 42 |
| 7. Company's market relations | 46 |
| AnNEXEs: | |
| I. Main positions held by members of Board of Directors in last five years |
48 |
| II. Current positions of the members of the Board of Directors in companies not belonging to the same group as EDP Renováveis, S.A. |
52 |
| III.Current positions of the members of the Board of Directors in companies belonging to the same group as EDP Renováveis, S.A. |
54 |
| IV.Board of Directors | 58 |
| V. EDP Renováveis shares owned by members of the Board of Directors as at 31.12.2008 |
62 |
| EXTRACT OF MINUTES OF GENERAL MEETING | 64 |
EDP Renováveis, S.A. (hereinafter referred to as EDP Renováveis or the Company) is a listed company that was admitted to trading on the regulated market of NYSE Euronext Lisboa (Eurolist by Euronext Lisbon) following an initial public offering in May 2008 under Spanish law. In view of its status as a company quoted on a regulated market in Portugal, EDP Renováveis is subject to the corporate governance code called "Código de Governo das Sociedades" approved by the CMVM (Portuguese Securities Market Commission) in September 2007. This governance code is available to the public on the CMVM website, www.cmvm.pt.
EDP Renováveis states that it has adopted in full the CMVM recommendations on the governance of listed companies in the "Código de Governo das Sociedades", with the exception of Recommendations I.4.1. and II.2.2. of the code, which has not been adopted for the reasons indicated below.
The following table shows the CMVM recommendations set forth in the code and indicates whether or not they have been fully adopted by EDP Renováveis and the place in this report in which they are described in more detail.
| RECOMMENDATION | ADOPTION INFORMATION | DESCRIPTION IN REPORT |
|---|---|---|
| I. – General meeting of shareholders | ||
| I.1. – Board of the general meeting | ||
| I.1.1. The chairperson of the general meeting shall have access to human and logistical resources appropriate to his/her needs, taking into account the company's financial position. |
Adopted | 4.6 |
| I.1.2. The remuneration of the chairperson of the Board of the General Meeting shall be disclosed in the annual corporate governance report. |
Adopted | 4.6 |
| I.2. – Participation in the meeting | ||
| I.2.1. The time limit imposed by the Articles of Association for depositing or blocking shares for the purpose of participating in the meeting shall not exceed five working days. |
Adopted | 4.2 |
| I.2.2. Should the general meeting be suspended, the company shall not compel share blocking during that period until the meeting is resumed and shall then apply the same time limit as for the first session. |
Adopted | 4.2 |
| I.3. – Voting and voting rights | ||
| I.3.1. Company's Articles of Association shall not impose any restrictions on votes by mail. |
Adopted | 4.4 |
| I.3.2. The time limit imposed by the Articles of Association on receipt of votes by mail shall not exceed three working days. |
Adopted | 4.4 |
| I.3.3. Company Articles of Association shall provide for one vote per share. | Adopted | 4.3 |
I.4.1. Companies shall not fix a constitutive or deliberative quorum higher than that prescribed by law.
Not adopted ("Under Spanish law, the constitutive quorums on first and second call to order are 25% and 0% for ordinary and extraordinary general meetings and 50% and 25% for ordinary and extraordinary general meetings in which valid decisions may be made on the issue of bonds, increases or reductions in share capital, transformation, mergers or spin off of the company and, in general, any amendments to the Articles of Association. The company's Articles of Association establish a slightly higher constitutive quorum in order to reinforce shareholder support for approval of decisions.")
| I.5.1. The minutes of general meetings shall be made available | Adopted | 4.7 |
|---|---|---|
| to shareholders on the company's website within five days, even if they | ||
| do not constitute privileged information under the law. A collection | ||
| of attendance lists, agendas and decisions passed during meetings shall | ||
| be kept on file on the company's website for at least three years. | ||
| I.6. – Company control measures | ||
| I.6.1. Measures to prevent successful takeover bids shall respect | Adopted | 4.8 |
| the interests of the company and its shareholders. | ||
| I.6.2. Company's Articles of Association that, in compliance with the | Not applicable | |
| previous sub-paragraph, limit the number of votes that may be held or cast | ||
| by a sole shareholder, either individually or jointly with other shareholders, | ||
| shall also provide for the general meeting to decide, at least every five | ||
| years, on whether this provision is to be maintained, without higher | ||
| quorum requirements than those established by law, and for all votes cast | ||
| to be counted in said decision without the limitation being imposed. | ||
| I.6.3. There shall be no defensive measures intended to automatically | Adopted | 4.8 |
| cause a serious depletion of the company's assets in the event of transfer | ||
| of control or a change of membership of the Board of Directors thereby | ||
| affecting the free transferability of shares and free appreciation | ||
| by shareholders of the Board members' performance. | ||
| II – Management and supervisory bodies | ||
| II.1. – General matters |
II.1.1. – Structure and duties
II.1.1.1. The Board of Directors shall, in its governance report, assess the model adopted, identify any constraints on its functioning and recommend appropriate measures to overcome them.
Adopted 1.1
| I.1.1.2. Companies shall set up in-house control systems for the effective detection of risks associated with their activity in order to safeguard their assets and ensure the transparency of their corporate governance. |
Adopted | 3.7 |
|---|---|---|
| II.1.1.3. Management and supervisory bodies shall have their own regulations which shall be posted on the company's website. |
Adopted | 3.1.3/3.3.3/7.3 |
| II.1.2. – Incompatibilities and independence | ||
| II.1.2.1. The Board of Directors shall include a number of non-executive members to guarantee its effective ability to supervise, audit and assess the work of the executive members. |
Adopted | 1.2.2/1.2.6.1/3.1.3 |
| II.1.2.2. The non-executive directors must include a suitable number of independent directors, taking into account the size of the company and its shareholder structure. This number shall be no less than one quarter of the total number of directors. |
Adopted | 1.2.2/1.2.6.1 |
| II.1.3. – Eligibility and appointment | ||
| II.1.3.1. Depending on the applicable model, the chairperson of the Audit Committee or Financial Committee shall be independent and have the necessary competences to perform his/her duties. |
Adopted | 1.2.2/1.3/3.3 |
| II.1.4. – Whistle-blowing policy | ||
| II.1.4.1. The company shall adopt a whistle-blowing policy for reporting irregularities occurring in it, indicating the following information: i) means by which irregularities can be reported within the company, including the names of the people qualified to receive reports, ii) the treatment to be given to reports, including confidentiality if the whistle-blower so wishes. |
Adopted | 3.9 |
| II.1.4.2. The general lines of this policy shall be set forth in the corporate governance report. |
Adopted | 3.9 |
| II.1.5. – Remuneration | ||
| II.1.5.1. The remuneration of the members of the Board of Directors shall be structured in such a way as to ensure that their interests are in line with that of the company. In this context: i) The remuneration of executive directors shall include a performance-based component and a performance evaluation conducted by the competent body shall therefore be taken into account. ii) The variable component shall be such as to maximise the company's long-term performance and shall depend on the sustainability of the performance variables adopted. iii) When not otherwise required by law, the remuneration of the non-executive members of the Board of Directors shall consist exclusively of a fixed amount. |
Adopted | 5.1/5.2/5.3 |
II.1.5.2. The Remuneration Committee and the Board of Directors shall submit to the annual general meeting a statement on pay policy of the members of the managing and supervisory bodies and other managers, as set forth in Article 248-B(3) of the Securities Code. In this context, the shareholders shall be informed of the criteria and main parameters used to evaluate performance for the purpose of calculating the variable component, whether it is in the form of rewards in shares, share options or other components.
II.1.5.3. At least one representative of the Remuneration Committee shall attend annual general meetings.
II.1.5.4. A proposal to approve share distribution or share option plans or plans based on variations in share price to members of the managing and supervisory bodies and other managers, as set forth in Article 248-B(3) of the Securities Code shall be submitted to the general meeting. The proposal shall contain all the necessary information for a correct evaluation of the plan. The proposal shall be accompanied by the regulations of the plan or, if they have not yet been drawn up, the general conditions with which they must comply. The main characteristics of the retirement benefit system for members of the managing and supervisory bodies and other managers, as set forth in Article 248-B(3) of the Securities Code shall be approved by the general meeting.
II.1.5.5. The remuneration of each member of the managing and supervisory bodies shall be published, distinguishing, whenever appropriate, between fixed and variable remuneration and between remuneration received from other group companies or companies controlled by shareholders owning qualifying holdings.
| Adopted | 5.4 |
|---|---|
| Adopted | 5.6 |
| Not applicable | 5.3/5.7 |
Adopted ("EDP Renováveis informs its shareholders of the remuneration of its CEO and breaks it down into fixed and variable remuneration. However, EDP Renováveis considers that the remuneration of the remaining members of the Board of Directors and Audit Committee should be disclosed to shareholders as a whole (specifying the fixed and variable remuneration), as it feels that the performance of the managing and supervisory bodies should be analysed globally and provide a collective overview.")
II.2.1. Within the limits established by law for each managing and supervisory body, and unless the company is small in size, the Board of Directors shall delegate the day-to-day running of the company. The duties delegated shall be identified in the annual corporate governance report.
II.2.2. The Board of Directors shall ensure that the company acts in accordance with its goals and shall not delegate its powers to: i) define the company's general strategy and policies; ii) define the group's corporate structure; iii) make decisions that should be considered strategic due to their amount, risk or special characteristics.
II.2.3. If the chairperson of the Board of Directors has executive functions, the Board of Directors shall find efficient mechanisms for coordinating the work of the non-executive members to ensure that they can make independent, informed decisions. These mechanisms shall be explained to the shareholders in the annual corporate governance report.
Adopted 3.1/3.2.1/3.3
5.3
Not adopted ("Under Spanish law, the matters referred to in this recommendation can be delegated to the Executive Committee. It is common practice in Spanish listed companies for the delegation of powers to be far-reaching, with the exception of matters related to the preparation of accounts.")
Adopted 3.1.3
| II.2.4. The company's annual report shall include a description of the work done by the non-executive directors and mention any constraints arising. |
Adopted | 3.1.3 |
|---|---|---|
| II.2.5. The Board of Directors shall rotate the financial director at least at the end of every two terms. |
Not applicable ("The Board of Directors only took office in the first half of 2008.") |
|
| II.3. – CEO, Executive Committee and executive Board of Directors | ||
| II.3.1. When asked to do so by other members of the corporate bodies, executive directors shall provide the appropriate information in good time. |
Adopted | 3.2.1.3 |
| II.3.2. The chairperson of the Executive Committee shall send to the chairperson of the Board of Directors and, as applicable, the chairperson of the Supervisory Board or Audit Committee invitations to and minutes of its meetings. |
Adopted | 3.2.1.3. |
| II.3.3. The chairperson of the Executive Board of Directors shall send to the chairperson of the General and Supervisory Board and the chairperson of the Financial Committee invitations to and minutes of its meetings. |
Not applicable | |
| II.4. – General and supervisory board, financial committee, audit committee and supervisory board |
||
| II.4.1. In addition to its supervisory duties, the General and Supervisory Board shall advise, monitor and constantly assess the company's management by the Executive Board of Directors. The matters on which the General and Supervisory Board shall give opinions include: i) the company's general strategy e policies, ii) the group's corporate structure and iii) decisions that are considered strategic due to their amount, risk or special characteristics. |
Not applicable | |
| II.4.2. The annual reports on the work of the General and Supervisory Board, Financial Committee, Audit Committee and Supervisory Board shall be published on the company's website together with the financial statements. |
Adopted | 3.3.4./7.3 |
| II.4.3. The annual reports on the work of the General and Supervisory Board, Financial Committee, Audit Committee and Supervisory Board shall include a description of their supervision and mention any constraints found. |
Adopted | 3.3.4/7.3 |
| II.4.4. The Financial Committee, Audit Committee and Supervisory Board, depending on the model adopted, shall represent the company for all purposes in relations with the external auditor and shall propose an auditor to provide these services and his/her fees, ensure that the company offers all the right conditions for the provision of these services, act as an interlocutor for the company and be first recipient of the auditor's reports. |
Adopted | 3.3.2 |
| II.4.5. Every year, the Financial Committee, Audit Committee and Supervisory Board, depending on the model adopted, shall evaluate the external auditor and propose his/her discharge to the general meeting, if there is due cause. |
Adopted | 3.3.2/3.8 |
| II.5.1. Unless the company is small in size, the Board of Directors and the General and Supervisory Board, depending on the model adopted, shall set up any necessary committees to: i) conduct a competent, independent evaluation of the performance of the executive directors and assess their own overall performance and that of the different committees, ii) reflect on the company's governance system, check its effectiveness and suggest measures for improving it to the competent bodies. |
Adopted | 1.1/2.2.2/3.3.2 |
|---|---|---|
| II.5.2. The members of the Remuneration Committee or equivalent shall be independent from the members of the Board of Directors. |
Not applicable ("The members of the Nomination and Remuneration Committee are members of the Board of Directors. However, its members are considered independent members and do not therefore belong to the Executive Committee. In accordance with Articles 9 and 130 of the Spanish Public Company Law, the remuneration scheme for directors should be fixed in the articles of association. It is normal practice in Spanish companies for this remuneration to be decided upon by the General Meeting of Shareholders and for its allocation to the different members of the Board of Directors to be decided on by the Board itself)." |
1.2.6.2/3.2.2.1 |
| II.5.3. All committees shall draft minutes of their meetings. | Adopted | 3.2.1.3 / 3.2.2.3 / 3.2.3.3./ 3.3.3 |
| III. – Disclosure and audits | ||
| III.1. – General disclosure obligations | ||
| III.1.2. Companies shall ensure permanent contact with the capital market, abide by the principle of equality between shareholders and prevent asymmetries in access to information by investors. The company shall maintain an investor relations office for the purpose. |
Adopted | 7.1 / 7.2 |
| III.1.3. The following information shall be posted on the company's website in English: a. Its name, status as a listed company, registered office and other information mentioned in Article 171 of the Company Code; b. Its Articles of Association; c. The names of the members of the corporate bodies and market liaison officer; d. Investor relations office, its functions and contact information; e. Financial statements; f. Half-yearly calendar of company events; g. Proposals submitted for discussion and voting at general meetings; h. Invitations to general meetings. |
Adopted | 7.3 |
Article 20.2 of the EDP Renováveis Articles of Association qualifies as independent directors who can perform their jobs without being limited by relations with the company, its shareholders with significant holdings or its directors and meet the other legal requirements.
For the purpose of this statement of compliance with independence criteria and for the sake of comparison between EDP Renováveis and the other companies quoted on Eurolist by Euronext Lisbon in matters of compliance with corporate governance recommendations, we have also considered the criteria for appraising independence and incompatibilities set forth in Article 414(5), both of the Codigo das Sociedades Comerciais, and so the Board of Directors of EDP Renováveis considers that the following directors meet these criteria of independence required by law and the Articles of Association:
| Name | Position | Age | Date of appointment | End of term |
|---|---|---|---|---|
| José Silva Lopes | Director (independent) Member of Audit Committee |
76 | 04/06/2008 | 04/06/2011 |
| António Nogueira Leite | Director (independent) | 46 | 04/06/2008 | 04/06/2011 |
| Rafael Caldeira Valverde | Director (Independent) | 55 | 04/06/2008 | 04/06/2011 |
| José Araújo e Silva | Director (independent) | 57 | 04/06/2008 | 04/06/2011 |
| Jorge Santos | Director (independent) | 57 | 04/06/2008 | 04/06/2011 |
| Francisco José Queiroz de Barros de Lacerda | Director (independent) Member of Audit Committee |
48 | 04/06/2008 | 04/06/2011 |
| João Manuel de Mello Franco | Director (independent) Chairperson of Audit Committee |
62 | 04/06/2008 | 04/06/2011 |
| João Lopes Raimundo | Director (independent) | 48 | 04/06/2008 | 04/06/2011 |
| Daniel M. Kammen | Director (independent) | 46 | 04/06/2008 | 04/06/2011 |
With regard to the situations set forth in Article 414-A(1) of the Company Code, the director António Nogueira Leite holds the position of director with more than five companies.
EDP Renováveis, has adopted the governance structure in effect in Spain. It comprises a General Meeting of Shareholders, which expresses corporate wishes, and a Board of Directors that represents and manages the company.
As required by law and the Articles of Association, the Company's Board of Directors has set up four committees. They are the Executive Committee, the Audit and Control Committee, the Nomination and Remuneration Committee and the Committee on Related-Party Transactions.
The Company's governance structure is shown in the chart below.
The governance model of EDP Renováveis is designed to ensure the transparent, meticulous separation of duties and the specialisation of supervision. The following are the most important bodies in the management and supervision model at EDP Renováveis:
The adoption of this model by EDP Renováveis is intended to adapt the Company's corporate governance to the specificities of Portuguese legislation, due to the fact that Spanish law is its personal law. The governance model adopted by EDP Renováveis therefore seeks, insofar as it is compatible with its personal law, to correspond to the Anglo-Saxon model set forth in the Código das Sociedades Comerciais, in which the management body is a Board of Directors, and supervision and control are the responsibility of an Audit Committee.
The choice of this model is essentially an attempt to establish compatibility between two different systems of company law, which can be considered applicable to the model.
Although EDP Renováveis shares were only admitted to trading on Eurolist by Euronext Lisbon in mid-2008, experience of institutional operating indicates that the governance model adopted by the shareholders is appropriate to the corporate organisation of EDP Renováveis activity, especially because it affords a healthy balance between the management functions of the Executive Committee, the supervisory functions of the Audit and Control Committee and oversight by different specialised Board of Directors committees.
The institutional and functional relationship between the Executive Committee, Audit and Control Committee and the other non-executive members of the Board of Directors has proved very positive and has fostered internal harmony conducive to the development of the company's businesses.
In order to ensure a better understanding by its shareholders of EDP Renováveis corporate governance, the Company posts its updated Articles of Association on www.edprenovaveis.com.
The General Meeting of Shareholders is the Company's highest governing body. It is a meeting of shareholders that, when properly convened, has the power to decide and adopt majority decisions on matters that the law and the Articles of Association set forth that it should decide and be submitted for its approval.
The Board of the General Meeting is responsible for organising its proceedings. It is made up of the Chairperson of the Meeting, the Chairperson of the Board of Directors, or his/her substitute, the other Board members and the Secretary of the Board of Directors.
The Board of Directors has the broadest powers for the management and governance of the Company, with no limitations other than the competences expressly allocated exclusively to the General Meeting of Shareholders by law or the Articles of Association.
The structure, competences and functioning of the Board of Directors are described in more detail in point 3.1.
The Board of Directors currently consists of the following fifteen (15) members:
| Name | Position | Age | Date of appointment | End of term |
|---|---|---|---|---|
| António Mexia | Chairman and Director | 51 | 3/18/08 | 3/18/11 |
| Ana Maria Fernandes | Vice-Chairman, CEO | 46 | 3/18/08 | 3/18/11 |
| António Martins da Costa | Director | 54 | 3/18/08 | 3/18/11 |
| Nuno Alves | Director | 50 | 3/18/08 | 3/18/11 |
| João Manso Neto | Director | 50 | 3/18/08 | 3/18/11 |
| José Silva Lopes* | Director (independent) | 76 | 6/4/08 | 6/4/11 |
| António Nogueira Leite* | Director (independent) | 46 | 6/4/08 | 6/4/11 |
| Rafael Caldeira Valverde* | Director (independent) | 55 | 6/4/08 | 6/4/11 |
| José Araújo e Silva* | Director (independent) | 57 | 6/4/08 | 6/4/11 |
| Manuel Menéndez Menéndez* | Director | 49 | 6/4/08 | 6/4/11 |
| Jorge Santos* | Director (independent) | 57 | 6/4/08 | 6/4/11 |
| Francisco José Queiroz de Barros de Lacerda* | Director (independent) | 48 | 6/4/08 | 6/4/11 |
| João Manuel de Mello Franco* | Director (independent) | 62 | 6/4/08 | 6/4/11 |
| João Lopes Raimundo* | Director (independent) | 48 | 6/4/08 | 6/4/11 |
| Daniel M. Kammen* | Director (independent) | 46 | 6/4/08 | 6/4/11 |
* Appointed in agreements adopted by the General Meeting of Edp Renováveis, S.A. on 14 May 2008, to take office as members of the Board of Directors on 4 June 2008
The positions held by the members of the Board in the last five (5) years, those that they currently hold and positions in Group and non-Group companies are listed in Annexes I, II and III, respectively. Annex IV also gives a brief description of the Board members' professional and academic careers.
Finally, the shares of EDP Renováveis owned by each Board member are described in the table in Annex V.
The Chairperson of the Board is the Chairperson of the Company and fully represents it, using the company name, implementing decisions of the General Meeting, Board of Directors and the Executive Committee.
Without prejudice to the powers of the Chairperson under the law and Articles of Association, he also has the following powers:
The Chairperson of the Board is appointed by the members of the Board of Directors, unless this is done by the General Meeting. The current Chairperson was appointed on 18 March 2008.
It is the Vice-Chairperson who replaces the Chairperson when he is unable to attend. The Board may also delegate executive powers to the Vice-Chairperson.
The Vice-Chairperson is appointed by the Board of Directors on the proposal of the Chairperson. The Vice-Chairperson was appointed on 18 March 2008.
The Board of Directors may appoint one or more CEOs. CEOs are appointed on the proposal of the Chairperson or two-thirds of the directors. CEOs are appointed with a vote in favour of two-thirds of the directors and must be chosen from among the Board members.
The competences of each CEO are those deemed appropriate in each case by the Board, with the only requirement being that they are delegable under the law and Articles of Association.
The CEO was appointed on 4 June 2008 and the competences allocated to her include coordination of the implementation of Board and Executive Committee decisions, monitoring, leading and coordinating the management team, representing the company in dealings with third parties and other related duties.
| CEO | |
|---|---|
| Ana Maria Fernandes |
The duties of the Company Secretary are those set forth in current laws, the Articles of Association and Board Regulations. In particular, in accordance with the Board Regulations and in addition to those set forth in the Articles of Association, his competences are:
The Company Secretary, who is also the General Secretary and Director of the Legal Department at EDP Renováveis, was appointed on 4 December 2007.
Emilio García-Conde Noriega
The structure, competences and operation of the Executive Committee, Nomination and Remuneration Committee and the Committee on Related-Party Transactions are described in point 3.2. Nonetheless, the nature of the committees and the names of their members are detailed below.
The Executive Committee is a permanent body to which all competences of the Board of Directors that are delegable under the law and the Articles of Association can be delegated, with the exception of i) election of the Chairperson of the Board of Directors, ii) appointment of directors by cooption, iii) requests to convene or convening of General Meetings, iv) preparation and drafting of the Annual Report and Accounts and submission to the General Meeting, v) change of registered office and vi) drafting and approval of mergers, spin off or transformation of the company.
The committee currently consists of five (5) members, who were appointed on 4 June 2008, plus the Secretary.
| Executive Committee | ||
|---|---|---|
| Chairman | António Mexia | |
| CEO | Ana Maria Fernandes | |
| António Martins da Costa | ||
| Nuno Alves | ||
| João Manso Neto | ||
| Secretary | Emilio García-Conde Noriega |
The members of the Executive Committee shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the Executive Committee at any time and the members may resign said positions while still remaining Company directors.
The Nomination and Remuneration Committee is a permanent body of a merely informative and advisory nature and its recommendations and reports are not binding.
The Nomination and Remuneration Committee currently consists of three (3) independent members, who were appointed on 4 June 2008, plus the Secretary.
| Nomination and Remuneration Committee | |||
|---|---|---|---|
| Chairman | Jorge Santos | ||
| João Lopes Raimundo | |||
| Rafael Caldeira Valverde | |||
| Secretary Emilio García-Conde Noriega |
None of the committee members are spouses or up to third-degree relatives in direct line of the other members of the Board of Directors.
The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company directors.
The Committee on Related-Party Transactions is a body of the Board of Directors.
The committee currently consists of three (3) members, who were appointed on 4 June 2008, plus the Secretary.
| Committee on Related-Party Transactions | ||
|---|---|---|
| Chairman | António Nogueira Leite | |
| João Manuel de Mello Franco | ||
| João Manso Neto | ||
| Secretary | Emilio García-Conde Noriega |
The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company directors.
The Audit and Control Committee is a permanent body and performs supervisory tasks independently from the Board of Directors.
The committee currently consists of three (3) members who are independent directors and were appointed on 4 June 2008, plus the Secretary.
| Audit and Control Committee | |||
|---|---|---|---|
| Chairman | Joâo Manuel de Mello Franco | ||
| José Silva Lopes | |||
| Francisco José Queiroz de Barros de Lacerda | |||
| Secretary Emilio García-Conde Noriega |
|||
The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company directors.
The structure, competences and functioning of the Audit and Control Committee are described in point 3.3.
EDP Renováveis has adopted the following organisation chart for its management:
The EDP Renováveis management team consists of the Chief Executive Officer, four areas of responsability (Chief Financial Officer, Chief Business Development Officer, Chief Operating Officer for Europe and Chief Operating Officer for North America) and Company Secretary and Legal Counsel. The functions and competences of the management team, with the exception of the Chief Executive Officer, whose functions have already been described and who runs the management team, are as follows:
It is the Chief Financial Officer's job:
• To propose and ensure the implementation of the Group's financial policy and management, including (i) negotiating, managing and controlling financing, (ii) optimizing cash management and (iii) proposing financial risk management policy;
The job of the Chief Business Development Officer is to promote, direct and approve the development of EDP Renováveis business. In line with the strategic plan and in coordination with the other members of the management team, he must increase the value of the group's business portfolio, while watching the potential and risks of markets and new technologies. His teams coordinate and implement new business development initiatives in new countries and are responsible for monitoring and assessing investments in the consolidated platforms in Europe and the United States.
It is the job of the Chief Operating Officer for Europe to coordinate the EDP Renováveis European platform in establishing, developing and implementing the EDP Renováveis group's strategic plan for the renewable energies business, drafting and implementing the strategic plan for Europe in accordance with the guidelines set by the Board of Directors of EDP Renováveis, planning, organising and managing resources, controlling, measuring and improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDP Renováveis a leader in the renewable energy sector in Europe.
The Chief Operating Officer for North America is responsible for coordinating the North American platform of EDP Renováveis in establishing, developing and implementing the EDP Renováveis group's strategic plan for the renewable energies business, drafting and implementing the strategic plan for the United States, in accordance with the guidelines set by the Board of Directors of EDP Renováveis, planning, organising and managing resources, controlling, measuring and
improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDP Renováveis a leader in the renewable energy sector in the United States.
S/he assists the Board of Directors in its legal, administrative and logistics activities to ensure that it functions effectively, provides legal advice to the group in order to guarantee compliance with applicable legislation, and provides legal support at Board meetings, including the circulation of its decisions.
In 2008, the EDP Renováveis shareholder structure changed significantly after the institutional public offering (IPO) of 196,024,306 shares representing 22.5% of its share capital. As at 31 December 2007, 80% of the share capital of EDP Renováveis was owned by EDP – Energias de Portugal Sucursal Espanha, S.A. ("EDP") and 20% by Hidroeléctrica del Cantábrico, S.A. (Hidrocantábrico), 97% of which is owned by EDP. The initial public offering took place in June 2008 through a share capital increase of 196,024,306 shares and admission to trading at Euronext Lisboa of the 872,308,162 shares of EDP Renováveis, with a face value of € 5.00 each. Following the IPO, the shareholder structure is as follows:
| 31 Dec 2008 | No. shares |
|---|---|
| EDP | 541,027,156 |
| Hidrocantábrico | 135,256,700 |
| Free float | 196,024,306 |
| Total | 872,308,162 |
All EDP Renováveis shares are of the same category. Under the Spanish Ley de Sociedades Anónimas, approved by Royal Decree 1564/1989 of 22 December 1989 (hereinafter Public Company Law) and the Articles of Association of EDP Renováveis, the owner of a share becomes a shareholder with all the inherent rights and obligations established in the Public Company Law and articles of association of EDP Renováveis. The most important rights inherent in shares are the right to receive dividends, the right to obtain general information on any matters to be discussed at General Meetings, general rights to attend, voting rights, the right to object to company decisions, pre-emptive rights in share capital increases and the right to participate in the distribution of assets if EDP Renováveis is dissolved.
In December 2008, EDP Renováveis had around 140,000 institutional and private shareholders in over 50 countries, with special focus on Portugal, the United States, United Kingdom and the rest of Europe. The pie chart below shows the geographical division of the EDP Renováveis free float.
Qualifying shareholdings in EDP Renováveis are subject to Spanish law, which regulates the criteria and thresholds of shareholders' holdings. As at 31 December 2008 no qualifying shareholdings in EDP Renováveis with the exception of EDP and Hidrocantábrico were identified.
EDP Renováveis shares are of a single class and series and have been fully paid up. There are no holders of special rights.
Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDP Renováveis shares.
As far as the Board of Directors of EDP Renováveis knows, there are currently no shareholders' agreements regarding the Company.
Pursuant to Articles 10 and 19 et seq of the Articles of Association of EDP Renováveis, the Company's managing body is a Board of Directors, and there are four committees stemming from it. They are the Executive Committee, the Audit and Control Committee, the Nomination and Remuneration Committee and the Committee on Related-Party Transactions.
Pursuant to Articles 20 and 21 of the Company's Articles of Association, the Board of Directors shall consist of no fewer than five (5) and no more than seventeen (17) directors. Their term of office shall be three (3) years, and they may be re-elected once or more times for equal periods. The Board of Directors currently consists of fifteen (15) members, whose particulars were indicated in point 1.2.2. above.
Pursuant to Article 19 of the Company's Articles of Association, the Board of Directors has the broadest powers for the administration, management and governance of the Company, with no limitations other than the responsibilities expressly and exclusively invested in General Meetings in the Company's Articles of Association or applicable law. The Board is therefore expressly empowered to:
in general in dealings with the public administration at all levels and to intervene or promote, pursue and end by all proceedings and instances any processes, judgements and proceedings, to consent to settlements, lodge all classes of appeal, including cassation and other extraordinary actions, to drop cases or settle, make concessions, submit disputes to arbitration, make all kinds of notifications and applications and grant powers to attorneys and other representatives to settle cases, with the authority for the case and those usual in general for lawsuits and special authority to grant and revoke these powers;
Regarding decisions to increase the share capital, the Board of Directors, by delegation from the General Meeting, may decide to increase the share capital once or several times. This delegation, which may be the subject of replacement, can include the power to demand a pre-emptive right in the issue of shares that are the subject of delegation and with the requirements established by law.
On the other hand, the General Meeting may also delegate to the Board of Directors the power to implement an adopted decision to increase the share capital, indicating the date or dates of its implementation and establishing any other conditions that have not been specified by the General Meeting. This delegation may be the subject of replacement. The Board of Directors may use this
delegation wholly or in part and may also decide not to perform it in consideration of the conditions of the Company, the market or any particularly relevant events or circumstances that justify said decision, of which the General Meeting must be informed at the end of the time limit or limits for performing it.
In addition to the Articles of Association and the law, the Board of Directors is governed by the regulations approved on 13 May 2008. The regulations on the functioning of the Board are available to Company shareholders on the website www.edprenovaveis.com.
The Board of Directors must meet at least four (4) times a year, preferably once a quarter. Nonetheless, the Chairperson, on his own initiative or that of three (3) directors, shall convene a Board meeting whenever he deems it in the Company's interest. The Board of Directors held seventeen (17) meetings during the year ended on 31 December 2008.
Meetings are convened by the Chairperson, who may order the Secretary to send the invitations. Invitations shall be sent at least five (5) days prior to the date of the meeting. On exception, when the circumstances so require, the Chairperson may call a meeting of the Board without respecting the required advance notice.
The meetings of the Board are valid if half of the directors plus one are present or represented. Directors shall attend Board meetings personally and, on exception, if they are unable to do so, they shall delegate their representation in writing to another Board member. Without prejudice to the above, the Board of Directors shall be deemed to have been validly convened, with no need for an invitation, if all the directors present or represented agree unanimously to hold the meeting as universal and accept the agenda to be dealt with at it.
Decisions are adopted by absolute majority among those present. Each director present or represented has one vote and the Chairperson has the casting vote in the event of a tie.
In order for the non-executive directors to be able to decide independently and be informed, Articles 22, 24 and 25 of the Board regulations established the following mechanisms:
Company's operations. In order to prevent distortions in the Company management, the exercise of the powers to obtain information shall be channelled through the Chairperson or Secretary of the Board of Directors;
• Any director may request the hiring, on the Company's account, of legal advisers, accountants, financial or commercial specialists or other experts. The performance of the job must necessarily relate to concrete problems of a certain importance and complexity. Requests to hire experts shall be channelled through the Chairperson or Secretary of the Board of Directors, who shall be subject to the approval of the Board of Directors.
Thanks to the mechanisms set forth in the regulations, non-executive directors have encountered no difficulties in performing their duties.
In 2008, the non-executive directors were involved in the governance of EDP Renováveis not only by participating in meetings of the Board of Directors, where they gave their opinions on different company matters, made any suggestions they saw fit and took decisions on matters submitted to them, but also by working on the Nomination and Remuneration Committee, Committee on Related-Party Transactions and Audit and Control Committee, where all the members are non-executive, with the exception of the Committee on Related-Party Transactions, which has one executive director.
In 2008, several meetings were held with the non-executive directors in order to provide them with specific information on Company activities. The following workshops were held in September and October:
Pursuant to Article 27 of the Company's Articles of Association, the Executive Committee shall consist of no fewer than three (3) and no more than six (6) directors. The committee currently consists of the members indicated in point 1.2.6.1.
Its creation, the appointment of its members and the extension of the powers delegated must be approved by two-thirds (2/3) of the members of the Board of Directors.
The Executive Committee is a permanent body. It has currently been delegated all the Board of Directors' powers that are delegable under the law and the articles of association legal, with the exception of: i) election of the Chairperson of the Board of Directors, ii) appointment of directors by cooption, iii) requests to convene or convening of General Meetings, iv) preparation and drafting of the Annual Report and Accounts and submission to the General Meeting, v) change of registered office and vi) drafting and approval of mergers, spin off or transformation of the company.
The Executive Committee members have been delegated all the powers of representation of the Company so that any of its members can act jointly in the name and on behalf of the Company.
In addition to the Articles of Association, this committee is also governed by the regulations approved on 4 June 2008 and also by the Board Regulations. The committee's regulations are at the shareholders' disposal on www.edprenovaveis.com.
The Executive Committee shall meet at least once a month and whenever deemed appropriate by its Chairperson, who may also suspend or postpone meetings when he sees fit. The Executive Committee shall also meet when requested by at least two (2) of its members. The Executive Committee held eleven (11) meetings during the year ended on 31 December 2008.
The Executive Committee shall draft minutes for each of the meetings held and shall inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The Chairperson of the Executive Committee, who is currently also the Chairperson of the Board of Directors, shall send the Chairperson of the Audit and Control Committee invitations to the Executive Committee meetings and the minutes of said meetings.
Meetings of the Executive Committee shall be valid if half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. In the event of a tie, the Chairperson shall have the casting vote.
Pursuant to Article 29 of the Company's Articles of Association, the Appointments and Remunerations Committee shall consist of no fewer than three (3) and no more than six (6) directors. At least one of its members must be independent and shall be the Chairperson of the committee.
The members of the committee should also not be members of the Executive Committee. The committee currently consists of the members indicated in point 1.2.6.2 and are all independent directors.
The Appointments and Remunerations Committee is made up of independent members of the Board of Directors, in compliance with Recommendation 44 of the Unified Code of Good Governance approved by decision of the Board of the Spanish Securities Committee (hereinafter the CNMV), as amended by CNMV Circular 4/2007 of 27 December, which lays down that the Appointments and Remunerations Committee must be entirely made up of external directors numbering no fewer than three (3). As it is made up of independent directors (in Spain the committee may only be comprised of directors) it complies as completely as possible with the recommendation indicated in point II.5.2 of the Portuguese Code of Corporate Governance.
The Appointments and Remunerations Committee is a permanent body of a merely informative and advisory nature and its recommendations and reports are not binding.
The Appointments and Remunerations Committee has no executive functions. The main functions of the Appointments and Remunerations Committee are to assist and report to the Board of Directors about appointments (including by cooption), re-elections, dismissals and remunerations of the Board and its positions, about the composition of the Board and the appointment, remuneration and dismissal of senior management personnel. The Appointments and Remunerations Committee shall also inform the Board of Directors on general remuneration policy and incentives to them and senior management. These functions include the following:
• To define the principles and criteria regarding the membership of the Board of Directors and the selection and appointment of its members;
In addition to the articles of association, the Appointments and Remunerations Committee is governed by the Regulations approved on 4 June 2008 and also by the Board regulations. The committee's regulations are at the shareholders' disposal on www.edprenovaveis.com.
This committee shall meet at least once every quarter and also whenever its Chairperson sees fit.
This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The meetings of this committee shall be valid if at least half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the deciding vote in the event of a tie.
In 2008 the Appointments and Remunerations Committee held four (4) meetings. The main proposals made by the Committee during the year were:
Pursuant to Article 30 of the Articles of Association, the Board may set up other committees, such as the Related Party Transactions Committee. This committee shall consist of no fewer than three (3) members. The majority of the members of the Related Party Transactions Committee shall be independent.
Members of the Related Party Transactions Committee shall be considered independent if they can perform their duties without being conditioned by relations with EDP Renováveis, its majority shareholders or its directors and, if this is the case, meet the other requirements of applicable legislation.
The committee currently consists of the members indicated in point 1.2.6.3.
The Related Party Transactions Committee is a body belonging to the Board of Directors and performs the following duties, without prejudice to others that the Board may assign to it:
• Periodically informing the Company's Board of Directors of business and legal relations to be established between EDP or related parties and EDP Renováveis or related parties;
Should the Related Party Transactions Committee not ratify business or legal relations between EDP or its related parties and EDP Renováveis and its related parties, said relations shall require the approval of two-thirds (2/3) of the members of the Board of Directors, whenever at least half of the members proposed by entities other than EDP, including independent directors, vote in favour, unless, before submission for ratification by the Related Party Transactions Committee, this majority of members has voiced it approval.
The previous paragraphs shall not apply to operations between EDP or its related parties and EDP Renováveis or its related parties that have standardised conditions and are applied in the same way, including when the conditions regard price, to different parties related to EDP and EDP Renováveis and their related parties.
In addition to the Articles of Association, the Related Party Transactions Committee is governed by the regulations approved on 4 June 2008 and by the Board Regulations. The committee's regulations are at the shareholders disposal on www.edprenovaveis.com.
The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit.
This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The meetings of this committee shall be valid if at least half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.
In 2008, the Related Party Transactions Committee held four (4) meetings. The committee analysed the agreements between EDP Renováveis and companies in the EDP Group that do not belong to the subgroup in which the dominant company is EDP Renováveis submitted for its consideration.
The committee revised, approved and proposed to the Board of Directors the approval of all agreements and contracts between related parties submitted for its consideration. Regarding the framework agreement between EDP and EDP Renováveis, the contents of which are described in point 3.6 of this report, the Company Secretary was asked to give an opinion on the compliance of the agreement with the Articles of Association. His opinion was that it did.
Point 3.6 of this report includes a description of the fundamental aspects of the agreements and contracts between related parties the object of which does not pertain to the ordinary course of EDP Renováveis business.
Pursuant to Article 28 of the Articles of Association, the Audit and Control Committee consists of no fewer than three (3) and no more than five (5) directors. The majority of the members shall be independent directors. The committee currently consists of the members indicated in point 1.3.
The Audit and Control Committee is a permanent body and performs independent supervision of the work of the Board of Directors. The competences of the Audit and Control Committee are as follows:
• Proposing to the Board of Directors for submission to the General Meeting the appointment of Company Auditors and the terms of their hiring, scope of their work and revocation and renewal of their contracts;
• Supervising internal auditing activities;
In addition to the Articles of Association and the law, this committee is governed by the regulations approved on 4 June 2008 and also by the Board regulations. The committee's regulations are at the shareholders' disposal on www.edprenovaveis.com.
The committee shall meet at least once a quarter and additionallywhenever its Chairperson sees fit. In 2008, the Audit and Control Committee met eleven (11) times not only to monitor the closure of quarterly accounts in the first halfyear but also to familiarise itself with the preparation and disclosure of financial information, internal audit, internal control and risk management activities.
This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The meetings of the Audit and Control Committee shall be valid if at least half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.
In 2008, the Audit Committee's activities included the following: (i) assessment of its own draft internal regulations, (ii) analysis of relevant rules to which the committee is subject in Portugal and Spain, (iii) appraisal of the independence and responsibilities of the external auditor for his/her duties, (iv) assessment of the external auditor's work, (v) supervision of the quality and integrity of the financial information in the financial statements and participation in the Executive Committee meeting at which these documents were analysed and discussed, (vi) drafting of an opinion in the individual and consolidated annual reports and accounts, (vii) supervision of the quality, integrity and efficacy of the internal control system, risk management and internal auditing and (viii) reflection on the corporate governance system adopted by EDP Renováveis.
The Audit and Control Committee found no constraints during its control and supervision activities.
A report on the activities of the Audit Committee in the year ended on 31 December 2008 is available to shareholders on www.edprenovaveis.com.
Following the recommendations of the CMVM, Article 12 of the Board regulations requires at least twenty-five percent (25%) of the Board members to be independent directors, who are considered to be those who can perform their duties without being conditioned by relations with the Company, its significant shareholders or directors and, if applicable, meet the requirements of applicable laws.
In addition, pursuant to Article 23 of the Articles of Association, the following may not be directors:
• People who are directors of or are associated with any competitor of EDP Renováveis and those who are related to the above. A company shall be considered to be a competitor of EDP Renováveis if it is directly or indirectly involved in the generation, storage, transmission, distribution, sale or supply of electricity or combustible gases and also those that have interests opposed to those of EDP Renováveis, a competitor or any of the companies in its Group, and directors, employees, lawyers, consultants or representatives of any of them. Under no circumstances shall companies belonging to the same group as EDP Renováveis, including abroad, be considered competitors;
• People who are in any other situation of incompatibility or prohibition under the law or Articles of Association. Under Spanish law, people, among others, who are i) aged under eighteen (18) years, (ii) disqualified, (iii) competitors; (iv) convicted of certain offences or (v) hold certain management positions are not allowed to be directors.
Each member of the Board of Directors is appointed by majority of the General Meeting for an initial period of three (3) years and may be re-elected once or more times for further periods of three (3) years. Nonetheless, pursuant to Article 23 of the Articles of Association and 137 of the Public Company Law, shareholders so wishing may group their shares until they constitute an amount of capital equal to or higher than the result of dividing it by the number of Board members and appoint those that, using only whole fractions, are deducted from the corresponding proportion. Those making use of this power cannot intervene in the appointment of the other members of the Board of Directors.
Given that the directors do not have to be elected on the same date, if there is a vacancy, pursuant to Article 23 of the Articles of Association and 137 of the Public Company Law, the Board of Directors may co-opt people from the shareholders, who will occupy the position until the first General Meeting, which shall ratify the co-opted director. Pursuant to Article 139 of the Public Company Law, the co-option of directors, as for other Board decisions, must be approved by absolute majority of the directors at the meeting.
Pursuant to Article 28 of the Articles of Association, the members of the Audit and Control Committee are appointed by the Board of Directors. The term of office of the members of the Audit and Control Committee is the same as their term as directors. The committee members, the majority of whom must be independent, can be reelected and discharged by the Board of Directors at any time. The term of office of the Chairperson of the Audit Committee is three (3) years, after which he may only be re-elected for a new term of three (3) years. Nonetheless, chairmen leaving the committee may continue as members of the Audit and Control Committee.
EDP Renováveis has signed no contracts with the members of the corporate bodies at the close of 2008.
Regarding related party transactions, EDP Renováveis and/or its subsidiaries have signed the contracts detailed below with EDP – Energias de Portugal, S.A. (hereinafter, EDP) or other members of its group not belonging to the EDP Renováveis subgroup.
The framework agreement was signed by EDP and EDP Renováveis on 7 May 2008 and came into effect when the latter was admitted to trading. The purpose of the framework agreement is to set out the principles and rules governing the legal and business relations existing when it came into effect and those entered into subsequently.
The framework agreement establishes that neither EDP, nor the EDP Group companies other than EDP Renováveis and its subsidiaries can engage in activities in the field of renewable energies without the consent of EDP Renováveis. EDP Renováveis shall have the world exclusive, with the exception of Brazil, where it shall engage in them jointly with EDP – Energias do Brasil, S.A., for the development, construction, exploitation, operation and maintenance of facilities or activities related to wind, solar, wave and/or tidal power and other renewable energy generation technologies that may be developed in the future. Nonetheless, the agreement excludes technologies being developed in hydroelectric power, biomass, cogeneration and waste in Portugal and Spain.
The framework agreement provides for the creation of a Related Party Transactions Committee to minimize conflicts of interest.
Finally, it lays down the obligation to provide EDP with any information that it may request from EDP Renováveis to fulfil its legal obligations and prepare the EDP Group's consolidated accounts.
The framework agreement shall remain in effect for as long as EDP directly or indirectly owns more than 50% of the share capital of EDP Renováveis or appoints more than 50% of its directors.
On 4 November 2008 EDP and EDP Renováveis signed an Executive Management Services Agreement.
The object of the contract is the provision by EDP of management services, including matters related to the day-to-day running of the Company. Four people were appointed with the purpose of forming the Company management with the CEO in the Executive Committee.
Under this contract, EDP Renováveis paid to EDP the amount of €485,100 for management services for
a seven-month period in 2008, which includes the remuneration of all the executive directors.
The initial duration of the contract is until 18 March 2011.
The finance agreements between EDP and EDP Renováveis, which were approved by the Related Party Transactions Committee at its meeting of 6 October 2008 and ratified by the Board of Directors at its meeting on 9 December 2008, are as follows.
EDP Energias de Portugal, Sociedade Anónima, sucursal en España (as the lender) signed a framework loan agreement with EDP Renováveis (as the borrower), which was ratified by the Board of Directors on 9 December 2008. Its object is capital investments, project finance and general objectives of the company.
Each loan requested under this agreement shall specify what it will be used for, the amount and repayment times. The type of interest applicable to loan agreements will be 10-year Mid Swap plus a differential of 2.85% a year.
Under this agreement, a loan agreement was signed on 30 December 2008 for \$ 500,000,000 falling due on 30 December 2018, its object being the finance of EDP Renováveis capital investments.
In addition, prior to the signing of the framework agreement, on 28 November 2008 a loan agreement was signed by the same parties for \$ 1.450.000.000, falling due on 28 November 2018, type of interest 10-year Mid Swap plus a differential of 1.25% a year. Its object is the finance of EDP Renováveis capital investments.
A counter-guarantee agreement was signed, under which EDP or EDP Energias de Portugal Sociedade Anónima, sucursal en España (hereinafter guarantor) undertakes with regard to EDP Renováveis, Nuevas Energias de Occidente, SL (hereinafter EDPR EU) and Horizon Wind Energy LLC (hereinafter EDPR NA) to provide corporate guarantees or request the issue of bank guarantees, on the terms and conditions requested by the subsidiaries, which have been approved case by case by the EDP Executive Board.
EDP Renováveis will be jointly liable for compliance by EDPR EU and EDPR NA.
The subsidiaries of EDP Renováveis undertake to indemnify the guarantor for any losses or liabilities resulting from the guarantees provided under the agreement and to pay an
annual fee of 0.5% in the case of bank guarantees and 0.25% in the case of corporate guarantees on the amount guaranteed. Nonetheless, certain guarantees issued prior to the date of approval of these agreements have different conditions.
The agreement may be terminated (i) by any party at any time, whenever there are no guarantees in effect, or (ii) if any of the subsidiaries ceases to be controlled by the guarantor with regard to the guarantees provided to said subsidiary.
EDP Energias de Portugal, Sociedade Anónima, sucursal en España (hereinafter EDP Sucursal) and EDP Renováveis signed an agreement on a mandate from EDP Renováveis to EDP Sucursal to manage its cash accounts. The agreement also regulates a current account between EDP Sucursal and EDP Renováveis, with the following types of interest:
The duration of the agreement is one year as of date of signing and it is renewable tacitly for equal periods.
On 29 and 31 December 2008, EDP Renováveis, as the lender, and EDP Finance BV (hereinafter EDP BV), as the borrower, entered into two finance agreements due on 5 January 2009 at one-day Euribor with a differential of 0.1%.
The first of the financing agreements totalled € 53,025,042.50 at 2.618% interest. The second was € 30,000,000 at 1.85% interest.
On 14 May 2008, EDP and EDP Renováveis signed an agreement under which the former granted to the latter a non-exclusive license for the trademark "EDP Renováveis" for use in the renewable energy market and related activities.
In return for the granting of the trademark license, EDP Renováveis will pay to EDP fees calculated on the basis of the proportion of the costs pertaining to the former in the Group's annual budget for image and trademark services, which are subject to annual review. The fee established for 2008 was € 1.5 million.
The licence is granted indefinitely and shall remain in effect until the expiry of EDP's legal ownership of the trademark or until EDP ceases to hold the majority of the capital or does not appoint the majority of directors of EDP Renováveis. EDP may also terminate the agreement in case of non-payment or breach of contract.
The licensing agreement is restricted by the terms of the framework agreement.
On 4 June 2008, EDP and EDP Renováveis signed a consultancy service agreement.
The object of the agreement is the provision by EDP to EDP Renováveis, through EDP Sucursal, of consultancy services in the areas of legal services, internal control systems, financial reporting, taxation, sustainability, regulation and competition, risk management, customer relations and financial management and operational consultancy in the areas of human resources, human resource management, information systems, brand and communication, energy planning, accounting, corporate marketing and organisation.
The price of the agreement is calculated as the cost incurred by EDP plus a margin. For the first year, it was fixed at 8% by an independent expert on the basis of market research. For 2008 the estimated cost of these services is € 2,021,724.
The duration of the agreement is one (1) year tacitly renewable for equal periods.
On 13 May 2008, EDP Inovação, S.A. (hereinafter EDP Inovação), an EDP Group company, and EDP Renováveis signed an agreement regulating relations between the two companies regarding projects in the field of renewable energies (hereinafter the R&D Agreement).
The object of the R&D Agreement is to prevent conflicts of interest and foster the exchange of knowledge between companies and the establishment of legal and business relationships. The agreement forbids EDP Group companies other than EDP Inovação to undertake or invest in companies that undertake the renewable energy projects described in the agreement.
The R&D Agreement establishes an exclusive right on the part of EDP Inovação to projects to develop new renewable energy technologies that are already in the pilot or economic and/or commercial feasibility study phase, whenever EDP exercises its option to undertake them.
The agreement shall remain in effect for as long as EDP directly or indirectly maintains control of more than 50% of both companies or appoints the majority of the members of the Board and Executive Committee of the parties to the agreement.
On 1 January 2006, Hidroeléctrica del Cantábrico, S.A. (hereinafter HC), an EDP Group company, and EDPR EU, the leading company in the European platform of the EDP Renováveis subgroup, signed a management support service agreement.
The object of the agreement is the provision by HC to EDPR EU of tax, legal management, human resource management, occupational health and safety, system support, environment and auditing advisory services.
The remuneration paid to HC by EDPR EU in the form of fees for management support services in the year ended on 31 December 2008 was € 1,588,000.
The duration of the agreement is five (5) years from date of signing. It shall be tacitly renewed for periods of one (1) year whenever neither party renounces it fifteen (15) days in advance of its initial expiry or any of its extensions.
On 1 January 2003, Enernova – Novas Energias, S.A. (hereinafter Enernova), leader of the EDP Renováveis subgroup in Portugal, and EDP Valor – Gestão Integrada de Recursos, S.A. (hereinafter EDP Valor), an EDP Group company, signed a management support service agreement.
The object of the agreement is the provision to Enernova by EDP Valor of services in the areas of procurement, economic and financial management, fleet management, property management and maintenance, insurance, occupational health and safety and human resource management and training.
The remuneration paid to EDP Valor by Enernova and its subsidiaries for the services provided in 2008 totalled € 623,451.50.
The initial duration of the agreement was five (5) years from date of signing and it was tacitly renewed for a new period of five (5) years on 1 January 2008.
Either party may renounce the contract with one (1) year's notice.
In harmony with the EDP Group's objectives and strategy, reinforced by the admission to training of EDP Renováveis, the EDP Renováveis Group decided to set up a voluntary internal financial reporting control system abiding by international standards in order to promote the reinforcement of controls to ensure the reliability and integrity of financial information.
The activities on the European platform began in late 2007. The Control System of Finance Report (hereinafter SCIRF) was implemented in 2008 following several lines of action:
A reputed international entity collaborated within the European Platform.
In addition, in 2008 the first phase of the implementation of the system took place on the North American Platform (EDPR NA). This phase also received the support of a specialised consultant and consisted of a survey of controls in the three main areas of the model, the first two of which follow the COSO benchmark and the last the COBIT:
The EDP Renováveis Internal Audit Department is responsible for the SCIRF. Its functions include the implementation, monitoring and improvement of the system to ensure the reliability and integrity of financial information.
The main risks and uncertainties that can affect the operation performance of EDP Renováveis are the following:
EDP Renováveis business is focused on the production of electricity from renewable energy sources. The amount of energy generated by and the profitability of wind farms are dependent on climatic conditions, which vary across the locations of the wind farms, the seasons and years. Because turbines will only operate when wind speeds fall within certain specific ranges that vary by turbine type and manufacturer, if wind speeds fall outside or towards the lower end of these ranges, energy output at wind farms would decline.
Variation and fluctuations in wind conditions at wind farms may result in seasonal and other fluctuations in the amount of electricity that is generated and consequently the results of operations. Furthermore, a sustained decline in wind conditions could lead to reductions in operational efficiency, energy production and profitability.
Remuneration for electricity sold by EDP Renováveis wind farms depends, at least in part, on market prices for electricity. Market prices may be volatile as they are affected by various factors, including the cost of fuels, average rainfall levels, the cost of power plant construction, the technological mix of installed generation capacity and user demand. Therefore, a decline in market prices below anticipated levels could have a material adverse effect on EDP Renováveis business, financial condition or results of operations. EDP Renováveis currently uses various financial and commodity hedging instruments in order to reduce the exposure to fluctuating electricity prices. However, it may not be possible to successfully hedge the exposures or the company may face other difficulties in executing the hedging strategy.
EDP Renováveis is also exposed to fluctuations in interest rates through the financing, in particular, shareholder loans from the EDP Group and financing from institutional investors in connection with its Partnerships Structures in the case of the U.S. operations, as well as project financing and third party loans from entities outside the EDP Group. This risk can be mitigated using hedging instruments, including interest rate swaps, but it cannot be guaranteed that the hedging efforts will operate successfully. Finally, currency fluctuations may also have a material adverse effect on the financial condition and results of operations. EDP Renováveis may attempt to hedge against currency fluctuations risks by matching revenue and costs in the same currency, as well as by using various hedging instruments, including forward foreign exchange contracts. However, there can be no assurance that the company's efforts to mitigate the effects of currency exchange rate fluctuations will be successful.
The capital investment required to develop and build a wind farm is very high and generally varies based on the cost of the necessary fixed assets, such as turbines. The price of such equipments and/or civil construction works may increase, or continue to increase as in the case of turbines, if the market demand for such equipment or works is greater than the available supply, or if the prices of key component commodities and raw materials used to build such equipments increases.
The development and profitability of renewable energy projects is dependent on policies and regulatory frameworks that support such development. The jurisdictions in which EDP Renováveis operates provide various types of incentives that support the sale of energy generated from renewable sources.
Support for renewable energy sources has been strong in previous years, and both the European Union and various U.S. federal and state bodies have regularly reaffirmed their desire to continue and strengthen such support. However, it cannot be guaranteed that support will be maintained or that the electricity produced by future renewable energy projects will benefit from statutory purchase obligations, tax incentives, or other support measures for the generation of electricity from renewable energy sources.
Wind farms are subject to strict international, national, state, regional and local regulations relating to the development, construction, licensing and operation of power plants. Among other things, these regulate: land acquisitions, leasing and use; building, transportation and distribution permits; landscape and environmental permits; and regulations on energy transmission and distribution network congestions. If the relevant authorities in the jurisdictions in which EDP Renováveis operates fail to continue to support, or reduce their support for the development of wind farms, such actions could have a material adverse effect on the business.
Wind turbine is a significant part of a wind farm's Capital Expenditures (around 70-80%). The main risks associated to wind turbines are:
• Price risk: this occurs when the supply of wind turbines cannot meet the growing demand, and prices rise sharply, impacting profitability of new wind farms;
• Quantity risk: when no wind turbines are available for the construction of new wind farms.
In order to cope with the risks associated to its activities, EDP Renováveis has implemented several types of actions or strategies adapted to minimise the mitigation of the relevant types of risks to which it is exposed or benefits from global risk management policies used at the EDP Group level. The business unit responsible for dealing and accompanying the risk management processes is the Risk Management Directory of EDP Renováveis. The risk management of EDP Renováveis concerns the following areas of risk:
Variations in wind conditions are due to seasonal fluctuations, and these fluctuations have an impact on the amount of electricity generated. EDP Renováveis mitigates this risk by the geographical diversification of its wind farm in each country. This "portfolio effect" enables to offset wind variations in each area and to keep the total energy generation relatively steady.
The businesses of the EDP Renováveis Group are exposed to a variety of financial risks, including the effects of changes in market prices, foreign exchange and interest rates. The unpredictability of the financial markets is analysed on an on-going basis in accordance with the EDP Group's risk management policy. Financial instruments are used to minimise potential adverse effects resulting from the interest rates and foreign exchange rate risks on its financial performance.
The financial risks are assessed and managed by EDPR, being its execution undertaken by the Financial Department of EDP (following strictly the policies and guidelines mandated by EDPR, under the terms of the outsourcing of management services agreement "Contrato de Prestaçao Serviços Consultoria" between EDPR and EDP), in accordance with the policies approved by the Board of Directors. The Financial Department identifies, evaluates and submits to the Board for approval, hedging mechanisms appropriate to each exposure.
The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits.
The Group operates internationally and is exposed to the exchange rate risk resulting from investments
in subsidiaries whose functional currency is the U.S. dollar. Currently, the exposure to the U.S. dollar/euro currency fluctuation risk results principally from the shareholding in EDPR NA.
EDP Group's Financial Department is responsible for monitoring the evolution of the U.S. dollar, seeking to mitigate the impact of currency fluctuations on the financial results of the Group companies and consequently, on consolidated net profit, using exchange rate derivatives and/or other hedging structures. The policy implemented by the Group consists of undertaking derivative financial instruments for the purpose of hedging foreign exchange risks with characteristics similar to those of the hedged item. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that gave rise to them is evaluated.
The Group's operating and financial cash flows are substantially independent from the fluctuation in interest rate markets.
The purpose of the interest rate risk management policies is to reduce the financial charges and the exposure of debt cash flows from market fluctuations through the settlement of derivative financial instruments to fix the debt interest rates. In the floating-rate financing context, the Group contracts interest rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating-interest rate loans into fixed-interest rate loans. All these operations are undertaken on liabilities in the Group's debt portfolio and are mainly perfect hedges through a high correlation between changes in fair value of the hedging instrument and changes in fair value of the interest rate risk or upcoming cash flows.
The EDP Renováveis Group has a portfolio of interest rate derivatives with maturities between approximately 1 and 10 years. The EDP Group's Financial Department undertakes sensitivity analyses of the fair value of financial instruments to interest rate fluctuations.
As of December 31, 2008, EDP Renováveis faced limited market price risk. In the case of EDPR NA, most prices are fixed and principally determined by long-term power purchase agreements. In the case of Spain, electricity is sold directly on the daily market at spot prices plus a pre-defined regulated premium. EDP Renováveis also has an option of selling this electricity through regulated tariffs, guaranteeing minimum prices. In 2008 the company closed a hedge in order to mitigate pool price
fluctuations in Q4 in Spain, which mitigates the risk related to fluctuations in pool prices. In the remaining countries, prices are mainly determined through regulated tariffs (France and Portugal) or determined by long-term power purchase agreements (Brazil, Poland, Romania and Belgium).
EDP Renováveis belongs to the most prestigious wind energy associations, both at national and international level. EDP Renováveis is member of "La Asociación Empresarial Eólica" (Spain), "APREN" – Associação Portuguesa de Produtores de Energia Eléctrica de Fontes Renováveis (Portugal), Le Syndicat des Energies Renouvelables (France), ANEV (Italy) and PIGEO (Poland). These associations are important players in the process of promoting the adjustment of regulations to the needs of the renewable energy sector.
The EDP Renováveis Group policy in terms of the counterparty credit risk on financial transactions is managed by an analysis of the technical capacity, competitiveness, credit notation and exposure to each counterparty. Counterparties in derivatives and financial transactions are restricted to high-quality credit institutions, therefore, it cannot be considered that there is any significant risk of counterparty non-compliance and no collateral is demanded for these transactions.
In the specific case of EDPR EU, credit risk is not significant due to the limited average collection period for customer balances and the quality of its debtors. In Europe, main customers are operators and distributors in the energy market of their respective countries
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
Given the current condition of the debt market, it could be difficult to cover the financial requirements needed to carry out the Group's activities.
The liquidity policy followed ensures compliance with payment obligations acquired, through maintaining sufficient credit facilities and having access to the EDP Group credit facilities.
The last few years have been marked by the difficulties of the wind turbine industry in catching up with booming demand. In this high growth environment, wind power generators have endured difficulties to secure the supply of wind turbines. In response, EDP Renováveis has shifted from national and project-driven agreements to multi-year frame agreements covering several regions with built in flexibilities. This trend, however, seems to be reversing as turbine demand slows down.
EDP Renováveis uses a mix of turbine suppliers in order to reduce its dependency on any one supplier. At present EDP Renováveis is one of the generators with a more diversified portfolio, with Vestas and Gamesa the most important suppliers. The large range of EDP Renováveis suppliers allows the company to avoid technological risk of each turbine supplier. Additionally, EDP Renováveis has the required size to contract with a large range of suppliers. The following chart represents the share of EDP Renováveis current installed turbines plus contracted ones until 2010.
EDP Renováveis has been securing its wind turbines by establishing long-term flexible agreements with several major turbine vendors. Framework agreements enabled EDP Renováveis to have turbines available when required, but in the current context, they could prevent the company from capturing a drop in turbine prices, if this occurs. For this reason, EDP Renováveis is renegotiating framework agreements as well as negotiating more flexible agreements for future years.
EDP Renováveis mitigates wind turbine performance risk by using a mix of toptien suppliers, which minimises technological risk. Additionally, wind turbine performance risk is reduced by signing strict and thorough O&M contracts with suppliers, usually for a 5-year period. Additionally, technical warranties are signed with the turbine suppliers, in order to guarantee that the performance of the turbine will be optimal. The availability and the power curve of each turbine is adequately guaranteed with "liquidated damages" clauses that establish penalties to be paid by the supplier when the minimum availability is not met (usually 95 or 97%) or the power curve is not reached. Finally, wind turbine performance risk is also mitigated with an adequate preventive and scheduled maintenance.
The Audit and Control Committee is responsible for proposing to the Board of Directors for submission to the General Meeting the appointment of the Company auditors and the terms of their contracts, scope of their duties and revocation and renewal of their contracts.
The Audit and Control Committee remains in contact with the auditors on matters that may pose a risk to their independence and any other matters related to the auditing of accounts. It also receives and stores information on any other matters provided for in legislation on audits and in auditing standards in effect at any time.
The auditor appointed by EDP Renováveis at the moment is KPMG Auditores S.L.
The Audit and Control Committee assessed the performance of the external auditor in providing the services hired by the Company and made a positive evaluation of their quality, considering that they meet applicable standards and that it is advisable to maintain the same auditor.
The work of the external auditor, including reports and audits of its accounts, was supervised and evaluated in accordance with applicable rules and standards, in particular international auditing standards.
In spite of the fact that EDP Renováveis was recently admitted to trading on the Eurolist by Euronext Lisbon, it has sought to introduce measures to ensure its good governance and that of its companies, including the prevention of improper practices, especially in the fields of accounting and finance.
The Board of Directors of EDP Renováveis therefore decided to provide its employees with a direct, confidential communication channel for them to report any presumed unlawful practices or alleged accounting or financial irregularities occurring in their company. These communications go to the Audit and Control Committee.
EDP Renováveis creation of this channel for whistle-blowing on irregularities in financial and accounting practices is essentially intended:
Contact with the Company's Audit and Control Committee is only possible by email and post, and access to information received is restricted.
Any complaint addressed to the Audit and Control Committee will be kept strictly confidential and the whistle-blower will remain anonymous, provided that this does not prevent the investigation of the complaint. S/he will be assured that the Company will not take any retaliatory or disciplinary action as a result of exercising his/her right to blow the whistle on irregularities, provide information or assist in an investigation.
4.1. Description and competences of the General Meeting of Shareholders
The General Meeting of Shareholders is the Company's highest governing body and is a meeting of shareholders that, when properly convened, has the power to deliberate and adopt, by majority, decisions on matters that the law and Articles of Association reserve for its decision and are submitted for its approval. In particular, it is responsible for:
The decisions of the General Meeting are binding on all shareholders, including those voting against and those who did not participate in the meeting.
A General Meeting may be ordinary or extraordinary. In either case, it is governed by the law and Articles of Association.
All shareholders, irrespective of the number of shares that they own, may attend a General Meeting and take part in its deliberations with right to speak and vote.
In order to exercise their right to attend, shareholders must have their shares registered in their name in the Book Entry Account at least five (5) days in advance of the date of the General Meeting. EDP Renováveis therefore does not even establish the need to block shares as a requirement for shareholders to participate in the General Meeting.
Moreover, although there is no express provision on the matter in the Articles of Association, in the event of the suspension of a General Meeting, EDP Renováveis plans to adopt Recommendation I.2.2 of the Corporate Governance Code and not require the blocking of shares more than five days in advance.
Any shareholder with the right to attend may send a representative to a General Meeting, even if this person is not a shareholder. Power of attorney is revocable. The Board of Directors may require shareholders' power of attorney to be in the Company's possession at least two (2) days in advance, indicating the name of the representative.
Power of attorney shall be specific to each General Meeting, in writing or by remote means of communication, such as post.
Each share entitles its holder to one vote.
Shares issue withiut this right do not have voting rights, with exception of cases set forth by current legislation.
There is no employee share-owning system at EDP Renováveis and so no relevant control mechanisms
on the exercise of voting rights by employees or their representatives have been set up.
Shareholders may vote on points on the agenda, relating to any matters of the Shareholder's competente, by mail or electronic communication. It is essential for their validity that they be received by the company by midnight of the day before the date scheduled for the first calling to order of the General Meeting.
Votes by mail shall be sent in writing to the place indicated on the invitation to the meeting accompanied by the documentation indicated in the Shareholder's Guide.
In order to vote by electronic communication, shareholders must express this intention to the Chairperson of the General Meeting of the in the form indicated in the invitation to the meeting, sufficient time in advance to permit the vote within the established time limit. They will then receive a letter containing a password for voting by electronic communication within the time limit and in the form established in the call of the General Meeting.
Remote votes can be revoked subsequently by the same means used to cast them within the time limit established for the purpose or by personal attendance at the General Meeting by the shareholder who cast the vote or his/her representative.
The Board of Directors has approved a Shareholder's Guide for the first General Meeting, detailing mail and electronic communication voting forms among other matters. It is at shareholders' disposal on www.edprenovaveis.com.
Both ordinary and extraordinary General Meetings are validly constituted when first called to order if the shareholders present or represented own at least thirty-three percent (33%) of the subscribed capital with voting rights and when called to order a second time if the shareholders present or represented own at least twenty-five (25%) of the subscribed capital with voting rights.
Nonetheless, for ordinary or extraordinary General Meetings to be able to pass valid decisions on the issue of bonds, increases or reductions in share capital, conversion, merger or split of the Company and, in general, any amendments to the Articles of Association, shareholders representing fifty percent (50%) of the subscribed capital with voting rights must be present or represented when the meeting is first called to order and thirty-three percent (33%) of the subscribed capital with voting rights when the meeting is called to order a second time.
An ordinary or extraordinary General Meeting shall adopt its decisions by simple majority of votes of shares with voting rights present or represented. Nonetheless, for the decisions referred to in the previous paragraph, when shareholders representing less than fifty percent (50%) the subscribed capital with voting rights are present or represented, decisions may only be validly adopted with a vote in favour of two-thirds (2/3) of the capital with voting rights present or represented at the meeting.
The Chairperson of the General Meeting is appointed by the meeting itself and must be a person who meets the same requirements of independence as for independent directors. The appointment is for three years and s/he may be re-elected once only.
Since 4 June 2008, the position of Chairperson of the General Meeting has been held by Rui Chancerelle de Machete, whose work address is Luso-American Development Foundation, Rua do Sacramento à Lapa, 21, 1249-090 Lisbon.
In addition to the Chairperson, the Board of the General Meeting is made up of the Chairperson of the Board of Directors, or his replacement, the other directors and the Secretary of the Board of Directors.
The position of Secretary of the General Meeting is occupied by the non-member Secretary of the Board of Directors, Emilio García-Conde Noriega, whose work address is that of the Company.
The Chairperson of the General Meeting of EDP Renováveis has the appropriate human and logistical resources for his needs, considering the economic situation of EDP Renováveis, in that, in addition to the resources from the Company Secretary and the legal support provided for the purpose, the Company hires a specialised entity to collect, process and count votes.
In 2008, the remuneration of the Chairperson of the General Meeting of EDP Renováveis was € 0.
Given that EDP Renováveis has been a listed company since 4 June 2008 with its shares admitted to trading on Eurolist by Euronext Lisbon, shareholders have access to corporate governance information on www.edprenovaveis.com. Extracts of General Meeting minutes and the invitation, agenda, motions submitted to the General Meeting and forms of participation shall be placed at shareholders' disposal five (5) days after they are held. The publishing of the minutes will begin
after the first General Meeting held after the Company's admission to trading.
Given the personal nature of the information involved, the history does not include attendance lists at general meetings, although, in accordance with CMVM Circular no. 156/EMIT/DMEI/2009/515, when General Meetings are held, EDP Renováveis plans to replace them by statistical information indicating the number of shareholders present and distinguishing between the number of physical presences by mail.
EDP Renováveis considers that materially relevant information to investors does not include all the content of the minutes. Indeed, their publication in full could be used for purposes unrelated to the interest of the company, shareholders, investors and the market in general.
EDP Renováveis therefore publishes on its website an extract of the minutes of General Meetings with all information on the constitution of the General Meeting and decisions made by it, including motions submitted and any explanations of votes.
The website also provides EDP Renováveis shareholders with information on: i) requirements for participating in the General Meeting, ii) mail and electronic communication votes iii) information available at the registered office.
The Company has taken no defensive measures that might seriously affect its assets in any of the cases of a change in control in its shareholder structure or the Board of Directors.
The Articles of Association contain no limitations on the transferability of shares or voting rights in any type of decision and no limitations on membership of the governing bodies of EDP Renováveis. Neither are there any decisions that come into effect as a result of a takeover bid.
The fact that the Company has not adopted any measures designed to prevent successful takeover bids is therefore in line with Recommendation I.6.1 of the CMVM Code of Corporate Governance.
On the other hand, EDP Renováveis has not entered into any agreements (current or future) subject to the condition of a change in control of the Company.
Finally, there are no agreements between the Company and members of its Board of Directors or managers providing for compensation in the event of resignation
of discharge of directors or in the event of resignation, dismissal without just cause or cessation of the working relationship following a change in control of the Company.
Pursuant to Article 26 of the Company's Articles of Association, the remuneration of the members of its Board of Directors shall consist of a fixed amount to be determined by the General Meeting for the whole Board and expenses for attending Board meetings.
The above article also establishes the possibility of the directors being remunerated with Company shares, share options or other securities granting the right to obtain shares, or by means of share-indexed remuneration systems. In any case, the system chosen must be approved by the General Meeting and comply with current legal provisions.
The Appointments and Remunerations Committee is responsible for proposing to the Board of Directors, albeit not bindingly, the system, distribution and amount of remuneration of the directors on the basis of the overall amount of remuneration authorised by the General Meeting. It also may propose to the Board the terms of contracts with the directors. The distribution and exact amount paid to each director and the frequency and other details of the remuneration shall be determined by the Board on the basis of a proposal from the Appointments and Remunerations Committee.
The maximum remuneration approved by the General Meeting of Shareholders for 2008 for all the members of the Board of Directors is € 2,500,000.
Although remuneration for all the members of the Board of Directors is provided for, the members of the Executive Committee, with the exception of the CEO (who devotes most of his/her work to the activity of EDP Renováveis) are not remunerated and so in 2008 the remuneration paid by EDP Renováveis to these directors was zero.
This corporate governance practice for remuneration is in line with the model adopted by the EDP Group, in which executive directors of EDP do not receive any remuneration directly from the group companies on whose governing bodies they serve, but rather through EDP.
Nonetheless, in line with the above corporate governance practice, EDP Renováveis has signed an Executive Management Services Agreement with EDP, under which the Company bears a cost for the provision of said services corresponding to the remuneration defined for the executive members of the Board of Directors.
The fees in the management service contract are divided into a fixed and a variable part. The variable part is divided into an annual and a multi-annual component, each of which is calculated on the basis of shareholders' return, ability to create value, increases in installed capacity (MW), growth in net profits and EBITDA.
The remuneration of the CEO has a fixed and a variable part. The variable part is divided into an annual and a multi-annual component, each of which is calculated on the basis of shareholders' return, ability to create value, increases in installed capacity (MW), growth in net profits and EBITDA.
On the other hand, the non-executive directors only receive fixed remuneration, which is calculated on the basis of their work exclusively as directors or their work in this position together with their membership of the Appointments and Remunerations Committee, Related Party Transactions Committee and the Audit and Control Committee.
The remuneration of the members of the Board of Directors for the year ended on 31 December 2008 was as follows:
| Remuneration | Fixed | Variable | Total |
|---|---|---|---|
| CEO* | € 235,200.00 | – € 235,200.00 | |
| Executive directors** | – | – | – |
| Non-executive directors | € 277,083.33 | – € 277,083.33 | |
| Total | € 512,283.33 | – € 512,283.33 |
* The remuneration for 2008 was paid the CEO by EDP on the account of EDP Renováveis, which will reimburse EDP through the management service agreement signed by the parties.
** Even though the Executive Committe has not received any funding from the company, due to the contracts for their directive services provided in the written draft 3.6.2, EDP Renovaveis paid EDP 249.900 Euros for the services provided by the Executive Committee apart from the CEO.
As 2008 was the Company's first full year, only fixed remuneration was paid, while the variable part will be paid in 2009.
The retirement savings plan for the members of the Executive Committee acts as an effective retirement supplement and corresponds to 5% of their annual salary.
The directors do not receive any relevant non-monetary benefits as remuneration.
The Nomination and Remuneration Committee appointed by the Board of Directors is responsible for defining the draft remuneration policy for the members of the Board of Directors. This committee defined the directors' remuneration and sought to ensure that it reflected the performance of all members in each year (variable annual remuneration) and their performance throughout
their terms of office by means of a variable component consistent with the maximisation of the Company's long-term performance (multi-annual variable remuneration). This is intended to ensure alignment of the Board of Directors' behaviour with the shareholders' interests. A statement on remuneration policy will be submitted to the next General Meeting, for appreciation as a separate point on the agenda of a consultative nature. It is currently in force (with no alterations), on the following terms:
Fixed remuneration for the CEO is € 384,000 gross annual salary and will be determined for the remaining members on terms fixed by the EDP Group.
Variable annual remuneration for each Executive Committee member may vary between 0% and 100% of their gross, fixed, annual remuneration. The amount is determined on the basis of the following indicators on each year of their term: relative performance of total shareholder return of EDP Renováveis vs. Eurostoxx Utilities, PSI-20 and Iberdrola Renováveis 2008, real capacity to generate shareholder value at EDP Renováveis, increase in installed capacity (MW), growth in net profits and EDP Renováveis EBITDA in 2008.
Multi-annual variable remuneration for all members of the Executive Committee may total from 0% to 100% of their gross annual remuneration and is based on an accumulated annual evaluation of the directors' performance in achieving economic sustainability for the EDP Renováveis Group. Although this multi-annual remuneration is calculated annually, it only comes into effect at the end of their term of office if at least 90% of the strategic goals have been met. This is assessed on the basis of performance and a comparison with strategic benchmarks. In fact, the factors used to calculate the remuneration component are the relative performance of the EDP Renováveis Group's market capitalisation vs. Eurostoxx Utilities and PSI-20 during the term, the EDP Renováveis Group's capacity to create value, the performance of the Sustainability Index applied to EDP Renováveis (DJSI method), the EDP Renováveis Group's image in the national and international markets, its capacity to change and adapt to new market requirements, fulfilment of strategic national and international targets and the EDP Renováveis Group's EBITDA vs. Eurostoxx Utilities during their term.
The time period considered for determining the multi-annual variable component of their remuneration (3 years), the use of qualitative criteria aimed at a strategic, medium-term perspective in the Company's development, the existence of a cap on variable remuneration and the relative weight of this component on total remuneration are decisive factors in fostering management performance that does not focus only on short-term objectives but
includes the medium and long term interests of the Company and its shareholders.
The retirement savings plan for the members of the Executive Committee acts as an effective retirement supplement and corresponds to 5% of their annual salary.
The directors do not receive any substantial non-monetary benefits as remuneration.
The Board of Directors is responsible for fixing managers' remuneration policy (as understood in Article 248-B(3) of the Securities Code) who do not belong to the governing or supervisory bodies.
The Board will therefore submit the managers' remuneration policy to the next General Meeting for appreciation. It is based on the following factors:
The General Meeting is responsible for appointing the Board of Directors, which appoints the Nomination and Remuneration Committee, which is responsible for submitting the statement on remuneration policy for the Company's corporate bodies.
The General Meeting's duties include appreciating the above statement.
Pursuant to Article 95 of the Public Company Law, the General Meeting is also required to evaluate the performance of the corporate public bodies and make an annual decision as whether to maintain confidence in their members.
All the members of the Appointments and Remuneration Committee will be present or represented at the first General Meeting of Shareholders of EDP Renováveis.
5.7. Proposal on the approval of plans on share remuneration and/or share purchase options or on the basis of share price fluctuations
The Company has not approved any plans for share remuneration or share purchase options or plans based on share price fluctuations.
For the year ended on 31 December 2008, the fees paid to KPMG Auditores, S.L. for auditing of the annual accounts, guarantee and reliability services, tax advisory and other services unrelated to audits are as follows:
| EDP Renováveis Group Euros |
|||||
|---|---|---|---|---|---|
| Country | Portugal | España EDPR NA | Otros | Total | |
| Auditing of accounts | 85,000 | 636,000 | 562,116 | 123,550 | 1,406,666 |
| Reliability guarantee services |
343,845 | 328,930 | 410,772 | 11,400 | 1,094,947 |
| Tax consultancy services |
7,470 | 120,000 | 687,360 | 40,840 | 855,670 |
| Legal auditing of accounts |
– | 46,400 | – | – | 46,400 |
| TOTAL | 436,315 1,131,330 1,660,248 | 175,790 3.403,683 |
The accounts audit services are those necessary for the issue of a legal opinion on the annual individual and consolidated accounts of the company and its subsidiaries in Spain and abroad.
On 15 May 2008, EDP announced approval by the Portuguese Stock Exchange Commission of the Prospectus for the inicial public offering (IPO) and admission to trading of EDP Renováveis shares on Eurolist by Euronext Lisbon. The IPO prospectus provided for a combined offering of up to 225,427,952 shares, representing up to 25% of EDP Renováveis share capital after a share capital increase (including the 29,403,646 in the subscription option of a supplementary batch of shares, which was not exercised) aimed at retail and institutional investors. The price interval for subscription of the shares in the PO was between € 7.40 and € 8.90 per share. On 2 June 2008, a final price of € 8.00 was announced, below the average value of the interval.
The following shares were placed at a special regulated market session for the EDP Renováveis IPO:
The quantity intended for the initial public offering was divided into three trenches: Segment A –EDP Group employees, Segment B – EDP shareholders and Segment C – the general public. EDP employees were given a 5% discount in the price fixed for EDP shareholders and the general public, i.e. they bought shares at € 7.60.
| EDP Renováveis, S.A. | |
|---|---|
| Shares | |
| Share Capital | € 4,361,540,810 |
| Face value | € 5.00 |
| No. of shares | 872,308,162 |
| Trading began | 4 June 2008 |
| Euronext Lisboa | |
| Reuters RIC | EDPR.LS |
| Bloomberg | EDPR.PL |
| ISIN | ES0127797019 |
In a year marked by a serious financial crisis, from the time they were admitted to trading on 4 June 2008, EDP Renováveis shares fell 37% and closed the year at € 5.00 each. In the same period, the PSI20, Dow Jones Eurostoxx Utilities and Euronext 100 fell by 40%, 33% and 39%, respectively and over the whole year totalled losses of 51%, 38% and 45% each.
During the year, 263,130,606 EDP Renováveis shares, corresponding to a turnover of approximately € 1.646 billion were traded. On average, at Euronext Lisboa, excluding the first day of listing, when almost 50 million shares were traded, EDP Renováveis liquidity was around 1.5 million shares a day. Thanks to the company's high liquidity and market capitalisation, on 1 July 2008, less than a month after it was listed, it was included in the main Portuguese share index, the PSI20.
EDP Renováveis ended the year with a market capitalisation of € 4.4 billion, making it the fourth largest company in the main Portuguese share index.
| EDP Renováveis shares on Euronext Lisboa (euros) | 2008 | |
|---|---|---|
| Opening price | 8.00 | |
| Closing price | 5.00 | |
| Highest price | 8.00 | |
| Lowest price | 3.45 | |
| Variation in price and reference indexes | 2008 | since IPO |
| EDP Renováveis shares | -37% | -37% |
| PSI20 | -51% | -40% |
| Dow Jones Eurostoxx Utilities | -38% | -33% |
| Euronext 100 | -45% | -39% |
| Liquidity of EDP Renováveis shares on markets | ||
| Volume on Euronext Lisboa (€ millions) | 1,646.0 | |
| Daily average volume (€ millions) | 11.0 | |
| Number of shares traded | 215,951,049 | |
| Average number of shares traded (1) | 1,459,129 | |
| Total number of shares issued | 872,308,162 | |
| Number of own shares | 0 | |
| Market values of EDP Renováveis (€ millions) | ||
| Market capitalisation at end of period | € 4,364 |
(1) excluding first day of trading
The graph below shows the evolution in EDP Renováveis share prices over the year and all announcements and relevant events that may had an impact on them.
| Date | Description | |
|---|---|---|
| 1 | 04 Jun | First day of trading of EDP Renováveis shares |
| 2 | 11 Jun | EDP Renováveis enters the Brazilian market |
| 3 | 07 Jul | EDP Renováveis announces end of share stabilisation period |
| 4 | 21 Jul | EDP Renováveis announces provisional half-year operating data |
| 5 | 29 Jul | EDP Renováveis announces half-year profits |
| 6 | 03 Oct | Approval of one-year extension of PTCs applicable aplicable in the U.S. |
| 7 | 06 Oct | EDP Renováveis provides clarification on call for tenders in Galicia |
| 8 | 17 Oct | EDP Renováveis enters Romanian market |
| 9 | 23 Oct | EDP Renováveis announces provisional operating data for first nine months |
| 10 | 05 Nov | EDP Renováveis announces profits for first nine months |
| 11 | 06 Nov | EDP Group presents 2009-2012 Business Plan |
| 12 | 29 Dec | EDP Renováveis establishes new tax equity agreement for 2008 wind power projects in the U.S. |
| 13 | 31 Dec | EDP Renováveis provides clarification on call for tenders in Galicia |
The distribution of dividends is proposed by the Board of Directors of EDP Renováveis and authorised by decision of the company's General Meeting of Shareholders. As set forth in the Spanish Public Company Law, a dividend declared in each financial year may only be distributed from EDP Renováveis profits for that year or from distributable reserves and this distribution must not cause the assets of EDP Renováveis to fall below the value of the company's share capital.
As of 2011, EDP Renováveis expects to declare and pay dividends representing at least 20% of the profits for the year and to begin to do so for the financial year ending on 31 December 2010. The Board of Directors of EDP Renováveis may, if necessary, adjust this dividend policy in order to reflect changes in business strategy and capital needs, among other aspects. Any future dividends will depend on conditions at the time, including individual and consolidated net profits, earnings, the company's financial situation, availability of legally distributable funds and future prospects. As a result, no guarantee can be given that dividends will be proposed and declared in any particular year. Any dividends paid in the future may be subject to withholding of tax at source.
The provision to actual and potential investors of information about the Company is a structural aspect of EDP Renováveis policy and action as a listed company. The promotion of transparent, easily accessible, high-quality information is of fundamental importance to an accurate perception of the company's strategy, financial situation, accounts, assets and significant events.
EDP Renováveis therefore seeks to provide investors with information that will help them make informed, clear, concrete investment (or disinvestment) decisions.
This Company positioning is demonstrated by the relative frequency with which it publishes privileged information on significant events in its activities each year.
The periodic publication of information on the company, such as the quarterly announcement of profits, as required by law, is an important feature of the company's relationship with the market when it comes to the duty to inform.
EDP Renováveis considers its website a fundamental vehicle for circulating information and uses it to ensure that up-to-date information on its activities and results is always available.
EDP Renováveis therefore wishes to maintain a close, ongoing, transparent relationship with all market agents.
The EDP Renováveis Investor Relations Department (IRD) was set up in 2008 following the initial public offering and acts as an intermediary between the EDP Renováveis management team and a vast universe of shareholders, financial analysts, investors and the market in general. Its main purposes are to guarantee the principle of equality among shareholders, prevent asymmetries in access to information by investors and reduce the gap in the perception of the company's strategy and intrinsic value. This department is responsible for developing and implementing the company's communication strategy and maintaining an appropriate institutional and informative relationship with the financial market, the stock exchange at which EDP Renováveis shares are traded and their regulatory and supervisory bodies (CMVM – Comissão do Mercado de Valores Mobiliários in Portugal and CNMV – Comissión Nacional del Mercado de Valores in Spain)
The company's investors relations representative is Rui Teixeira, a member of the management team. The Investor Relations Department is coordinated by Rui Antunes and is located at the company's Madrid office. Its contact details are as follows
Calle Serrano Galvache, nº 56 Centro Empresarial Parque Norte Edificio Encinca – 4º Piso 28033 Madrid, Spain Telephone: +34 902 830 700 Fax: +34 914 238 410 E-mail: [email protected]
The IRD reports directly to the EDP Renováveis management team through its Chief Financial Officer (CFO) and its main duties are:
Although it was only formally set up after the initial public offering, the work of the Investor Relations Department began with its preparation. The Investor Relations
Department was part of the team that prepared the prospectus of the public offer for subscription and accompanied the Executive Committee on the roadshow to present EDP Renováveis to the world's main financial markets. For more than two weeks, two teams made up of members of the Executive Committee and management team of EDP Renováveis and the Investor Relations Department of EDP Renováveis and EDP visited more than 400 institutional investors in some 20 cities.
In addition to the presentation roadshow, following the initial public offering and after the end of the blackout period, the Investor Relations Department, carried out four roadshows (September, October, November and December) in the world's main financial cities (New York, Boston, San Francisco, London, Lisbon, Paris, Milan, Dublin, Brussels, Amsterdam, Stockholm, Oslo, Zurich, Geneva, etc) and several conferences, many devoted only to energy companies. It met with around 200 institutional investors in this period.
The Investor Relations Department also remained in permanent contact with the financial analysts who evaluate the company and with all shareholders and investors by mail, phone or face-to-face meetings. Every quarter, when the profits for the period are disclosed, the Investor Relations Department organises a conference call for all interested parties involving one or more members of the company's management team, in which it announces developments in EDP Renováveis activities and updates future prospects in the different business areas.
As required by CMVM regulations, EDP Renováveis provides all legal and corporate governance information on its website (www.edprenovaveis.com). The company website also carries updates on developments in the Group's activity and financial and operational data to ensure that shareholders, financial analysts and others have easy access to information.
This online information includes reports on accounts, announcements of relevant events, the articles of association, internal regulations of corporate bodies, the Group's shareholder structure, preparatory documentation for each General Meeting, fluctuations in EDP Renováveis share prices and other information of potential interest on the Group.
This information also includes data on the company, such as its name, status as a listed company, registered office, articles of association, regulations governing the management and supervisory bodies, names of the members of the corporate bodies and the market relations representative and the report on the Audit Committee's work. Contact details for the Investor Relations Department, its functions, financial statements and a calendar of company events are also available.
EDP Renováveis posts on its website invitations to the General Meeting and proposals for discussion and voting at the meeting.
EDP Renováveis also publishes online the annual report on the work of the Audit Committee.
The table below summarises the information posted on the website and in which languages used.
| Portuguese | English | Spanish | |
|---|---|---|---|
| Identification of the company | | | |
| Financial statements | | | |
| Regulations of the management and supervisory bodies |
| | |
| Annual report on the work of the Audit Committee |
| | |
| Investor Relations Department – functions and contact details |
| | |
| Articles of association | | | |
| Calendar of company events | | | |
| Invitation to General Meeting | | | |
| Proposals submitted for discussion and voting at General Meetings |
| | |
| Name | Positions |
|---|---|
| António Mexia | CEO of Galp Energia Chairperson of the Board of Petrogal Chairperson of the Board of Gás de Portugal Chairperson of the Board of Trangas Chairperson of the Board of Trangas-Atlântico CEO of EDP – Energias de Portugal, S.A. |
| Ana Maria Fernandes | Chairperson and CEO of Galp Power Member of the Board of Directors of Galp Energia Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| António Martins da Costa | CEO and Vice-Chairperson of EDP – Energias do Brasil, S.A. CEO and Chairperson of Horizon Wind Energy LLC Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| Nuno Alves | Director of the Foreign Exchange and Capital Division of Millennium BCP Investimento Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| João Manso Neto | Chairperson of the Executive Committee of EDP Produção CEO and Vice-Chairperson of Hidroeléctrica del Cantábrico, S.A. Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| José Silva Lopes | Chairperson of the Board of Directors of Montepio Geral |
| António Nogueira Leite | Board member of Instituto Português de Relações Internacionais, UNL Director of Reditus, SGPS, S.A. Managing Director of José de Mello, SGPS, S.A. Director of Companhia União Fabril CUF, SGPS, S.A. Director of Quimigal, S.A. Director of CUF – Químicos Industriais,SA Director of ADP, S.A.-CUF Adubos Director of Sociedades de Explosivos Civic, SEC, S.A. Director of Brisa, S.A. Director of Efacec Capital, SGPS, S.A. Director of Comitur, SGPS, S.A. Director of Comitur Imobiliária, S.A. Director of Expocomitur-Promoções e Gestão Imobiliária, S.A. Director of Herdade do Vale da Fonte-Sociedade Agrícola, Turística e Imobiliária, S.A. Director of Sociedade Imobiliária e Turística do Cojo, S.A. Director of Sociedade Imobiliária da Rua das Flores, nº 59, S.A. Director of José de Mello Saúde, SGPS, S.A. Vice-Chairperson of the Advisory Board of Banif Banco de Investimentos Chairperson of the General Supervisory Board of Opex, S.A. Member of the Advisory Board of IGCP Vice-Chairperson of Fórum para a Competitividade |
| Rafael Caldeira Valverde | Vice-Chairperson of the Board of Directors of Banco Espírito Santo de Investimento, S.A. Member of the Executive Committee of Banco Espírito Santo de Investimento, S.A. |
|---|---|
| José Araújo e Silva | Director of Corticeira Amorin, SGPS, S.A. Member of the Executive Committee of Corticeira, SGPS, S.A. Member of the Board of Directors of Caixa Geral de Depósitos |
| Manuel Menéndez Menéndez | Member of the Board of Directors of EDP – Energias de Portugal, S.A. Chairperson of Cajastur Chairperson of Hidroeléctrica del Cantábrico, S.A. Chairperson of Naturgas Energia, S.A. Member of the Board of Directors of Nuevas Energias de Occidente, SL Representative of Peña Rueda, SL on the Board of Enagas, S.A. Member of the Board of Confederación Española de Cajas de Ahorro Member Board of Directors of UNESA |
| Jorge Santos | Full Professor of Economics at Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa Coordinator of the PhD course in Economics at ISEG Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa |
| Francisco José Queiroz de Barros de Lacerda |
Member of the Board of Império Insurance Company Member of the Supervisory Board of Millennium Bank in Poland Member of the Senior Board of Millennium Bank in Greece Vice-Chairperson of the Board of Directors of Millennium Bank in Turkey Chairperson of the Board of Directors of Millennium Bank in Romania Member of the Board of Directors of Millennium bcp Investimentos Member of the Board of Directors of Fundação Millenniumbcp . Director of Millennium bcp Member of the Board of Directors of Banco Comercial Português, S.A. Member of the General Board of Clube Naval de Cascais Chairperson of the Audit Committee of Dragopor – Associação Portuguesa da Classe Internacional Dragão Member of the Board of Mague-SPGS, S.A. |
| João Manuel de Mello Franco | Vice-Chairperson of José de Mello Imobiliária, S.A. Chairperson of the Board of Directors of Imopolis, S.A. Chairperson of the Board of Directors of José de Mello Residenciais & Serviços, S.A. Chairperson of the Board of Directors of Engimais, S.A. Director of Portugal Telecom SGPS, S.A. Chairperson of the Audit Committee of Portugal Telecom SGPS, S.A. Member of the Remuneration Committee of Portugal Telecom SGPS, S.A. Chairperson of the Corporate Governance Committee of Portugal Telecom SGPS, S.A. |
| João Lopes Raimundo | Chairperson of the Board of Directors of Banque BCP (Luxembourg) | |||||||
|---|---|---|---|---|---|---|---|---|
| Chairperson of the Board of Directors of Banque BCP (France) | ||||||||
| Member of the Board of Banque Orive BCP (Switzerland) | ||||||||
| Managing Director of Banco Comercial Português | ||||||||
| Vice-Chairperson of the Board of Millennium Angola | ||||||||
| Member of the Board de Directors of Banco Millennium BCP de Investimento | ||||||||
| Daniel M. Kammen | Founding Director of the Renewable and Appropiate Energy Laboratory (RAEL) of University of California, Berkeley | |||||||
| Lecturer in Nuclear Energy at University of California, Berkeley | ||||||||
| Lecturer in the Energy and Resources Group at University of California, Berkeley | ||||||||
| Lecturer in public policy at the Goldman School of Public Policy, University of California, Berkeley | ||||||||
| Class of 1935 Distinguished Chair in Energy | ||||||||
| Codirector of the Berkeley Institute of the Environment | ||||||||
| Member of the Executive Committee of the Energy Biosciences Institute | ||||||||
| Name | Positions |
|---|---|
| António Mexia | N/A |
| Ana Maria Fernandes | N/A |
| António Martins da Costa | N/A |
| Nuno Alves | N/A |
| João Manso Neto | N/A |
| José Silva Lopes | Chairperson of the Board of Directors of Montepio Geral |
| António Nogueira Leite | Member of the Board of Instituto Português de Relações Internacionais, UNL |
| Director of Reditus, SGPS, S.A. | |
| Managing Director of José de Mello, SGPS, S.A. | |
| Director of Companhia União Fabril CUF, SGPS, S.A. | |
| Director of CUF – Químicos Industriais,SA | |
| Director of ADP, S.A. – CUF Adubos | |
| Director of Brisa, S.A. | |
| Director of Efacec Capital, SGPS, S.A. | |
| Director of Comitur, SGPS, S.A. | |
| Director of Comitur Imobiliária, S.A. | |
| Director of Expocomitur-Promoções e Gestão Imobiliária, S.A. | |
| Director of Herdade do Vale da Fonte-Sociedade Agrícola, Turística e Imobiliária, S.A. | |
| Director of Sociedade Imobiliária e Turística do Cojo, S.A. | |
| Director of Sociedade Imobiliária da Rua das Flores, nº 59, S.A. | |
| Director of José de Mello Saúde, SGPS, S.A. | |
| Vice-Chairperson of the Advisory Board of Banif Banco de Investimentos | |
| Chairperson of the General Supervisory Board of Opex, S.A. | |
| Member of the Advisory Board of IGCP | |
| Rafael Caldeira Valverde | Vice-Chairperson of the Board of Directors of Banco Espírito Santo de Investimento, S.A. |
| Member of the Executive Committee of Banco Espírito Santo de Investimento, S.A. | |
| José Araújo e Silva | Member of the Board of Directors of Caixa Geral de Depósitos |
| Manuel Menéndez Menéndez | Chairperson of Cajastur |
| Member of the Board of Confederación Española de Cajas de Ahorro | |
| Representative of Peña Rueda, SL on the board of Enagas, S.A. | |
| Member of the Board of Directors of UNESA |
| Jorge Santos | Full Professor of Economics at Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa Coordinator of the PhD course in Economics at ISEG Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa |
|---|---|
| Francisco José Queiroz de Barros de Lacerda |
Member of the General Board of Clube Naval de Cascais Chairperson of the Audit Committee of Dragopor – Associação Portuguesa da Classe Internacional Dragão Member of the Board of Mague-SPGS, S.A. |
| João Manuel de Mello Franco | Director of Portugal Telecom SGPS, S.A. Chairperson of the Audit Committee of Portugal Telecom SGPS, S.A. Member of the Remuneration Committee of Portugal Telecom SGPS, S.A. Chairperson of the Corporate Governance Committee of Portugal Telecom SGPS, S.A. |
| João Lopes Raimundo | Vice-Chairperson of the Board of Millennium Angola Member of the Board de Directors of Banco Millennium BCP de Investimento |
| Daniel M. Kammen | Founding Director of the Renewable and Appropiate Energy Laboratory (RAEL) of University of California, Berkeley Lecturer in Nuclear Energy at University of California, Berkeley Lecturer in the Energy and Resources Group at University of California, Berkeley Lecturer in public policy at the Goldman School of Public Policy, University of California, Berkeley Class of 1935 Distinguished Chair in Energy Codirector of the Berkeley Institute of the Environment Member of the Executive Committee of the Energy Biosciences Institute |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| EDP – Energias de Portugal, S.A. | Chairperson of the Executive Board of Directors |
Director | Director | Director | Director | |
| EDP – Gestão da Produção de Energia, S.A. |
Chairperson of the Board of Directors |
|||||
| EDP – Energias do Brasil, S.A. | Chairperson of the Board of Directors |
Director | Director | |||
| EDP Comercial – Comercialização de Energia, S.A. |
||||||
| EDP – Estudos e Consultoria, S.A. | Chairperson of the Board of Directors |
|||||
| EDP – Soluções Comerciais, S.A. | ||||||
| EDP – Imobiliária e Participações, S.A. |
Chairperson of the Board of Directors |
|||||
| EDP Serviner – Serviços de Energia, S.A. |
||||||
| EDP Valor – Gestão Integrada de Serviços, S.A. |
Chairperson of the Board of Directors |
|||||
| Sãvida – Medicina Apoiada, S.A. | Chairperson of the Board of Directors |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| SCS – Serviços Complementares de Saúde, S.A. |
Chairperson of the Board of Directors |
|||||
| Energia RE – Sociedade Cativa de Resseguro |
Chairperson of the Board of Directors |
|||||
| Enernova – Novas Energias, S.A. | ||||||
| Hidroeléctrica del Cantábrico, S.A. |
Director | Director | Vice-Chairperson of the Board of Directors |
Chairperson of the Board of Directors |
||
| Naturgás Energia, S.A. | 2nd vice-chairperson |
Chairperson of the Board of Directors |
||||
| Desarrolos Eólicos S.A. | Vice-chairperson of the Board of Directors |
|||||
| Genesa S.L. | Chairperson of the Board of Directors |
|||||
| EDP Investimentos, SGPS, S.A. | Chairperson of the Board of Directors |
|||||
| EDP Gás III, SGPS, S.A. | Chairperson of the Board of Directors |
|||||
| EDP Gás II, SGPS, S.A. (ex-NQF Gás) |
Chairperson of the Board of Directors |
|||||
| EDP Gás – SGPS, S.A. | Chairperson of the Board of Directors |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| Portgás – Sociedade de Produção e Distribuição de Gás, S.A. |
||||||
| Setgás – Sociedade de Produção e Distribuição de Gás, S.A. |
||||||
| Enagas, SGPS, S.A. | Chairperson of the Board of Directors |
|||||
| EDP Powerline | ||||||
| EDP Internacional, S.A. | Chairperson of the Board of Directors |
|||||
| Horizon Wind Energy LLC | Director | Chairperson of the Board of Directors |
Director | |||
| Nuevas Energias de Occidente, S.L. |
Chairperson of the Board of Directors |
Director | ||||
| Balwerk - Consultadoria Económica e Participações, Sociedade Unipessoal, Lda. |
Manager | |||||
| EDP – Investimentos, Gestão de Participações e Assistência Técnica, Lda. |
Director | |||||
| MRH Mudança e Recursos Humanos, S.A. |
Chairperson of the Board of Directors |
|||||
| EDP Energias de Portugal, Sucursal en España, Sociedad Anonima |
Permanent representative |
Permanent representative |
Permanent representative |
Permanent representative |
Permanent representative |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| EDP Gás.com - Comércio de Gás Natural, S.A. |
Director | |||||
| EDP Finance BV | Representative | Representative | Representative | Representative | Representative | |
| Electricidade de Portugal Finance Company Ireland Lt. |
Director | |||||
| ENEOP – Eólicas de Portugal, S.A. |
Chairperson of the Board of Directors |
ANNUAL REPORT 2008 CORPORATE GOVERNANCE REPORT
Born in 1958. From 1979 to 1981, he held the position of assistant lecturer in the Department of Economics at the Université Genève (Switzerland), and from 1985 to 1989, he held the position of postgraduate lecturer in European Studies at Universidade Católica (Lisbon). From 1989 to 1991, he served as Assistant to the Secretary of State for Foreign Trade, and between 1991 and 1992, he served as vice-chairman of the Board of Directors of ICEP (the Portuguese Institute for Foreign Trade). Between 1992 and 1998, he served as a Director of Banco Espírito Santo de Investimentos, and in 1998 he was appointed as Chief Executive Officer of Gás de Portugal and Transgás, a position he held until 2000. From 2000 to 2001, he served as Vice-Chairman of the Board of Directors of Galp Energia, and from 2001 to 2004, he held the positions of Chief Executive Officer of Galp Energia and Chairman of the Board of Directors of Petrogal, Gás de Portugal, Transgás and Transgás-Atlântico. In 2004 he was appointed as Minister of Public Works, Transport and Communication by the Portuguese government. He was appointed Chief Executive Officer of EDP in March 2006.
He served as Chairman of the Portuguese Energy Association (APE) from 1999 to 2002, a member of the Trilateral Commission (1992-1998), vice-president of the Portuguese Industrial Association (AIP), Chairman of the General Supervisory Board of Ambelis and as a representative of the Portuguese government before the EU in the working group for the development of the pan-European networks.
He holds a degree in Economics from the Université Genève in Switzerland.
She began her professional career in the area of capital markets, investments and restructuring of companies in 1986, at Conselho – Gestão e Investimentos, a company in the Banco Português do Atlantico group. Between 1989 and 1991, she was a lecturer at the University of Oporto. Also in 1989, she worked in the Corporate Finance Arm of Sociedade de Investimentos EFISA, becoming a Director of Banco EFISA. In 1992, she moved to the Banco de Fomento e Exterior group as Director of several of the investment bank subsidiaries of the group. In addition, between 1996 to 1998, she was Corporate Finance Manager of BPI. From 1998 to 2005, she then moved to holding various positions within the GALP group, including Chairman and Chief Executive Officer of GALP Power between 2002 and 2005, and from 2004 to 2005, was also a member of the Board of Directors of GALP Energia. In 2006, she was appointed a member of the Board of Directors of EDP.
She holds a degree in Economics and a post-graduate degree in Finance, both from the University of Oporto, as well as a master of Business Administration degree from the Management School of Oporto.
Born in 1954. From 1976 to 1989, he held the position of Lecturer at the Superior Engineering Institute of Porto. In 1981 he joined EDP to work in the hydro-power generation sector, a position he held until 1989. From 1989 to 2003, he held various positions in the Banco Comercial Português group, namely as an executive member of the Board of Directors of its insurance companies and asset management operations, as well as being a General Manager of the bank. Between 1999 and 2003, he served as Deputy Chief Executive Officer and Vice-President of the Board of Directors of PZU (Poland). In 2003 he rejoined EDP as a general manager and was appointed as Chief Executive Officer and Vice-Chairman of the Board of Directors of EDP – Energias do Brasil, a position he held until being appointed as Chief Executive Officer and Chairman of the Board of Directors of Horizon in July 2007, a position he still holds. In March 2006, he was appointed as a member of the Executive Committee of EDP's Board of Directors. He holds a degree in Civil Engineering and a master of Business Administration degree from the University of Oporto, has completed executive education studies at INSEAD (Fontainebleau) and AESE (University of Navarra), and has completed the Advanced Management Programme at the Wharton School (University of Pennsylvania).
Born in 1958. From 1988 to 2006, he held various positions at Banco Comercial Português, including: Technician in the Studies and Planning Director (1988-1990), sub-Director of the Financial Investment Director (1990-1991), Director of Investor Relations (1991- 1995), Director of Private Retail Coordination (1995-2000), Director of Capital Markets for Banco CISF, Banco de Investimento do Banco Comercial Português (1996-1997). From 1999 to 2000, he served as Chairman of the Board of Directors of CISF Dealer, and in 2001 he was appointed as a Director of the money and capital markets division of Banco Millennium BCP Investimento (formerly Banco CISF). In 2006 he left Banco Millennium BCP Investimento to become the Chief Financial Officer of EDP, a position he still holds.
He holds a degree in Naval Architecture and Engineering and a master of Business Administration degree, both from the University of Michigan.
Born in 1958. From 1981 to September 2002, he held various positions within the BCP Group, including General Finance Manager and General Manager of the Treasury, Capital Markets and Large Corporate Clients Divisions, as well as Director of Big Bank Gdansk, Poland, and Banco Millennium BCP Investimento. Between September 2002 and July 2003, he also performed management functions within the BPN group. In 2003 he joined EDP as General Manager, a position he held until 2006, when he became a member of the Board of Directors of EDP. He is currently President of the Executive Committee of EDP Produção and the Chief Executive Officer of Hidrocantábrico. On the EDP Group level, he is responsible for generation and trading, regulation, power planning, and the day-to-day running of Hidrocantábrico.
He holds a degree in Economics from the Instituto Superior de Economia e Gestão de Lisboa, a postgraduate degree in European Economy from the Universidade Católica de Lisboa and the academic component of a master's degree in Economics from the Universidade Nova de Lisboa.
Born in 1932. From 1969 to 1974, he was a member of the Board of Caixa Geral de Depósitos and Director of the Cabinet of Studies and Planning of the Ministry of Finance. In 1972, he held the position of Deputy Chief of negotiations for the free market agreement of the EC. Between 1974 and 1978, he was Minister of Finance, additionally holding the position of External Markets Minister between 1974 to 1975. Between 1975 and 1980, he held the position of Governor of the Bank of Portugal. Since January 2004, he has been Chairman of the Board of Directors of Montepio Geral.
In 2003, he was awarded the Order of Grã Cruz by the President of Portugal for his 48 years of service as an economist predominantly for the Portuguese state. In 2004, he was awarded a degree of "Doutor Honoris Causa" by Instituto Superior de Economia e Gestão. He also has a degree in Finance from the Instituto Superior de Ciências Educativas de Felgueiras.
Born in 1962. Between 1988 and 1996, he held the position of Consultant to several national and international institutions, including the Bank of Portugal, the OECD and the EC. Between 1995 and 1998, he was General Secretary of APRITEL, and between 2000 and 2002 was a member of the Board of Directors of APRITEL. From 1997 to 1999, he was a Director of Soporcel, S.A., between 1998 and 1999, he was a Director of Papercel, S.A., and in 1999, was a director of MC Corretagem, S.A. Also in 1999, he was appointed Chairman of the Board of Directors of Bolsa de Valores de Lisboa and became a member of the Executive Committee of Associação de Bolsas Ibero-Americanas. Since 2000, Mr. Nogueira Leite has been a member of the Consultative Council of Associação Portuguesa para o Desenvolvimento das Comunicações. Between 2000 and 2002, he was a Consultant for Vodafone – Telecomunicações Pessoais, S.A., between 2001 and 2002, he was a Consultant of GE Capital, and in 2002 was a member of the Consultant Council of IGCP. Since 2002, he has held various positions within the José de Mello group and has held directorships with numerous other entities including Reditus, SGPS, S.A., Quimigal, S.A, Brisa, S.A., ADP, S.A., Comitur, SGPS, S.A., Comitur Imobiliária, S.A., Expocomitur – Promoções e Gestão Imobiliária, S.A., Herdade do Vale da Fonte – Sociedade Agrícola, Turística e Imobiliária, S.A., e SGPS, S.A., Efacec Capital, SGPS, S.A., and Cuf – Químicos Industriais, S.A. He held a further directorship with Sociedade de Explosivos Civis, SEC, S.A. from 2007 to March 2008. Between October 1999 and August 2000, he was Secretary of State for Treasury and Finance and Governor Substitute of the European Bank of Investments. He additionally held positions with the European Bank for Reconstruction and Development, the International Monetary Fund and was a member of the Financial and Economic Council of the European Union. He was Vice-Chairman of the Consultative Council of Banif-Banco de Investimento, S.A., and Chairman of the General and Supervision Council of OPEX, S.A.
He has an undergraduate degree in Economics from the Universidade Católica Portuguesa, a master of science degree in Economics, and a Ph.D. in Economics from the University of Illinois.
Born in 1953. In 1991, he joined Banco Espírito Santo de Investimento, S.A. and was the Director Responsible for Financial Services Management, Client Management, Structured Financing Management, Capital Markets Management, and for the Department for Origination and Information. In March 2005, he was appointed as Vice-Chairman of the Board of Directors of Banco Espírito Santo de Investimento, S.A. and formed part of the Executive Committee of the company.
He has an undergraduate degree in Economics from the Instituto de Economia da Faculdade Técnica de Lisboa.
Born in 1951. He began his professional career as an Assistant Lecturer at Faculdade de Economia do Porto. From 1991 he was invited to be a Lecturer at Universidade Católica do Porto and additionally held a part-time position as Technician for Comissão de Coordenação da Região Norte. He has since held the position of Director of several companies, including of Banco Espírito Santo e Comercial de Lisboa and Soserfin – Sociedade Internacional de Serviços Financeiros – Oporto group. He has been involved in the Finance and Management Coordination of Sonae Investimentos SGPS, was Executive Director of Sonae Participações Financeiras, SGPS, S.A. and was Vice-Chairman of Sonae Indústria, SGPS, S.A. He has additionally held directorships with Tafisa, S.A., Spread
SGPS, S.A. and Corticeira Amorim, SGPS. He presently serves on the Board of Directors of Caixa Geral de Depósitos, S.A. He has an undergraduate degree in Economics from the Faculdade de Economia do Porto and has obtained certificates from Universidade de Paris IX, Dauphine and the Midland Bank International banker's course in London.
Born in 1960. He has been a member of the Board of Directors and a member of the Executive Committee of each of Cajastur and Hidrocantábrico. He has been a member of the Board Directors, Executive Committee and Audit and Control Committee of AIRTEL. He has also been a member of the Board of Directors of LICO Corporación and ENCE, Vice-Chairman of the board of SEDES, S.A. and Executive Chairman of Sociedade de Garantias Recíprocas de Astúrias. Currently, he is Chairman of Cajastur, Hidrocantábrico and Naturgas Energia, a member of the Board of NEO and Confederación Española de Cajas de Ahorros, a member of the Junta Directiva of UNESA and a member of Registro Oficial de Auditores de Cuentas. He also represents Peña Rueda, S.L. (a subsidiary of Cajastur) on the Board of Directors of Enagas.
He has an undergraduate degree in Economics and Company Management and a Ph.D. in Economic Sciences, each from the University of Oviedo. He has been appointed university professor of Company Management and Accounts at the University of Oviedo.
Born in 1951. From 1997 to 1998, he coordinated the Committee for Evaluation of the EC Support Framework II and was a member of the Committee for the Elaboration of the ex-ante EC Support Framework III. From 1998 to 2000, he Chairman of the Unidade de Estudos sobre a Complexidade na Economia and from 1998 to 2002 was Chairman of the Scientific Council of Instituto Superior de Economia e Gestão of the Universidade Técnica de Lisboa. From 2001 to 2002, he coordinated the Committee for the Elaboration of the Strategic Programme of Economic and Social Development for the Peninsula of Setúbal. Since 2007, he has been Coordinator of the masters program in Economics, and since 2008, he has been a member of the Representatives Assembly of Instituto Superior de Economia e Gestão of the Universidade Técnica de Lisboa.
He has an undergraduate degree in Economics from Instituto Superior de Economia, a master degree in Economics from the University of Bristol and a Ph.D. in Economics from the University of Kent. He additionally has a doctorate degree in Economics from the Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa, and has consequently held the positions of Auxiliary Professor and Associate Professor with Universidade Técnica de Lisboa. Hes has been appointed as university professor (catedrático) of Universidade Técnica de Lisboa.
Born in 1960. From 1984 to 1985, he was an Assistant Lecturer at Universidade Católica Portuguesa. Between 1982 and 1990, he held the position of Technician and Director of Locapor (Leasing), CISF and Hispano Americano-Sociedade de Investimentos. Between 1990 and 2000, he joined the Management Team of the José de Mello group as Director of UIF, SGPS. Between 1991 and 2000, he was a Director of Banco Mello, and, from 1993 to 2000, additionally held the position of Chairman of the Executive Committee of Banco Mello. Between 1997 and 2000, he was Vice-Chairman of the Board of Directors of Banco Mello, and since 2000 has been a Director of Insurance Company Império and Chairman or Director of several banks and financial companies of the Banco Mello group. Between 2000 and 2008, he was a member of the Executive Board of Directors of Banco Comercial Português, S.A., and in this capacity was responsible for the activity of the group in investment banking in Europe. He is presently a member of the board of Mague – SPGS, S.A. He has an undergraduate degree in Company Administration and Management from Universidade Católica Portuguesa.
Born in 1946. Between 1986 and 1989, he was a member of the Management Council of Tecnologia das Comunicações, Lda. Between 1989 to 1994, he was Chairman of the Board of Directors of Telefones de Lisboa e Porto, S.A., and between 1993 to 1995 he was Chairman of Associação Portuguesa para o Desenvolvimento das Comunicações. From 1994 to 1995, he was Chairman of the Board of Directors of Companhia Portuguesa Rádio Marconi and additionally was Chairman of the Board of Directors of Companhia Santomense de Telecomunicações e da Guiné Telecom. From 1995 to 1997, he was Vice-Chairman of the Board of Directors and Chairman of the Executive Committee of Lisnave (Estaleiros Navais) S.A. Between 1997 and 2001, he was Chairman of the Board of Directors of Soponata and was a Director and Member of the Audit Committee of International Shipowners Reinsurance, Co S.A. Between 2001 and 2004, he was Vice-Chairman of José de Mello Imobiliária SGPS, S.A., and was Chairman of the Boards of Directors of IMOPÓLIS, S.A., José de Mello Residenciais & Serviços, S.A. and Engimais, S.A. Since 1998, he has been a Director of Portugal Telecom SGPS, S.A., Chairman of the Audit Committee since 2004, and Chairman of the Corporate Governance Committee since 2006. He has an undergraduate degree in Mechanical Engineering from Instituto Superior Técnico. He additionally holds a certificate in Strategic Management and Company Boards and is the holder of a grant of Junta de Energia Nuclear.
Born in 1960. Between 1982 to 1985 he was Senior Auditor of BDO – Binder Dijker Otte Co. Between 1987 to 1990, he was Director of Banco Manufactures Hanover (Portugal), S.A. and between 1990 to 1993 was a member of the Board of TOTTAFactor, S.A. (Grupo Banco Totta e Açores) and Valores Ibéricos, SGPS, S.A. In 1993, he held directorships with Nacional Factoring, da CISF – Imóveis and CISF Equipamentos. Between 1995 and 1997 he was a director of CISF – Banco de Investimento and a member of the Board of Directors of Nacional Factoring. In 1998, he was appointed to the board of several companies, including Leasing Atlântico, Comercial Leasing, Factoring Atlântico, Nacional Leasing and Nacional Factoring. From 1999 to 2000, he was a member of the Board of BCP Leasing, BCP Factoring and Leasefactor SGPS. From 2000 to 2003, he was appointed Chairman of the Board of Directors of Banque BCP (Luxemburg) and Chairman of the Executive Committee of Banque BCP (France). Between 2003 and 2006 he was a member of Management of Banque Prive BCP (Switzerland) and was General Director of private banking of BCP. Since 2006, he has been a member of the Board of Directors of Banco Millennium BCP de Investimento, and General Director of Banco Comercial Português. Mr. Lopes Raimundo is presently Vice-Chairman of the General Board of Millennium Angola.
He has an undergraduate degree in Company Management and Administration from Universidade Católica Portuguesa de Lisboa, and a Master of Business Administration degree from INSEAD.
Born in 1962. Between 1988 and 1991, he was a research fellow in the Division of Engineering and Applied Science and the Division of Biology at the California Institute of Technology and a post-doctorate researcher of Weizmann & Bantrell in the Engineering and Applied Science and Biology Department at California Institute of Technology. Between 1991 and 1993, he was a Research Collaborator for Science and International Affairs at the John F. Kennedy School of Government, Harvard University. Between 1991 and 1993, he was a Research Associate for the Northeast Regional Centre for Global Environmental Change and the Department of Physics, Harvard University. In 1993, he was appointed a permanent fellow at the African Academy of Sciences. Between 1993 and 1999, he was a member of the Research Faculty at the Centre for Energy and Environmental Studies at the School of Engineering and Applied Science at Princeton University. Between 1997 and 1999, he was Class of 1934 Preceptor at the Woodrow Wilson School of Public and International Affairs at Princeton University, and between 1998 to 1999 he was Chair of the Science, Technology and Environmental Policy Program (STEP) of the same institution. Between 1998 and 2001, he was an Associate Professor of the Energy and Resource Group and between 1999 and 2001 was an Associate Professor of Nuclear Engineering at the University of California, Berkeley. In 1999, he was a founding Director of the Renewable and Appropriate Energy Laboratory (RAEL) of the University of California, Berkeley. From 2000 to 2001, he joined the Core Management Team of the Commission of Power of California Public Interest Environmental Research – Environmental Area. Between 2004 and 2009, he was the Director of the University of California, Berkeley, and Industrial Technology Research Institute of Taiwan. In 2005, he was appointed Co-director of the Berkeley Institute of the Environment. In 2006, he was appointed a member of the Energy and Resources Group and in 2007 held the position of Coordinator of the Science and Impact Sector in the Energy Biosciences Institute. In addition, since 2001, he has been a Professor of Public Policy of the Goldman School of Public Policy, University of California, Berkeley. He is also an author of several studies and has received several awards in the Energy sector.
He has an undergraduate degree, a masters degree and a Ph.D. each in Physics.
Born in 1955. In 1981, he joined Soto de Ribera Power Plant, which was owned by a consortium comprising Electra de Viesgo, Iberdrola and Hidrocantábrico, as Legal Counsel. In 1995, he was appointed General Counsel of Soto de Ribera Power Plant, and also Chief of Administration and Human Resources of the consortium. In 1999, he was appointed Legal Counsel at Hidrocantábrico, and in 2003 was appointed General Counsel of Hidrocantábrico and also a member of its Management Committee. He presently serves as General Counsel of the Company, as Secretary of the Board, and is also Director and Secretary of the Boards of Directors of a number of the Company's subsidiaries in Spain.
He holds a masters degree in Law from the University of Oviedo.
| Name | Direct | Indirect | Total |
|---|---|---|---|
| António Luis Guerra Nunes Mexía | 3,880 | 320 | 4,200 |
| Ana Maria Machado Fernandes | 1,510 | 0 | 1,510 |
| João Manuel Manso Neto | 0 | 0 | 0 |
| Nuno Maria Pestana de Almeida Alves | 5,000 | 0 | 5,000 |
| António Fernando Melo Martins da Costa | 1,330 | 150 | 1,480 |
| Francisco José Queiroz de Barros de Lacerda | 310 | 310 | 620 |
| João Manuel de Mello Franco | 380 | 0 | 380 |
| Jorge Manuel Azevedo Henriques dos Santos | 200 | 0 | 200 |
| José Silva Lopes | 760 | 0 | 760 |
| José Fernando Maia de Araújo e Silva | 80 | 0 | 80 |
| Rafael Caldeira de Castel-Branco Valverde | 0 | 0 | 0 |
| António do Pranto Nogueira Leite | 0 | 0 | 0 |
| João José Belard da Fonseca Lopes Raimundo | 170 | 670 | 840 |
| Daniel M. Kammen | 0 | 0 | 0 |
| Manuel Menéndez Menéndez | 0 | 0 | 0 |
ANNUAL REPORT 2008 CORPORATE GOVERNANCE REPORT
EXTRACT OF MINUTES OF GENERAL MEETING
www.edprenovaveis.com
Annual Accounts and Directors' Report
31 December 2008
| Assets | Note | 2008 |
|---|---|---|
| Intangible assets | 5 | 58 |
| Property, plant and equipment | 6 | 238 |
| Non-current investments in group companies and associates Equity instruments Loans to companies |
8 10.a |
6,256,959 3,648,347 2,608,612 |
| Investments | 2 | |
| Trade and other receivables | 16 | 160 |
| Total non-current assets | 6,257,417 | |
| Trade and other receivables Trade receivables from group companies and associates – current Other receivables Public entities, other |
10.c 10.c 10.c |
16,204 1,679 170 14,355 |
| Current investments in group companies and associates Debt securities Derivatives Other financial assets Other investments |
10.a 11 10.a 10.a |
302,355 194,978 1,527 83,025 22,825 |
| Prepayments for current assets | 91 | |
| Cash and cash equivalents Cash |
12 | 16,610 16,610 |
| Total current assets | 335,260 | |
| Total assets | 6,592,677 |
| Equity and Liabilities | Note | 2008 |
|---|---|---|
| Capital and reserves Share capital Share premium Reserves Profit for the year |
4,361,541 1,228,451 (34,526) 74,794 |
|
| Total equity | 13 | 5,630,260 |
| Non-current payables Derivatives Other financial liabilities |
11 15.c |
65,480 65,478 2 |
| Group companies and associates – non-current | 15.a | 862,817 |
| Deferred tax liabilities | 16 | 13,123 |
| Total non-current liabilities | 941,420 | |
| Current payables | 11 | 1,527 |
| Group companies and associates– current | 15.a | 4,813 |
| Trade and other payables Current provisions Suppliers, group companies and associates – non-current Personnel (salaries payable) Public entities, other |
15.c 15.c 15.c 16 |
14,657 8,069 5,307 1,061 220 |
| Total current liabilities | 20,997 | |
| Total equity and liabilities | 6,592,677 |
| Note | 2008 | |
|---|---|---|
| CONTINUING OPERATIONS | ||
| Other operating income | 18.b | 1,679 |
| Non-trading and other administrative income | 1,679 | |
| Personnel expense | (1,723) | |
| Wages and salaries | (1,723) | |
| Employee benefits expense | 19.a | (47) |
| Other operating expenses | (7,205) | |
| External services | (7,205) | |
| Results from operating activities | (7,249) | |
| Finance income | 9 | 127,543 |
| Other investment income | 127,543 | |
| Group companies and associates | 126,936 | |
| Other | 607 | |
| Finance expenses | 14.a | (13,256) |
| Group companies and associates | (13,249) | |
| Other | (7) | |
| Change in fair value of financial instruments | - | |
| Exchange gains | (219) | |
| Net finance income | 114,068 | |
| Profit before income tax | 106,819 | |
| Income tax expense | 16 | (32,025) |
| Profit from continuing operations | 74,794 | |
| DISCONTINUED OPERATIONS | - | |
| Profit for the year | 74,794 | |
| <0} | Note | 2008 |
|---|---|---|
| Profit for the year | 74,794 | |
| Total income and expense recognised directly in equity Equity |
- | |
| Total income and expense recognised in the income statement | - | |
| Total non-financial assets and non-financial liabilities | - | |
| Total recognised income and expense | 74,794 |
| Item | Share capital |
Share premium |
Reserves | Share capital increase costs |
Profit/(Loss) for the year |
Total |
|---|---|---|---|---|---|---|
| Balance at 31 December 2007 |
18,873 | 1,882,338 | - | - | (23,520) | 1,877,691 |
| Adjustments for changes in criteria in 2007 and prior years |
- | - | - | - | 23,564 | 23,564 |
| Adjusted balance at 1 January 2008 |
18,873 | 1,882,338 | - | - | 44 | 1,901,255 |
| Recognised income and expense |
- | - | - | - | 74,794 | 74,794 |
| Operations with equity holders or owners Share capital increases Distribution of profit/(Application of |
4,342,668 | (653,887) | - | (34,570) | - | 3,654,211 |
| loss) for the period Reserves |
- | - | 44 | - | (44) | - |
| Balance at 31 December 2008 |
4,361,541 | 1,228,451 | 44 | (34,570) | 74,794 | 5,630,260 |
| Note | 2008 | |
|---|---|---|
| Cash flows from operating activities | ||
| Profit for the year before tax | 106,819 | |
| Adjustments for: | (114,068) | |
| Finance income | 9 | (127,543) |
| Finance expense | 14 | 13,256 |
| Exchange losses | 219 | |
| Change in operating assets and liabilities | 4,883 | |
| Trade and other receivables | (1,942) | |
| Trade and other payables | 7,365 | |
| Other current liabilities | (540) | |
| Other cash flows from operating activities | 65,494 | |
| Interest paid | (13,318) | |
| Interest received | 111,505 | |
| Income tax paid | (32,693) | |
| Cash flows from operating activities | 63,128 | |
| Cash flows from investing activities | ||
| Payments for investments | (2,453,121) | |
| Intangible assets | 5 | (58) |
| Property, plant and equipment | 6 and 15.c | (43) |
| Other financial assets | (2,453,023) | |
| Other assets | 3 | |
| Cash flows from investing activities | (2,453,121) | |
| Cash flows from financing activities | ||
| Proceeds from and payments for equity instruments | 1,538,958 | |
| Issue of equity instruments | 13 | 1,538,958 |
| Proceeds from and payments for financial liability instruments Issue |
867,630 | |
| Group companies and associates | 1,024,420 | |
| Redemption and repayment of | ||
| Group companies and associates | (156,790) | |
| Cash flows from financing activities | 2,406,588 | |
| Net increase in cash and cash equivalents | 16,595 | |
| Cash and cash equivalents at beginning of year | 15 | |
| Cash and cash equivalents at year end | 12 | 16,610 |
La memoria adjunta forma parte de las cuentas anuales
The figures disclosed in the annual accounts are expressed in thousands of Euros, the Company's functional and presentation currency.
The proposed distribution of 2008 profit to be submitted to the shareholders for approval at their annual general meeting is as follows:
| Thousands | |
|---|---|
| of Euros | |
| Basis of allocation | |
| Profit for the year | 74,794 |
| Distribution | |
| Legal reserve | 7,479 |
| Voluntary reserve | 67,315 |
| Total | 74,794 |
Software maintenance costs are charged as expenses when incurred.
Property, plant and equipment are measured at cost of acquisition. Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment valuation allowances.
As mentioned in note 23 and the first transitional provision of Royal Decree 1514/2007, the Company has opted to measure all equity items on the opening balance sheet in accordance with principles and standards prevailing at 31 December 2007, except for financial instruments which are measured at fair value.
Consequently, the Company has applied the criteria for prospectively measuring financial assets and financial liabilities at amortised cost as of 1 January 2008.
Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument.
The Company classifies financial instruments into different categories based on the nature of the instruments and management's intentions on initial recognition.
A financial asset and a financial liability are offset only when the Company currently has the legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets or financial liabilities held for trading are those which are classified as held for trading from initial recognition.
A financial asset or financial liability is classified as held for trading if it:
Upon initial recognition the Company designates financial assets and financial liabilities at fair value through profit or loss in the income statement only if:
Financial assets and financial liabilities at fair value through profit or loss are measured following the criteria established for financial assets and financial liabilities classified as held for trading.
Loans and receivables comprise trade and non-trade receivables with fixed or determinable payments that are not quoted in an active market other than those classified in other financial asset categories. These assets are recognised initially at fair value, including transaction costs, and are subsequently measured at amortised cost using the effective interest method.
Investments in Group companies are initially recognised at cost, which is equivalent to the fair value of the consideration paid, including transaction costs, and are subsequently measured at cost net of any accumulated impairment losses.
(viii) Interest and dividends
Interest is recognised using the effective interest method.
7
Dividends from investments in equity instruments are recognised when the Company is entitled to receive them. If the dividends are clearly derived from profits generated prior to the acquisition date because amounts higher than the profits generated by the investment since acquisition have been distributed, the carrying amount of the investment is reduced.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
The income tax expense and tax income for the year comprises current tax and deferred tax.
Taxable temporary differences are recognised in all cases except where:
Deductible temporary differences are recognised provided that:
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the years when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted. The tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets or liabilities are also reflected in the measurement of deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised in the balance sheet under noncurrent assets or liabilities, irrespective of the expected date of recovery or settlement.
The Company classifies assets and liabilities in the balance sheet as current and noncurrent. Current assets and liabilities are determined as follows:
The Company has rights to use certain assets through lease contracts.
Long-term assets acquired by the Company to minimise the environmental impact of its activity and protect and improve the environment, including the reduction and elimination of future pollution from the Company's activities, are recognised as property, plant and equipment in the balance sheet at cost of purchase or production and depreciated over their estimated useful lives.
The Company makes an environmental provision when expenses are probably or certain to arise but the amount or timing is unknown. Where necessary, a provision is also made for environmental work arising from any legal or contractual commitments and for those commitments acquired for the prevention and repair of environmental damage.
Intangible assets comprise the cost of software acquired during the year.
Details of property, plant and equipment and movement are as follows:
| Thousands of Euros | ||||
|---|---|---|---|---|
| Balance at 31.12.07 |
Additions | Balance at 31.12.08 |
||
| Cost | ||||
| Property, plant and equipment under construction |
- | 238 | 238 | |
| Carrying amount | - | 238 | 238 |
The Company has contracted insurance policies to cover the risk of damage to its property, plant and equipment. The coverage of these policies is considered sufficient.
Details of financial assets exposed to credit risk are provided in note 10.
Details of equity instruments of Group companies are as follows:
| Thousands of Euros |
|
|---|---|
| EDP Renováveis Brasil Nuevas Energias de Occidente, S.L. |
- 884,352 |
| Horizon Wind Energy, LLC | 2,763,995 |
| 3,648,347 |
No impairment valuation allowances have been recognised as a result of the tests carried out.
(a) Investments in Group companies
Details of investments in Group companies are provided in Appendix I.
Details of investments, the fair value of which is hedged against currency risk, are as follows at 31 December 2008:
| Investment | Thousands of Euros |
|---|---|
| Horizon Wind Energy, LLC. (HWE) | 2,763,995 |
| 2,763,995 |
The classification of financial assets by category and class, as well as a comparison of the fair value and the carrying amount is as follows:
| Thousands of Euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| Non-current | Current | |||||||
| At amortised cost or cost |
At amortised cost or cost |
|||||||
| Carrying amount |
Fair value | At fair value |
Total | Carrying amount |
Fair value | At fair value |
Total | |
| Assets held for trading | ||||||||
| Derivative financial instruments |
- | - | - | - | - | - | 1,527 | 1,527 |
| Total | - | - | - | - | - | - | 1,527 | 1,527 |
| Loans and receivables Fixed-rate loans |
2,608,612 | 2,802,884 | - | 2,608,612 | 194,978 | 194,978 | - | 194,978 |
| Guarantee deposits | 2 | 2 | - | 2 | 83,025 | 83,010 | - | 83,025 |
| Other financial assets | - | - | - | - | 22,825 | 22,825 | - | 22,825 |
| Trade receivables | ||||||||
| - | - | - | - | 1,849 | 1,849 | - | 1,849 | |
| Total | 2,608,614 | 2,802,886 | - | 2,608,614 | 302,677 | 302,662 | - | 302,677 |
| Total financial assets | 2,608,614 | 2,802,886 | - | 2,608,614 | 302,677 | 302,662 | 1,527 | 304,204 |
Net losses and gains by category of financial asset are as follows:
| Thousands of Euros | ||||
|---|---|---|---|---|
| Group loans Non-Group and loans and receivables receivables |
Total | |||
| Finance income at amortised cost | 126,936 | 607 | 127,543 | |
| Net gains/losses in profit and loss | 126,936 | 607 | 127,543 |
Details of investments in Group companies are as follows:
| Thousands of Euros | |||
|---|---|---|---|
| Non-current | Current | ||
| Group | |||
| Equity instruments | 3,648,347 | - | |
| Loans | 2,608,612 | 178,940 | |
| Interest | - | 16,038 | |
| Deposits | - | 83,025 | |
| Derivative financial instruments | - | 1,527 | |
| Other financial assets (note 8) | - | 22,825 | |
| 6,256,959 | 302,355 | ||
| Impairment valuation allowances | - | - | |
| 6,256,959 | 302,355 | ||
Details of the main characteristics of loans are as follows.
| Thousands of Euros | |||||||
|---|---|---|---|---|---|---|---|
| Carrying amount | |||||||
| Type | Currency | Effective rate |
Nominal rate |
Maturity | Nominal amount |
Current | Non-current |
| Group | EUR | 5.46% | 5.46% | 2027 | 405,414 | 21,338 | 384,076 |
| Group | EUR | 5.11% | 5.11% | 2018 | 122,086 | - | 122,086 |
| Group | EUR | 5.78% | 5.78% | 2020 | 12,000 | - | 12,000 |
| Group | EUR | 4.80% | 4.80% | 2016 | 95,059 | 11,882 | 83,177 |
| Group | EUR | 5.15% | 5.15% | 2023 | 560,652 | 38,666 | 521,986 |
| Group | EUR | 4.81% | 4.81% | 2022 | 209,737 | 15,536 | 194,201 |
| Group | EUR | 4.78% | 4.78% | 2021 | 443,857 | 34,143 | 409,714 |
| Group | EUR | 6.34% | 6.34% | 2023 | 269,242 | 9,284 | 259,958 |
| Group | EUR | 5.01% | 5.01% | 2022 | 269,854 | 19,989 | 249,865 |
| Group | EUR | 5.57% | 5.57% | 2023 | 347,644 | 23,975 | 323,669 |
| Group | EUR | 5.68% | 5.68% | 2023 | 52,007 | 4,127 | 47,880 |
| Total Group | 2,787,552 | 178,940 | 2,608,612 | ||||
| Total | 2,787,552 | 178,940 | 2,608,612 |
All these loans have been extended to Nuevas Energías de Occidente, S.L. and its subsidiaries at fixed interest rates.
Details of trade and other receivables are as follows:
| Thousands of Euros | ||
|---|---|---|
| Non-current | Current | |
| Group | ||
| Trade receivables | - | 1,679 |
| Other receivables | - | 170 |
| Non-related companies | ||
| Taxation authorities, income tax (note 16) | - | 13,582 |
| Public entities, other (note 16) | - | 773 |
| Total | - | 16,204 |
The classification of financial assets by maturity is as follows:
| Thousands of Euros | |||||||
|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | Subsequent years |
Less current portion |
Total non current |
| 2 | |||||||
| 22,825 | - | - | - | - | - | (22,825) | - |
| 1,527 | - | - | - | - | - | (1,527) | - |
| 1,849 | - | - | - | - | - | (1,849) | - |
| 187,518 | 187,518 | 187,518 | |||||
| 83,025 | 178,940 187,518 - 288,166 187,518 |
187,518 - |
187,518 - |
187,518 - |
2 | 1,858,540 (178,940) 2,608,612 (83,025) 1,858,542 (288,166) 2,608,614 |
Details of derivative financial instruments are as follows:
| 2008 | |||||||
|---|---|---|---|---|---|---|---|
| Thousands of Euros | |||||||
| Fair values | |||||||
| Assets | Liabilities | ||||||
| Non-current | Current | Non-current | Current | ||||
| Hedging derivatives | |||||||
| a) Fair value hedges | |||||||
| Net investment hedging swaps (note 8) | - | - | 65,478 | - | |||
| Total | - | - | 65,478 | - | |||
| Derivatives held for trading and at fair value through profit and loss |
|||||||
| b) Foreign currency derivatives | |||||||
| Forward exchange contracts | - | 1,527 | - | 1,527 | |||
| Total | - | 1,527 | - | 1,527 | |||
| Total hedging derivatives | - | 1,527 | 65,478 | 1,527 |
The total amount of gains and losses on hedging instruments and on items hedged under fair value hedges of net investments in Group companies is as follows:
| Thousands of Euros |
|
|---|---|
| Gains/(Losses) | |
| 2008 | |
| Forward foreign currency contracts | |
| - Net investment hedging swaps (note 8) | 103,472 |
| - Investments in Group companies (note 8) | (103,314) |
| 158 |
To eliminate the currency risk of a Group subsidiary, the Company has contracted a cross deal whereby it forward sells Polish Zloty to Neo Polska at a fixed price in Euros and simultaneously forward purchases Polish Zloty from EDP-Energías de Portugal, S.A. Sucursal en España. The nominal amount of these forward contracts is Euros 99 million. The Company has contracted this cross deal to hedge the exchange rate risk in the purchases of wind turbines which are payable in Polish Zloty by its subsidiary Neolica Polska SP Z.O.O.
Details of cash and cash equivalents are as follows:
| Thousands of Euros |
|
|---|---|
| Cash in hand and at banks | 16,610 |
| 16,610 |
Details of equity and movement during the year are shown in the statement of changes in equity.
At 31 December 2008, the share capital of the Company is represented by 872,308,162 ordinary bearer shares of Euros 5 par value each, all fully paid. These shares have the same voting and profit-sharing rights and are freely transferable.
Companies which hold a direct or indirect interest of at least 10% in the share capital of the Company are as follows:
| 2008 | 2007 | |||
|---|---|---|---|---|
| Company | Number of shares |
Percentage ownership |
Number of shares |
Percentage ownership |
| EDP - Energías de Portugal, S.A. Sucursal en España | 541,005,522 | 62.02% | 1,887,298 | 100.00% |
| Hidroeléctrica del Cantábrico, S.A. | 135,294,996 | 15.51% | - | - |
| Others | 196,007,644 | 22.47% | - | - |
| 872,308,162 | 100.00% | 1,887,298 | 100.00% |
These reserves are freely distributable.
As a consequence of the public share offering, the Company has incurred a number of expenses associated with the share capital increase which have been recognised in this caption net of the tax effect.
A classification of financial liabilities by category and class, and a comparison of the fair value with the carrying amount are as follows:
| Thousands of Euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| Non-current | Current | |||||||
| cost | At amortised cost or | At amortised cost or cost |
||||||
| Carrying amount |
Fair value | At fair value |
Total | Carrying amount |
Fair value | At fair value |
Total | |
| Liabilities held for trading | ||||||||
| Derivative financial instruments |
- | - | - | - | - | - | 1,527 | 1,527 |
| Total | - | - | - | - | - | - | 1,527 | 1,527 |
| Debits and payables | ||||||||
| Fixed-rate payables to | 862,817 | 901,553 | - | 862,817 | - | - | - | - |
| companies | 862,817 | 901,553 | - | 862,817 | - | - | - | - |
| Other financial liabilities |
2 | 2 | - | 2 | 4,813 | 4,813 | - | 4,813 |
| Trade and other payables |
||||||||
| - | - | - | - | 14,438 | 14,438 | - | 14,438 | |
| Total | 2 | 2 | - | 2 | 19,251 | 19,251 | - | 19,251 |
| Hedging derivatives Contracted in OTC markets |
||||||||
| - | - | 65,478 | 65,478 | - | - | - | - | |
| Total | - | - | 65,478 | 65,478 | - | - | - | - |
| Total financial liabilities | 862,819 | 901,555 | 65,478 | 928,297 | 19,251 | 19,251 | 1,527 | 20,778 |
26
Net gains and losses by financial liability category are as follows:
| Thousands of Euros | |||||
|---|---|---|---|---|---|
| Group debits and payables |
Non-Group debits and payables |
Total | |||
| Finance expenses at amortised cost | 13,249 | 7 | 13,256 | ||
| Total | 13,249 | 7 | 13,256 |
(a) Group companies
Details of Group companies are as follows:
| Thousands of Euros | |||
|---|---|---|---|
| Non-current | Current | ||
| Group Group companies |
862,817 | - | |
| Group trade payables | - | 3,225 | |
| Current account with Group companies | - | 4,813 | |
| Total | 862,817 | 8,038 |
Group companies reflect a fixed-interest loan obtained from EDP-Energías de Portugal, S.A. Sucursal en España.
The terms and conditions of loans and payables are as follows:
| Thousands of Euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| Carrying amount | ||||||||
| Effectiv | Nomina | Nominal | Non | |||||
| Type | Currency | e rate | l rate | Maturity | amount | Current | current | |
| Group | ||||||||
| USD | 4.41% | 4.41% | 2018 | 862,817 | - | 862,817 | ||
| Total | 862,817 | - | 862,817 |
Details of trade and other payables are as follows:
| Thousands of Euros | ||||
|---|---|---|---|---|
| Non-current | Current | |||
| Group | ||||
| Suppliers | - | 3,759 | ||
| - | 3,759 | |||
| Related companies | ||||
| Trade payables | - | 1,548 | ||
| - | 1,548 | |||
| Non-related companies | ||||
| Fixed asset suppliers | - | 195 | ||
| Trade payables | - | 7,874 | ||
| Others | 2 | 1,061 | ||
| Public entities, other | - | 220 | ||
| 2 | 9,350 | |||
| Total | 2 | 14,657 | ||
The classification of financial liabilities by maturity is as follows:
| Thousands of Euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | Subsequent years |
Less current portion |
Total non current |
|
| Group companies | - | - | - | - | - | 862,817 | - | 862,817 |
| Derivative financial instruments |
1,527 | - | - | - | - | 65,478 | 1,527 | 65,478 |
| Other financial liabilities | 4,813 | - | - | - | - | - | 4,813 | - |
| Trade and other payables | 14,657 | - | - | - | - | - | 14,657 | - |
| Total financial liabilities | 20,997 | - | - | - | - | 928,295 | 20,997 | 928,295 |
Details of balances payable to public entities are as follows:
| Thousands of Euros | ||||
|---|---|---|---|---|
| Non | ||||
| current | Current | |||
| Assets | ||||
| Deferred tax assets | 160 | - | ||
| Current tax assets | - | 13,582 | ||
| Value added tax and similar | - | 773 | ||
| 160 | 14,355 | |||
| Liabilities | ||||
| Deferred tax liabilities | 13,123 | - | ||
| Value added tax and similar | - | 220 | ||
| 13,123 | 220 | |||
The Company has the following main applicable taxes open to inspection by the Spanish taxation authorities:
| Years open | |
|---|---|
| to inspection | |
| Tax | |
| Income tax | 2007 - 08 |
| Value added tax- | 2007 - 08 |
| Personal income tax | 2007 - 08 |
| Capital gains tax | 2007 - 08 |
| Business activities tax | 2007 - 08 |
| Social Security | 2007 - 08 |
| Non-residents | 2007 - 08 |
Due to the different possible interpretations of prevailing tax legislation, certain additional liabilities could arise in the event of an inspection. In any event, the directors do not consider that any such contingencies that could arise would have significant effect on the annual accounts.
A reconciliation of net income and expenses for the year and the taxable income is as follows:
| Thousands of Euros | |||||
|---|---|---|---|---|---|
| Income Statements | |||||
| Increases | Decreases | Net | |||
| Profit for the year | 74,794 | 74,794 | |||
| Income tax | 32,025 | - | 32,025 | ||
| Profit before income tax | 106,819 | - | 106,819 | ||
| Permanent differences | 23,612 | 49,386 | (25,774) | ||
| Temporary differences: | - | 29,768 | (29,768) | ||
| Originating in current year | 534 | 29,163 | (28,629) | ||
| Originating in prior years | - | 1,139 | (1,139) | ||
| Offset of tax loss carryforwards | 36,964 | (36,964) | |||
| Taxable income | 14,314 |
In the increases column, permanent differences reflect adjustments arising from conversion to the new Spanish General Chart of Accounts, mainly in relation to provisions for impairment of investments in Group companies. All permanent differences in the decreases column are derived from the costs of the public offering.
All tax loss carryforwards are offset in the current year.
Details of the income tax expense related to profit for the year are as follows:
| Thousands of Euros | ||||
|---|---|---|---|---|
| Profit and loss | Equity | Total | ||
| Profit for the year | 106,819 | - | 106,819 | |
| Tax at 30% | 32,046) | - | 32,046 | |
| Effect of differences in tax rates | ||||
| Previously unrecognised tax credits applied | (11,090) | (11,090) | ||
| Prior years' adjustments for deferred tax liabilities Adjustment for conversion to new General Chart of |
4,374 | 4,374 | ||
| Accounts that use tax credits not recognised in prior years | 7,084 | - | 7,084 | |
| Prior years' adjustments for deferred tax assets | (389) | - | (389) | |
| Income tax expense | 32,025 | - | 32,025 |
Details of the income tax expense are as follows:
| Thousands of Euros |
|
|---|---|
| Current tax for the year | |
| 19,062 | |
| 19,062 | |
| Deferred tax liabilities | |
| Source and reversal of temporary differences | |
| Amortisation of HWE goodwill | 13,123 |
| Salaries payable | (160) |
| 12,963 | |
| 32,025 |
The total payment of current tax for 2008 is reduced by Euros 14,816 thousand as a result of the costs related to the public share offering recognised in equity.
Details of deferred tax assets and liabilities that are expected to be realised or reverse in periods exceeding 12 months, are as follows:
| Thousands of Euros | |||||
|---|---|---|---|---|---|
| Assets | Liabilities | Net | |||
| Amortisation of HWE goodwill | - | (13,123) | (13,123) | ||
| Personnel expenses | 160 | - | 160 | ||
| Total assets/liabilities | 160 | (13,123) | (12,963) |
Details of deferred tax assets and liabilities that are expected to be realised or reverse in periods exceeding 12 months, are as follows:
| Thousands of Euros |
|
|---|---|
| Amortisation of HWE goodwill | (13,123) |
| Net | (13,123) |
Given the nature of its activity, the Company does not consider it necessary to make investments to prevent or correct environmental effects of that activity or to make any environmental provisions. However, a number of required environmental studies have been carried out in accordance with prevailing legislation to obtain authorisation for wind farms developed on behalf of Group companies. These studies have been recognised as an increase in property, plant and equipment in progress.
The current annual accounts do not include any environmental costs.
The directors consider that no significant environmental contingencies exist.
Details of balances receivable from and payable to Group companies and related parties, including members of senior management and directors, and the main characteristics are disclosed in notes 10 and 15.
Details of balances by category are as follows:
| Thousands of Euros | ||||||
|---|---|---|---|---|---|---|
| Parent company |
Group companies |
Directors | Total | |||
| Non-current investments in Group companies | - | 3,648,347 | - | 3,648,347 | ||
| Non-current investments | - | 2,608,612 | - | 2,608,612 | ||
| Total non-current assets | - | 6,256,959 | - | 6,256,959 | ||
| Trade and other receivables | - | 1,679 | - | 1,679 | ||
| Current investments | - | 302,355 | - | 302,355 | ||
| Total current assets | - | 304,034 | - | 304,034 | ||
| Total assets | - | 6,560,993 | - | 6,560,993 | ||
| Group companies – non-current | 862,817 | - | - | 862,817 | ||
| Total non-current liabilities | 862,817 | - | - | 862,817 | ||
| Current accounts with Group companies | - | 4,813 | - | 4,813 | ||
| Current payables | - | 5,307 | 30 | 5,337 | ||
| Total current liabilities | - | 10,120 | 30 | 10,150 | ||
| Total liabilities | 862,817 | 10,120 | 30 | 872,967 |
The Company's transactions with related parties are as follows:
| Thousands of Euros | ||||||
|---|---|---|---|---|---|---|
| Group companies |
Directors | Total | ||||
| Revenue | ||||||
| Other services rendered | 1,679 | - | 1,679 | |||
| Finance income | 126,936 | - | 126,936 | |||
| 128,615 | - | 128,615 | ||||
| Expenses | ||||||
| Operating lease expenses | (1,500) | - | (1,500) | |||
| Other services received | (2,555) | - | (2,555) | |||
| Personnel expense | ||||||
| Salaries | - | (277) | (277) | |||
| Finance expenses | (13,249) | - | (13,249) | |||
| (17,304) | (277) | (17,581) | ||||
| 111,311 | (277) | 111,034 |
During 2008 the directors of the Company have received remuneration of Euros 277 thousand and senior management have received Euros 244 thousand. Remuneration paid to directors includes Euros 235 thousand which, although it is on account of EDP Renováveis, S.A., has been paid to the chief executive officer by EDP Energías de Portugal, S.A. Transactions with group companies relating to other services received, described in section b) above, include this cost. The directors and senior management have not received any loans or advances and the Company has not extended any guarantees on their behalf. The Company has no pension or life insurance obligations with the Company's former or current directors.
During 2008 the directors have not carried out any transactions other than ordinary business with the Company or applying terms that differ from market conditions.
Details of employee benefits expenses and provisions are as follows:
| Thousands of Euros |
|
|---|---|
| 2008 | |
| Employee benefits expense Social security payable by the Company |
34 |
| Other employee benefits expenses | 13 |
| 47 |
Details of revenue and expenses denominated in foreign currencies are as follows:
| Thousands of Euros |
|
|---|---|
| 2008 | |
| Revenue | |
| Financial instruments | 9,353 |
| Finance income | 9,353 |
| Expenses | |
| Financial instruments | (12,958) |
| Finance expense | (12,958) |
| Net | (3,605) |
The average headcount of the Company during 2008, distributed by category, is as follows.
| Number | |
|---|---|
| Management | 2 |
| Senior technicians | 3 |
| 5 | |
| (Continues) |
At year end the distribution by gender of Company personnel and the members of the board of directors is as follows:
| Number | |||
|---|---|---|---|
| Management | Male | Female | |
| 9 | 2 | ||
| Senior technicians | 11 | 6 | |
| Technicians | 1 | 1 | |
| 21 | 9 |
One of the fifteen members of the board of directors is female.
KPMG Auditores, S.L., the auditors of the individual and consolidated annual accounts of the Company, and other individuals and companies related to the auditors as defined by Audit Law 19 of 12 July 1988 have invoiced the Company the following net fees for professional services during the year ended 31 December 2008:
| Thousands of Euros |
|
|---|---|
| Audit services individual and consolidated annual accounts Audit-related services linked to the public share offering |
157 121 |
| 278 |
Audit services detailed in the above table include the total fees for services rendered in 2008.
Other companies related to KPMG International have invoiced the Company as follows:
| Thousands of Euros |
|
|---|---|
| Audit-related services linked to the public offering | 344 |
| 344 |
No events have occurred subsequent to year end which could affect these annual accounts.
| Share eapital | Share premium |
Profit/(loss) for the year |
Total | ||
|---|---|---|---|---|---|
| Balance at 31 December 2007 | 18,873 | 1,882,338 | (23,520) | 1,877,691 | |
| Effect of adjustments: Recognition of net hedging operation Elimination of provision for deeline in value of securities Tax effect of adjustments Deferred tax |
158 23,454 (48) |
158 23,454 (48) |
|||
| Balance at 31 December 2007 under new accounting criteria | 18,873 | 1.882.338 | 44 | 1.901.255 |
Appendix I Page 1 of 13
| ho d f T Eu us an o ro |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| He d a Su bs i d iar ies Co ies O f f ice m p an |
Ne Pr t |
f i t o |
|||||||||
| % D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
|||
| ÍAS NU EV AS EN ER G DE O CC IDE NT E, S.L |
Ov ie do Sp in a , |
10 0, 0 0% |
- | KP MG |
Ho l d ing |
3 0. 0 0 0 |
19 5. 42 6 |
- | ( 3 1.9 49 ) |
19 3. 47 6 |
|
| ias Ac A S.L am po r , |
in Za Sp rag oza a , |
- | 9 8, 19% |
KP MG |
in d W |
3. 3 14 |
0 | - | 0 | 3. 3 15 |
|
| Ag ión Eó l ica S.L .U rup ac , |
Sp in Za rag oza a , |
- | 10 0, 0 0% |
MG KP |
in d W |
2 77 |
44 39 8 |
- | 20 0 |
45 37 1 |
|
| Pa e E ó l ico P lan de Ar jon S.L .U ta rqu a a, |
Za Sp in rag oza a , |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
12 | ( 3 ) |
- | 0 | 9 | |
| C.E br iac S AS .Bo ur , |
is, Pa Fra r nce |
- | 10 0, 0 0% |
MG KP |
in d W |
5 0 |
( 4) |
- | 4 | 5 0 |
|
| Co ía Eó l ica Ca de Bo ja, S. A. añ mp mp o r |
Za Sp in rag oza a , |
- | 7 5, 8 3% |
KP MG |
W in d |
8 5 8 |
9 9 |
- | 28 1 |
1. 23 8 |
|
| C ía. E léc ica de En ías Re b les tr erg no va A lte iva S. A. L. t rna s, |
Za Sp in rag oza a , |
- | 10 0, 0 0% |
De lo itte |
W in d |
69 | ( 14) |
- | 0 | 5 5 |
|
| Ce r A IE stu pra |
Ov ie do Sp in a , |
- | 45 41 % , |
No Au d ite d t |
M in i hy dra l ic u |
36 1 |
5 0 |
- | 8 | 41 8 |
|
| Co ión Em ia l de Re b les rpo rac pre sar no va lte iva A S.L .U t rna s, |
Za Sp in rag oza a , |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
86 | ( 2) |
- | ( 0 ) |
8 4 |
|
| Eò l ic de Co l l de S. Pa Mo L. rc ro, |
lon Sp in Ba rce a, a |
- | 0, 0 0% 6 |
d ite d No t a u |
in d W |
3 | 5 | - | 0 | 8 | |
| De l los Eó l ico A lm ha l S A. U. sar ro s arc |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
KP MG |
W in d |
2. 06 1 |
( 3 3 ) |
- | 1. 09 3 |
3. 12 1 |
|
| l los Eó l ico ist De s B S. A. U. sar ro uen av a, |
i l la, in Se Sp v a |
- | 8 0, 0 0% |
KP MG |
in d W |
1.7 12 |
1. 44 9 |
- | 1. 0 8 0 |
4. 24 2 |
|
| De l los Ca lan De l V ien S.L ta to, sar ro es |
Ba lon Sp in rce a, a |
- | 6 0, 0 0% |
KP MG |
W in d |
79 4 |
( 3 ) |
- | ( 10 2) |
6 8 8 |
|
| l los l ico de De Eó Co S. A. sar ro s rm e, |
i l la, in Se Sp v a |
- | 8 0, 0 0% |
KP MG |
in d W |
3.6 66 |
3. 0 09 |
- | 9 79 |
7.6 5 5 |
|
| l los Eó l ico br ía, S. A. De s D U. sar ro um |
Co Sp in La ruñ a, a |
- | 8 0, 0 0% |
MG KP |
in d W |
1 6 |
2. 19 7 |
- | 5. 26 4 |
5 22 7. |
|
| De l los Eó l ico de Ga l ic ia, S. A. sar ro s |
La Co Sp in ruñ a, a |
- | 77 3 3% , |
KP MG |
W in d |
6. 13 0 |
1. 8 8 5 |
- | 1.6 07 |
9.6 23 |
|
| l los Eó l ico de S. A. De Lu U. sar ro s go , |
Co Sp in La ruñ a, a |
- | 8 0, 0 0% |
MG KP |
in d W |
1 7.7 6 |
2. 0 3 1 |
- | 8. 18 3 |
17. 5 9 7 |
|
| De l los Eó l ico s P ión S. A. U. sar ro rom oc |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
KP MG |
W in d |
8. 06 1 |
17. 9 77 |
- | 12. 36 2 |
3 8. 40 0 |
|
| l los l ico de bo De Eó Ra S. A. sar ro s ser a, |
in Za Sp rag oza a , |
- | 76 0 0% , |
KP MG |
in d W |
7. 56 1 |
1. 147 |
- | 3.6 5 4 |
12. 36 2 |
|
| De l los Eó l ico S. A. sar ro s, |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
KP MG |
W in d |
1. 0 56 |
17. 76 9 |
- | ( 1. 21 9 ) |
17. 06 6 |
|
| De l los Eó l ico de Ta i fa, S. A. U. sar ro s r |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
KP MG |
W in d |
5. 8 0 0 |
1.7 7 2 |
- | 2. 5 11 |
10. 0 8 3 |
|
| Eó l ica Q i jo S.L D te, on u |
dr i d, Sp in Ma a |
- | 8 0, 0 0% |
MG KP |
in d W |
3 | 1 | - | 5. 36 3 |
5. 36 7 |
|
| Eó l ica D lc ine S.L u a, |
Ma dr i d, Sp in a |
- | 8 0, 0 0% |
KP MG |
W in d |
10 | 0 | - | 1. 89 2 |
1.9 0 2 |
|
| Eo l ica A l foz S.L , |
Ma dr i d, Sp in a |
- | 67 9 8% , |
KP MG |
W in d |
10 | 0 | - | 0 | 10 |
Appendix I Page 2 of 13
| ho d f T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne t Pr |
f i t o |
|||||||||
| Su i iar ies Co ies bs d m p an |
He d a f f ice O |
% ire D t c |
% ire In d t c |
i Au d to r |
iv i Ac t ty |
S ha re Ca i ta l p |
Re se rv es |
Ex tra or |
To ta l |
To l ta i Eq ty u |
| Eó l ica A lan zón S. A. r , |
Ma dr i d, Sp in a |
- | 2, 0 0% 6 |
KP MG |
W in d |
4. 5 09 |
1. 15 3 |
- | 2. 8 21 |
8. 48 3 |
| Eó l ica Ca l lan S. A. mp o o, |
Ma dr i d, Sp in a |
- | 6 0, 0 0% |
KP MG |
W in d |
6. 56 0 |
2. 5 11 |
- | 9. 3 5 1 |
18. 42 2 |
| Eó l ica S. A. M N ost are rum |
len ia, Sp in Va c a |
- | 48 0 0% , |
Au d ite d No t |
in d W |
0 6 |
( 10 2) |
- | ( 0 ) |
( 43 ) |
| Eó l ica La Br ú ju la, S. A. |
Ma dr i d, Sp in a |
- | 67 9 2% , |
KP MG |
W in d |
3. 29 4 |
9 3 8 |
- | 3. 148 |
7. 3 8 0 |
| l ica hu la, En ías Eó s L a M S.L .U erg anc e |
l ba in A Sp cet e, a |
- | 8 0, 0 0% |
KP MG |
in d W |
1. 142 |
22 8 |
- | 1.9 16 |
3. 28 6 |
| En l iva S. A. U. ero , |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
No Au d ite d t |
So lar |
7 5 |
( 7 ) |
- | 0 | 6 8 |
| Eó l ica Fo i lva S.L .U nte s , |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
No d ite d t a u |
W in d |
10 | ( 0 ) |
- | ( 0 ) |
10 |
| i dro léc ica S. H Fu L. tr ent e erm osa Pa de Ge ión Eó l ica S.L rqu es ner ac , |
Ov ie do Sp in a , Bu Sp in rgo s, a |
- - |
1, 96 7 % 6 0, 0 0% |
Au d ite d No t KP MG |
in i hy dra l ic M u W in d |
77 1.9 24 |
17 2 3 44 |
- - |
12 41 8 |
26 1 2.6 87 |
| Ge ion ia les S.L Es I, ner ac es pe c |
Ov ie do Sp in a , |
- | 8 0, 0 0% |
MG KP |
l d ing Ho |
28 56 2 |
156 5 8 1 |
- | 3. 3 43 |
18 8. 48 7 |
| Ce Pr ion Eó l ica S.L .U asa om oc es s |
Za Sp in rag oza a , |
- | 10 0, 0 0% |
Ern &Y st ou ng |
Ho l d ing |
1. 20 5 |
( 6 0 8 ) |
- | ( 5 44 ) |
5 3 |
| l le de l E bro ier ía Co lto ría SL Va In gen y nsu |
Sp in Za rag oza a , |
- | 8 0, 0 0% |
d ite d No Au t |
l d ing Ho |
18 8 |
3. 07 7 |
- | 22 7 |
3.9 87 |
| Eó l ica G da lte ba S.L ua , |
Se i l la, Sp in v a |
- | 8 0, 0 0% |
No Au d ite d t |
W in d |
10 | ( 0 ) |
- | ( 1) |
9 |
| H i dro léc ica G S. A. tr e orm az |
Ma dr i d, Sp in a |
- | 6 0, 0 0% |
No Au d ite d t |
M in i hy dra l ic u |
6 1 |
( 37 ) |
- | ( 59 ) |
( 36 ) |
| ber ia ham ien l ico I Ap Eó S. A. U. tos rov ec s, Inv iga ión De l lo de En ías est c y sar ro erg b les S.L Re no va , |
in Za Sp rag oza a , Le ón Sp in a , |
- - |
10 0, 0 0% 47 67 % , |
KP MG KP MG |
in d W W in d |
1.9 19 15. 7 18 |
6 2 ( 25 9 ) |
- - |
1. 0 14 ( 2. 21 7 ) |
2.9 9 5 13. 24 2 |
| In du ias M d ioa b ien les Rí Ca ión str ta e m o rr , S. A. |
Ma dr i d, Sp in a |
- | 7 2, 0 0% |
No Au d ite d t |
W ast e |
15 | ( 10 ) 6 |
- | ( 0 ) |
( 59 5 ) |
| Eó l ica jan da S.L La , |
dr i d, Sp in Ma a |
- | 8 0, 0 0% |
d ite d No Au t |
in d W |
10 | ( 1) |
- | 14 | 23 |
| Eó l ica La N ica S.L av , |
Ma dr i d, Sp in a |
- | 8 0, 0 0% |
KP MG |
W in d |
10 | 0 | - | 1. 17 0 |
1. 18 0 |
| Pa e E ó l ico Lo Ca les S.L .U nta rqu s , |
Za Sp in rag oza a , |
- | 10 0, 0 0% |
KP MG |
W in d |
1.9 6 3 |
( 11) |
- | 2. 49 8 |
4. 45 1 |
| Pa Eo l ic M l ina S.L rc o rs |
G iro Sp in na a , |
- | 5 4, 0 0% |
No d ite d t a u |
W in d |
3 | 0 | - | 0 | 3 |
| l ino de Ca S. Mo üey L. rag es, |
Sp in Za rag oza a , |
- | 8 0, 0 0% |
MG KP |
in d W |
18 0 |
( 43 ) |
- | 10 | 147 |
| ó l ico de Ca j ón S.L Pa e E M tes ste rqu on , |
Sp in Za rag oza a , |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
12 | ( 3 ) |
- | 0 | 9 |
| Eó l ica ia, S.L M ux |
Co Sp in La ruñ a, a |
- | 8 0, 0 0% |
d ite d No t a u |
in d W |
10 | ( 0 ) |
- | ( 0 ) |
10 |
| O E ia Ar ón S. NE L. ner g ag |
dr i d, Sp in Ma a |
- | 10 0, 0 0% |
MG KP |
in d W |
10 | ( 0 ) |
- | ( 1) |
8 |
Appendix I Page 3 of 13
| f ho d T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su Co bs i d iar ies ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| O Ca lun S.L NE ta ya |
lon Sp in Ba rce a, a |
- | 10 0, 0 0% |
MG KP |
in d W |
10 | 0 | - | ( 3 14) |
( 3 0 4) |
| i In ion Ne SI C AV S. A. om a ver s es , |
dr i d, in Ma Sp a |
- | 10 0, 0 0% |
ice ho Pr W ate r u Co se op ers |
in d W |
3 3. 3 5 8 |
6. 44 8 |
- | ( 1. 3 0 4) |
3 8. 5 0 3 |
| ó l ico Sa Q ite ia, S.L Pa e E nta rqu r u |
Sp in Za rag oza a , |
- | 46 66 % , |
MG KP |
in d W |
3 6 |
8.6 21 |
- | 3. 39 9 |
12. 0 8 3 |
| ó l ico lc h ite S.L Pa e E Be .U rqu , |
Sp in Za rag oza a , |
- | 8 0, 0 0% |
MG KP |
in d W |
3.6 0 0 |
20 7 |
- | 3. 21 1 |
5 3 1 7. |
| Eó l ico de l C á br ico S. Pa A. ant rqu es s , |
Ov ie do Sp in a , |
- | 8 0, 0 0% |
MG KP |
in d W |
0 8 0 9. |
10. 148 |
- | 4. 127 |
23 3 5 5 |
| Pa e E ó l ico So S.L ton rqu era , |
Za Sp in rag oza a , |
- | 5 1, 8 8% |
KP MG |
W in d |
2. 0 0 0 |
3 11 |
- | 2. 19 5 |
4. 5 06 |
| l ica de do Eo Ra S.L .U na , |
dr i d, in Ma Sp a |
- | 8 0, 0 0% |
d ite d No t a u |
in d W |
10 | 0 | - | 0 | 10 |
| Ra l C ión S. A. sac a og ene rac , |
Ma dr i d, Sp in a |
- | 48 0 0% , |
No Au d ite d t |
Co ion t gen era |
6 0 |
( 47 6 ) |
- | 0 | ( 41 6 ) |
| S ies a R b les Ca ias S.L eno va nar , |
Gr Ca ia, an nar Sp in a |
- | 8 0, 0 0% |
No Au d ite d t |
W in d |
3 | ( 2) |
- | ( 1) |
0 |
| Re b les Ca i l la La M ha S. A. st no va anc , |
A l ba Sp in cet e, a |
- | 7 2, 0 0% |
KP MG |
W in d |
15 | ( 0 ) |
- | 2. 15 0 |
2. 16 5 |
| H i dro léc ica de l R b lar S. L. tr e um Áv Eó l ica ier de i la, S S.L ra |
Ma dr i d, Sp in a dr i d, in Ma Sp a |
- - |
6 4, 0 0% 7 1, 9 9% |
No Au d ite d t KP MG |
M in i hy dra l ic u in d W |
27 6 10 |
( 149 ) 0 |
- - |
( 8 5 ) 0 |
42 10 |
| S ina ion Eó l ica S. e I A. nv ers es s, |
dr i d, Sp in Ma a |
- | 8 0, 0 0% |
MG KP |
in d W |
0 10 6. |
0 7.6 7 |
- | 5. 56 7 |
19. 24 7 |
| So l, S. A. tro ma |
So ia, Sp in r a |
- | 7 2, 0 0% |
No Au d ite d t |
W ast e |
113 | ( 27 9 ) |
- | ( 10 ) |
( 176 ) |
| Pa Eò l ic de To M dr ina S.L rc rre a , |
Ba lon Sp in rce a, a |
- | 6 0, 0 0% |
No d ite d t a u |
W in d |
3 | 4 | - | 0 | 7 |
| ien d ioa b ien les de l N Tr M ata tos ta ort m e m e, S. A. |
dr i d, in Ma Sp a |
- | 6 4, 0 0% |
d ite d No Au t |
W ast e |
6 0 |
4 | - | ( 47 ) |
17 |
| Tr ien M d ioa b ien les Rí So ón ata tos ta t m e m o , S. A. |
Ma dr i d, Sp in a |
- | 8 0, 0 0% |
KP MG |
W ast e |
6 0 |
13 | - | 2. 36 2 |
2. 43 5 |
| Ve inc o E ia L im ia S.L ner g p |
Za Sp in rag oza a , |
- | 8 0, 0 0% |
No Au d ite d t |
W in d |
3 | 3 40 |
- | 5 6 |
40 8 |
| Bo n V de Co ber S.L ent r a, |
Ba lon Sp in rce a, a |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
9 0 |
( 4) |
- | 0 | 86 |
| Bo n V de V i la l ba S.L ent , |
Ba lon Sp in rce a, a |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
9 0 |
( 4) |
- | 0 | 86 |
| Eò l ic de i la l ba de ls Ar S. Pa V L. rc cs, |
lon Sp in Ba rce a, a |
- | 0, 0 0% 6 |
d ite d No t a u |
in d W |
3 | 0 | - | 0 | 3 |
Appendix I Page 4 of 13
| ho d f T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| Pa Eo l ien D 'Ar den rc ne s |
E l beu f, Fra nce |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
1 | ( 119 ) |
- | ( 3 ) |
( 12 1) |
| C.E Ay s-L e T l, S AS sse ne rue |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
15 0 |
( 6 ) |
- | ( 12) |
13 2 |
| Pa Eo l ien du C los Ba i l le, S AS ta rc |
E l beu f, Fra nce |
- | 10 0, 0 0% |
Ca b ine t E xco |
W in d |
37 | ( 89 4) |
- | ( 39 8 ) |
( 1. 25 4) |
| C.E . B ir, S AS eau rev o |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
5 0 |
17 | - | ( 4) |
3 6 |
| Eo l ien de s B S AR L ne oca ge s, |
E l beu f, Fra nce |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
1 | ( 23 ) |
- | ( 3 ) |
( 26 ) |
| C.E Ca lan he l L hu S AS o ec, |
is, Pa Fra r nce |
- | 10 0, 0 0% |
MG KP |
in d W |
8 0 |
( 8 ) |
- | ( ) 6 |
66 |
| l ien de Ca l len i l le, S AS Eo ne gev |
l beu f, E Fra nce |
- | 10 0, 0 0% |
MG KP |
in d W |
37 | ( 17 ) |
- | ( ) 6 |
14 |
| CE Ca de Sa lar S AS -Po net nt s, |
is, Pa Fra r nce |
- | 10 0, 0 0% |
MG KP |
in d W |
125 | ( 28 0 ) |
- | ( 5 0 ) |
( 20 5 ) |
| l ien de C ham S AR Pa Eo s L L rc on gs ps, |
l beu f, E Fra nce |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
1 | ( 0 ) 6 |
- | ( ) 6 |
( ) 66 |
| le Se ice S Eo AR L rv , |
l beu f, E Fra nce |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
10 | 25 | - | 4 | 40 |
| le lop Eo 76 D S AR L ent eve pem , |
l beu f, E Fra nce |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
5 0 |
( 3 4) |
- | ( 156 ) |
( 140 ) |
| l ien lon de Eo D'E S AR L ta ne s, |
l beu f, E Fra nce |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
1 | ( 22 ) |
- | ( 4) |
( 25 ) |
| Le G l lot S AS o |
Ca ha ix, Fr r anc e |
- | 10 0, 0 0% |
Jea n-Y ve s Mo iss et r |
W in d |
37 | ( 8 2) |
- | ( 40 4) |
( 44 9 ) |
| CE G lta l-P ivy S AS s N t ue oy a on , |
is, Pa Fra r nce |
- | 10 0, 0 0% |
MG KP |
in d W |
2. 26 1 |
8 43 |
- | 20 5 |
3. 3 09 |
| Pa Eo l ien de La H S AS etr rc oy e, |
E l beu f, Fra nce |
- | 10 0, 0 0% |
Ca b ine t E xco |
W in d |
37 | ( 18 ) |
- | ( 5 ) |
14 |
| l lyw l l In im ite d, Ho s L S AR L stm ent e ve |
bo Lu xem urg |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
13 | ( 3 41 ) |
- | ( 5 5 1) |
( 8 8 0 ) |
| Ke fou ler S AS ran |
Ca ha ix, Fr r anc e |
- | 10 0, 0 0% |
Jea n-Y ve s iss Mo et r |
W in d |
37 | ( 15 ) |
- | ( 22 2) |
( 19 9 ) |
| S O CP E L e M S. A. R.L ee |
To lou Fr u se, anc e |
- | 49 0 0% , |
KP MG |
W in d |
1 | 0 | - | ( 3 4) |
( 3 3 ) |
| Pa Eo l ien Le s B les D 'Or S. A. R.L rc |
To lou Fr u se, anc e |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
1 | ( 7 ) |
- | ( 6 3 ) |
( 69 ) |
| C.E . L V ie l les S AS es , |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
5 0 0 |
( 26 3 ) |
- | ( 4) |
23 3 |
| Pa Eo l ien de Ma hev i l le, S AR L rc nc |
E l beu f, Fra nce |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
1 | ( 3 4) |
- | ( 3 ) |
( 3 5 ) |
| Eo le Fu M lou 1, S AS tur t on e |
E l beu f, Fra nce |
- | 10 0, 0 0% |
Ca b ine t E xco |
W in d |
37 | ( 47 ) |
- | ( 8 8 ) |
( 9 7 ) |
| Ne Ga l ia S AS o , |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
7. 0 37 |
0 | - | ( 1. 42 7 ) |
5.6 10 |
Appendix I Page 5 of 13
| ho d f T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| C.E . P S AS ata y, |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
1.6 40 |
9 2 |
- | 5 47 |
2. 27 9 |
| Pa Eo l ien de s B S AR L rc oca ge s, |
E l beu f, Fra nce |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
1 | ( 157 ) |
- | ( 4) |
( 16 0 ) |
| S O CP E P ite P iec S. A. R.L et e |
To lou Fr u se, anc e |
- | 49 0 0% , |
KP MG |
W in d |
1 | 0 | - | ( 4) |
( 3 ) |
| S O CP E P iec de V ign S. A. R.L es e |
To lou Fr u se, anc e |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
1 | ( ) 6 |
- | ( 5 ) |
( 10 ) |
| P lou ien Br iz S AS v e |
Ca ha ix, Fr r anc e |
- | 10 0, 0 0% |
Jea n-Y ve s iss Mo et r |
W in d |
40 | ( 7 8 5 ) |
- | ( 44 ) 6 |
( 1. 19 1) |
| CE Po d ´Y S AS nt eu , |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
20 0 |
( 142 ) |
- | ( 4) |
5 4 |
| C.E . P i l le, S. A. S rou v |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
3 8 |
( 4) |
- | 5 | 39 |
| Éo Re h. Dé l. l ien et c ve ne s |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
7 5 0 |
5 36 |
- | ( 9 20 ) |
36 6 |
| i dg i de im ite d, S AR R Inv L L est nts es me |
bo Lu xem urg |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
13 | ( 20 0 ) |
- | ( 3 43 ) |
( 5 3 0 ) |
| l ien de S AR Pa Eo Ro L rc ma n, |
l beu f, E Fra nce |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
1 | ( 9 2) |
- | ( 3 ) |
( 9 4) |
| CE Sa int A l ban l, S AS -H ena na |
is, Pa Fra r nce |
- | 10 0, 0 0% |
MG KP |
in d W |
5 0 |
0 | - | ( 2) |
48 |
| int be C.E Sa Ba S AS rna , |
is, Pa Fra r nce |
- | 10 0, 0 0% |
KP MG |
in d W |
1.6 0 0 |
( 22 6 ) |
- | 29 6 |
1.6 7 0 |
| S O CP E S int S. A. Ja R.L a cqu es |
lou To Fr se, anc e u |
- | 10 0, 0 0% |
Au d ite d No t |
in d W |
1 | ( 3 ) |
- | ( 44 ) |
( 46 ) |
| l ien de Sa S Eo AR L ne ug ueu se, |
l beu f, E Fra nce |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
1 | ( 23 ) |
- | ( 2) |
( 24 ) |
| S O CP E S S. A. R.L auv age on s |
To lou Fr u se, anc e |
- | 49 0 0% , |
KP MG |
W in d |
1 | ( 4) |
- | ( 16 ) |
( 18 ) |
| C.E Se S. A. S. gu r, |
is, Pa Fra r nce |
- | 10 0, 0 0% |
KP MG |
in d W |
1.6 15 |
( 13 4) |
- | 177 | 1.6 5 8 |
| Tru c L 'ho mm e |
Pa is, Fra r nce |
- | 10 0, 0 0% |
KP MG |
W in d |
3 8 |
( 3 ) |
- | ( 3 ) |
3 2 |
| Pa Eo l ien de Va im S AS rc r pre , |
E l beu f, Fra nce |
- | 10 0, 0 0% |
Ca b ine t E xco |
W in d |
37 | ( 1. 13 3 ) |
- | ( 7 5 3 ) |
( 1. 8 49 ) |
| Pa Eo l ien de s V ine S AS at rc s, |
E l beu f, Fra nce |
- | 10 0, 0 0% |
Ca b ine t E xco |
W in d |
37 | ( 1. 0 8 3 ) |
- | ( 67 0 ) |
( 1.7 17 ) |
| C ho do w W in d P k S P.Z O. O. ar |
Va óv ia, Po lan d rs |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
14 | ( 2) |
- | ( 16 ) |
( 3 ) |
| KI P W in d P k I SP .Z O. O. ar |
W Po lan d ars aw , |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
14 | ( 2) |
- | ( 13 ) |
( 1) |
| KI P W in d P k I I S P.Z O. O. ar |
W Po lan d ars aw , |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
22 | ( 8 ) |
- | 13 1 |
145 |
| Ne l ica Po ls ka SP Z. O. O. o |
W Po lan d ars aw , |
- | 10 0, 0 0% |
No d ite d t a u |
Ho l d ing |
139 | 1. 21 6 |
- | 5 3 |
1. 40 8 |
Appendix I Page 6 of 13
| ho d f T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| Re lax W in d P k I SP .Z O. O. ar |
W Po lan d ars aw , |
- | 9 3, 29 % |
No Au d ite d t |
W in d |
3 12 |
( 18 3 ) |
- | ( 21 2) |
( 8 2) |
| Re lax W in d P k I I S ar p. zoo |
W ars aw |
- | 5 1, 0 0% |
No d ite d t a u |
W in d |
123 | ( 3 2) |
- | ( 21 ) |
7 0 |
| Re lax W in d P k I II S P.Z O. O. ar |
Va óv ia, Po lan d rs |
- | 10 0, 0 0% |
No Au d ite d t |
W in d |
117 | ( 18 ) |
- | ( 16 ) |
8 4 |
| Re lax W in d P k I V Sp ar . zo o |
W Po lan d ars aw , |
- | 5 1, 0 0% |
No d ite d t a u |
W in d |
109 | ( 3 5 ) |
- | ( 142 ) |
( 69 ) |
| Re lax W in d P k V SP .Z O. O. ar |
W Po lan d ars aw , |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
142 | ( 21 ) |
- | ( 14) |
10 8 |
| lax in d P k V I S O. O. Re W P.Z ar |
lan d W Po ars aw , |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
14 | ( 1) |
- | ( 18 ) |
( ) 6 |
| SK in d P k S O. O. W P.Z ar |
lan d W Po ars aw , |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
14 | ( 2) |
- | ( 12) |
0 |
| So ko low in d P k S O. O. o W P.Z ar |
lan d W Po ars aw , |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
56 | ( 3 8 ) |
- | ( 11) |
7 |
| law in d P k I SP O. O. Zu W .Z ar y |
óv ia, lan d Va Po rs |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
14 | ( 4) |
- | ( ) 6 |
4 |
| lt ius du de ía léc ica En -Pr En E tr era o çao erg , S. A. |
is bo l L Po rtu n, ga |
- | 10 0, 0 0% |
MG KP |
in d W |
1. 5 0 5 |
2. 23 0 |
- | 1.6 44 |
5. 37 9 |
| En a-N En ías S. A. ern ov ov as erg , |
L is bo Po l rtu n, ga |
- | 10 0, 0 0% |
KP MG |
W in d |
7. 5 0 0 |
3 5. 3 44 |
- | 20 .7 5 4 |
6 3. 59 8 |
| Eó l ica de A lag S. A. oa , |
Ar s V l dev co a ez, l Po rtu ga |
- | 59 9 9% , |
KP MG |
W in d |
5 0 |
1.7 26 |
- | 3 5 3 |
2. 129 |
| Eó l ica de lo, da Mo L nte neg re |
i la de V Po uc a Ag iar Po l rtu u ga , |
- | 5 0, 10% |
MG KP |
in d W |
5 0 |
1. 39 7 |
- | ( 25 ) 9 |
1. 18 8 |
| Eó l ica da Se da A ltu rra s ras |
l Po Po rto rtu ga , |
- | 5 0, 10% |
MG KP |
in d W |
5 0 |
8 2 7 |
- | ( 136 ) |
69 6 |
| l ica ipe l L da Le En ía Eó Un te- van erg rso na , |
l Po Po rto rtu ga , |
- | 10 0, 0 0% |
KP MG |
in d W |
5 | 3 48 |
- | 9 5 5 |
1. 3 0 8 |
| Ma l ha d ize s-E ía ó l ica S. A. neg e , |
Po Po l rto rtu ga , |
- | 10 0, 0 0% |
KP MG |
W in d |
5 0 |
24 | - | 47 6 |
5 5 0 |
| in d Gr S. A. een w |
in- la- Lo Ne uv a uv e, Be lg ium |
- | 7 0, 0 0% |
d ite d No Au t |
in d W |
24 .9 96 |
( 7 3 8 ) |
- | ( 5 10 ) |
23 .7 48 |
| Ta n B V rca |
Am dam T he ste r m Ne her lan ds t |
- | 10 0, 0 0% |
KP MG |
Ho l d ing |
20 | 106 | - | ( 7 5 8 ) |
( 6 3 3 ) |
| Ce da Po r S RL rna vo we |
Bu har est c , ia Ru ma n |
- | 8 5, 0 0% |
No d ite d t a u |
W in d |
0 | ( 4) |
- | ( 5 46 ) |
( 5 5 0 ) |
Appendix I Page 7 of 13
| ho T us |
d f Eu an o ro |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| Re io Po r S RL vat no we |
Bu har est c , ia Ru ma n |
- | 8 5, 0 0% |
No d ite d t a u |
W in d |
0 | ( 3 ) |
- | ( 40 9 ) |
( 41 2) |
| O O G C H RI Z N W IN D EN ER Y, LL |
S A Te U xa s, |
10 0, 0 0% |
MG KP |
l d ing Ho |
2.7 5 1. 27 7 |
( 11. 57 8 ) |
- - |
( 5 1.7 11) |
2.6 87 .9 8 8 |
|
| W in d T b ine Pr heu LP et ur om s, |
Ca l i for ia, U S A n |
- | 10 0, 0 0% |
KP MG |
W in d |
( 40 8 ) |
( 3 ) |
- | ( 1) |
( 41 2) |
| D ic k ins Co W in d F LL C ty on un arm |
M inn U S A ta, eso |
- | 10 0, 0 0% |
KP MG |
W in d |
0 | 0 | - | ( 7 0 ) |
( 7 0 ) |
| l ing in d F C Da W LL ton r arm , |
inn S A M U ta, eso |
- | 10 0, 0 0% |
MG KP |
in d W |
0 | 0 | - | ( 5 ) |
( 5 ) |
| C lou d Co W in d F ty un arm |
Ka U S A nsa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
23 5.7 25 |
( 0 ) |
- | 79 | 23 5. 8 0 4 |
| h ite in d P ha ing C W W LL sto ne urc s , |
S A Te U xa s, |
- | 10 0, 0 0% |
MG KP |
in d W |
0 | 0 | - | 10. 3 5 7 |
10. 3 5 7 |
| lue Ca in dp LC B W II L ny on ow er |
O k la ho S A U ma , |
- | 10 0, 0 0% |
MG KP |
in d W |
16 3. 140 |
1. 3 0 4 |
- | 4. 41 4 |
16 8. 8 5 8 |
| lue Ca in dp C B W V, LL ny on ow er |
O k la ho S A U ma , |
- | 10 0, 0 0% |
MG KP |
in d W |
0 | 0 | - | ( 19 ) |
( 19 ) |
| izo in d E ion l Ho n W In ter nat r ner gy a |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
in d W |
4. 0 89 |
9 8 |
- | 89 | 4. 27 6 |
| ion ir ie W in d F P Pr I, LL C eer a arm |
Iow U S A a, |
- | 10 0, 0 0% |
KP MG |
in d W |
39 6. 57 0 |
8.9 6 1 |
- | 59 5 |
40 6. 126 |
| bru h P Sa Pa LL C rtn ge s ow er ers , |
h ing W U S A ton as , |
- | 10 0, 0 0% |
KP MG |
in d W |
0 | 0 | - | ( 13 ) |
( 13 ) |
| Te loc t W in d P Pa LL C rtn ase ow er ers , |
Or U S A ego n, |
- | 10 0, 0 0% |
KP MG |
W in d |
9 0. 8 5 4 |
1. 3 19 |
- | 3.9 3 8 |
96 11 1 |
| H ig h T i l W in d F LL C ra arm , |
I l l ion is, U S A o |
- | 10 0, 0 0% |
KP MG |
W in d |
3 3 0. 107 |
( 16 5 ) |
- | 4. 29 2 |
3 3 4. 23 4 |
| C ho lat e B u W in dp I, LP co ayo ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
2. 47 1 |
0 | - | ( 17 1) |
2. 3 0 0 |
| Ma b le R ive LL C r r, |
Ne Yo k, U S A w r |
- | 10 0, 0 0% |
KP MG |
W in d |
13. 41 7 |
( 1) |
- | ( 76 ) |
13. 3 40 |
| Ra i l S l itte p r |
I l l ion is, U S A o |
- | 10 0, 0 0% |
KP MG |
W in d |
0 | 0 | - | ( 17 2) |
( 17 2) |
| B lac kst e W in d F LL C on arm , |
I l l ion is, U S A o |
- | 10 0, 0 0% |
KP MG |
W in d |
0 | 0 | - | ( 3 ) |
( 3 ) |
| Ar k W in d E LL C sto oo o ner gy |
Ma ine U S A , |
- | 10 0, 0 0% |
KP MG |
W in d |
9 0 4 |
( 4) |
- | ( 5 5 ) |
8 45 |
| Jer ic ho R ise W in d F LL C arm |
Ne Yo k, U S A w r |
- | 10 0, 0 0% |
KP MG |
W in d |
1. 15 0 |
( 2) |
- | ( 23 ) |
1. 125 |
| Ma d iso n W in dp LL C ow er |
Ne Yo k, U S A w r |
- | 10 0, 0 0% |
KP MG |
W in d |
7. 59 1 |
3 1 |
- | ( 18 3 ) |
7. 43 9 |
| Me ite W in d, LL C squ |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
20 1. 19 3 |
1. 06 5 |
- | 5.9 7 2 |
20 8. 23 1 |
Appendix I Page 8 of 13
| T | ho us |
d f Eu an o ro |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| Ma ins da le W in d F LL C rt arm |
Co lor do U S A a , |
- | 10 0, 0 0% |
KP MG |
W in d |
2. 29 7 |
( 0 ) |
- | ( 2) |
2. 29 5 |
| Po Oa k W in d, LL C st |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
25 0.9 7 5 |
9 9 |
- | 4.9 3 2 |
25 6. 0 0 5 |
| BC M le R i dg e W in d L LC ap |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
3 49 10 .6 |
9. 7 21 |
- | ( 3. 16 2) |
3 56 169 |
| H ig h P ir ie W in d F II LL C ra arm , |
M inn U S A ta, eso |
- | 10 0, 0 0% |
KP MG |
W in d |
9 1. 3 0 4 |
76 8 |
- | 79 3 |
9 2. 86 5 |
| Ar l ing W in d P Pro jec t L LC ton ow er |
Or U S A ego n, |
- | 10 0, 0 0% |
KP MG |
W in d |
13 3.7 87 |
( 5 ) |
- | 28 9 |
13 4. 07 1 |
| S ign l H i l l W in d P jec LC Pro t L a ow er |
Co lor do S A U a , |
- | 10 0, 0 0% |
MG KP |
in d W |
( 17 ) |
( 0 ) |
- | ( 2) |
( 19 ) |
| b lew d W in d P jec LC Tu Pro t L m ee ow er |
Co lor do S A U a , |
- | 10 0, 0 0% |
MG KP |
in d W |
( 1) |
( 1) |
- | ( 1) |
( 4) |
| O l d T i l W in d F C LL ra arm , |
l l ion is, S A I U o |
- | 10 0, 0 0% |
MG KP |
in d W |
20 8.7 9 9 |
3. 107 |
- | ( 2. 8 89 ) |
20 0 17 9. |
| ien Gr de in d P jec LC V W Pro t L to an ow er |
Co lor do S A U a , |
- | 10 0, 0 0% |
MG KP |
in d W |
19 6 |
0 | - | ( 8 ) 6 |
5 5 0 |
| OP Q C Pro LL ty per |
l l ion is, S I U A o |
- | 10 0, 0 0% |
MG KP |
in d W |
13 | 11 | - | 10 | 3 3 |
| do ke in d F Me w L W LL C a a arm , |
d ian In U S A a, |
- | 10 0, 0 0% |
KP MG |
in d W |
0 | 0 | - | ( 22 0 ) |
( 22 0 ) |
| he f ie l d W in d P jec W Pro LL C at t, ow er |
Or U S A ego n, |
- | 10 0, 0 0% |
KP MG |
in d W |
0 | 0 | - | 67 | 67 |
| 0 07 V o I LL C ent |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
9 59 .9 8 2 |
( 23 2) |
- | 1. 48 8 |
96 1. 23 7 |
| 0 07 V o I I ent |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
6 41 .9 3 1 |
( 0 ) |
- | ( 6 5 3 ) |
6 41 27 8 |
| 0 0 8 V o I II ent |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
76 6. 0 8 2 |
0 | - | 0 | 76 6. 0 8 2 |
| Ho izo n W in d V s I LL C ent r ure |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
5 8 1.9 6 0 |
11. 6 0 8 |
- | 10. 41 8 |
6 0 3.9 8 5 |
| Ho izo n W in d V s II LL C ent r ure , |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
6 41 .9 3 1 |
25 3 |
- | 7. 26 2 |
6 49 44 6 |
| Ho izo n W in d V s II I, LL C ent r ure |
Te U S A xa s, |
- | 10 0, 0 0% |
KP MG |
W in d |
76 6. 0 8 2 |
0 | - | 0 | 76 6. 0 8 2 |
| C l int Co W in d F LL C ty on un arm , |
Ne Yo k, U S A w r |
- | 10 0, 0 0% |
KP MG |
W in d |
10. 7 8 5 |
( 5 ) |
- | 0 | 10. 7 8 0 |
| BC 2 M le R i dg e H l d ing s L LC ap o |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| C lou d W W in d P jec LL C est t, ro |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| F ive -Sp LL C ot, |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d C ho lat e B u I LL C r co ayo |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| A la bam dg in d F C a L e W LL e arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
Appendix I Page 9 of 13
| ho d f T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| An lop e R i dg e W in d P Pro jec t L LC te ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ar kw ig ht Su it W in d F LL C r mm arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| As h for d W in d F LL C arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| At hen a-W W in d P Pro jec t L LC est on ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| B lac k P ir ie W in d F LL C ra arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| lac kst in d F C B e W II LL on arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| lac kst in d F C B e W III LL on arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| lac kst in d F C B e W IV LL on arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| lac kst in d F C B e W V LL on arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| lue Ca in dp C B W III LL ny on ow er |
S Te U A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| lue in dp B Ca W IV LL C ny on ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| lue in dp B Ca W VI LL C ny on ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| Br d lan ds W in d F II LL C oa arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Br d lan ds W in d F III LL C oa arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Br d lan ds W in d F LL C oa arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| C hat R ive r W in d F LL C eau gay arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Cr R i dg e W in d F LL C op sey arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Cr ing Tr i ls W in d, Po r P jec t L LC oss a we ro |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Da iry H i l ls W in d F LL C arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| D iam d P Pa LL C rtn on ow er ers |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ea C l ic k ita t W in d P Pro jec t L LC st ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Fo d W in d F LL C r arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Fre rt W in dp I, LP epo ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
Appendix I Page 10 of 13
| ho d f T Eu us an o ro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f i t o |
|||||||||
| Su bs i d iar ies Co ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| Gu l f C st W in dp Ma ent oa ow er nag em Co C LL mp any , |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| d W in d F C Ho LL ste me a arm |
S Te U A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| izo in d E hw Ho n W N V II L LC ort est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| Ho izo n W in d E N hw X LL C ort est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E N hw X I L LC ort est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E Pa han d le I L LC r ner gy n |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E So hw I L LC ut est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E So hw II LL C ut est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E So hw III LL C ut est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E So hw IV LL C ut est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E V l ley I L LC r ner gy a |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d M RE C I a P s L LC art r ow ner |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d, Fre rt W in dp I L LC r epo ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Jun ipe r W in d P Pa LL C rtn ow er ers , |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| ing C hen in d F C Le W LL ton oa arm x |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| h ias in d F C Ma W LL c arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| do ke in d F C Me w L W II LL a a arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| i l W in d F C Ne Tr LL w a arm |
S Te U A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| h S in d F No .L. e W LL C rt op arm |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| ber ine in d F C Nu N W LL m arm |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| Pa i f ic So hw W in d F LL C ut est c arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| P ion Pr ir ie W in d F II LL C eer a arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| im k P R Ro Pa LL C rtn c ow er ers |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| f ho d T Eu us an o ro Pr |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne t |
f i t o |
|||||||||
| Su Co bs i d iar ies ies m p an |
He d a O f f ice |
% D ire t c |
% In d ire t c |
Au d i to r |
Ac iv i t ty |
S ha re Ca i l ta p |
Re se rv es |
Ex tra or |
To l ta |
To l ta Eq i ty u |
| Sa d d le bac k W in d P jec LC Pro t L ow er |
S Te U A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| d in ia W in dp Sa LL C r ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| le k W in d F Tu Cr LL C rt ee arm |
Te U S A xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| We Tra i l W in d P jec t I LL C ste rn ro |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| W h ist l ing W in d W I E Ce LL C nte ner gy r, |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| S im n R i dg e W in d F LL C pso arm |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Co Cu W in d P Pro jec t L LC os rry ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E M i dw IX LL C est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E N hw I L LC ort est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Ho izo n W in d E N hw X V LL C ort est r ner gy |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Pe Po r P s L LC ter art son we ner |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| P ion Pr ir ie Int ion LL C t eer a erc on nec |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| T he No k W in d P Pro jec t L LC o ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| Tu H i l l W in dp LL C g ow er |
Te U S A xa s, |
- | 10 0, 0 0% |
No d ite d t a u |
W in d |
- | - | - | - | - |
| h is key i dg C W R e P Pa LL rtn ow er ers |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| i lso n C k P C W Pa LL rtn ree ow er ers |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| Co C WT P M LL ent ana gem mp any |
S A Te U xa s, |
- | 10 0, 0 0% |
d ite d No t a u |
in d W |
- | - | - | - | - |
| ÁV ED P R EN O V EI S BR A S IL |
Sã lo, i l o P Br au az |
5 5, 0 0% |
- | d ite d No Au t |
l d ing Ho |
- | - | - | 1 -6 |
1 -6 |
| Th nd f E ou nsa o ur o |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ne Pr t |
f it o |
|||||||||
| int Co it ies Jo ly lle d En ntr t o |
O f f ice He d a |
% D ire ct |
% Ind ire ct |
Au ito d r |
Ac iv ity t |
S ha re Ca ita l p |
Re ser ves |
Ex tra or |
To l ta |
To l ta Eq ity u |
| lat k in dp F Ro W L L C c ow er |
k, Ne Yo U S A w r |
- | 5 0, 0 0 % |
E & Y |
in d W |
5 3 7 7. 8 1 |
( 3 1. 1 1 8 ) |
- | 5. 0 6 1 |
5 5 3 1. 2 4 |
| F lat Ro k W in dp I I L L C c ow er |
Ne Yo k, U S A w r |
- | 5 0, 0 0 % |
E & Y |
W in d |
1 4 9. 0 6 0 |
( 1 3. 1 5 5 ) |
- | 2. 9 6 8 |
1 3 8. 8 7 4 |
| Co ñ ía E ó l ica Ar S. A. mp a ag on esa , |
Za Sp in rag oz a, a |
- | 5 0, 0 0 % |
De lo itte |
W in d |
6. 7 0 1 |
2 8. 2 0 1 |
- | 1 4. 2 3 4 |
4 9. 1 3 6 |
| De l los En ico Ca ios S. A. et sar ro erg s na r |
La Pa lm s as, in Sp a |
- | 3 9, 9 2 % |
K P M G |
W in d |
1 5 |
( 2 5 ) |
- | 0 | ( 1 0 ) |
| luc i ón 2 0 0 0, S. Ev L. o |
A l ba Sp in te, ce a |
- | 3 3 2 9, % |
G K P M |
in d W |
1 1 8 |
8. 2 8 1 |
- | 4. 0 6 6 |
1 2. 4 5 6 |
| Ho M d ioa b ien l, S. A. rta ta e m |
M dr i d, Sp in a a |
- | 4 0, 0 0 % |
No Au d ite d t |
W ast e |
6 0 |
( 1 7 3 ) |
- | ( 0 ) |
( 1 1 3 ) |
| be l lar b ica I E. So I ér rso |
lm in A ía, Sp er a |
- | 4 0, 0 0 % |
K P M G |
lar So |
6 5 |
0 | - | 0 | 6 5 |
| ias l- lar ica M 1 So T érm urc o |
lm in A ía, Sp er a |
- | 4 0, 0 0 % |
K P M G |
lar So |
3 | 0 | - | 0 | 3 |
| ba l ica Te E ó S. A. r , |
in Cu Sp en ca a , |
- | 4 0, 0 0 % |
d it, Au S. L. |
in d W |
4. 7 2 0 |
1. 6 9 5 |
- | 3. 6 5 7 |
1 0. 0 7 2 |
| Th ou |
f E nd nsa o |
ur o |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| As iat Co ies soc e mp an |
Ne t |
Pr f it o |
||||||||
| He d a O f f ice |
% ire D ct |
% ire Ind ct |
Au ito d r |
Ac iv ity t |
S ha re Ca ita l p |
Re ser ves |
Ex tra or |
To ta l |
To l ta ity Eq u |
|
| iom de l ir ine S. B P A. asa s o, |
Sp in Hu esc a, a |
- | 2 4, 0 0 |
d ite d No Au t |
iom B ass |
4 5 5 |
( 4 8 ) |
- | ( 1 ) 6 9 |
2 3 8 |
| lt ivo ét ico de i l la, Cu En Ca S. A. st s erg s |
in Bu Sp rg os a , |
- | 2 4, 0 0 |
d ite d No Au t |
iom B ass |
3 0 0 |
( 2 3 8 ) |
- | 1 9 1 |
5 2 2 |
| l los l ico de ias De E ó Ca S. A. sar ro s na r , |
lm La Pa s as, Sp in a |
- | 3 5, 8 0 |
K P M G |
in d W |
4. 2 9 1 |
3. 8 3 3 |
- | 1. 3 8 8 |
9. 5 1 2 |
| i dro S. A. H ast ur , |
Ov ie do Sp in a , |
- | 2 0, 0 0 |
Ce ium nt |
in i hy dra l ic M u |
4. 8 0 8 |
3. 2 5 7 |
- | 3 6 7 |
8. 4 4 9 |
| ía, S. Na En L. tur ne o erg |
i l ba Sp in B o, a |
- | 4 0 1 9, |
d ite d No t a u |
in d W |
3 | 0 | - | ( 1 ) |
2 |
| ó l ico lm S. Pa E Be A. te, rq ue on |
dr i d, Sp in M a a |
- | 2 3, 2 9 |
G K P M |
in d W |
1 2 0 |
2. 4 1 3 |
- | 2. 5 4 1 |
5. 0 5 7 |
| l ico ier de l de Pa E ó S M S. A. rq ue ra a ro , |
ia, in So Sp r a |
- | 3 3, 6 0 |
Er & Yo t ns un g |
in d W |
7. 1 9 4 |
1. 8 1 2 |
- | 3. 9 8 0 |
1 2. 9 8 6 |
| l ico lto de l lto Pa E ó A Vo S. A. rq ue s y a, |
dr i d, in M Sp a a |
- | 2 4, 8 0 |
K P M G |
in d W |
6. 4 4 5 |
3. 0 0 9 |
- | 2. 4 5 1 |
1 1. 9 0 5 |
| So de S. L. co an , |
Se i l la, Sp in v a |
- | 4 0, 0 0 |
No d ite d t a u |
W in d |
6 | ( 9 ) |
- | - | ( 3 ) |
| So lar S ig lo X X I, S. A. |
C iu da d Re l, a Sp in a |
- | 2 0, 0 0 |
No Au d ite d t |
So lar |
8 0 |
( 1 1 ) |
- | ( 7 ) |
6 2 |
| É O O C A S O G A E N E P - L I D E P R T U L, S. A. |
is bo l L Po rtu a, g a |
- | 1 0 9, 6 |
M az ars |
in d W |
5. 0 0 0 |
2 8. 3 4 7 |
- | ( 2 5 8 ) |
3 3. 0 8 9 |
(Expressed in thousands of Euros)
| ASSETS | 31 Dec 2007 |
|---|---|
| ASSETS | |
| Investments | 3,265,090 |
| Investments in group companies | 1,901,196 |
| Loans to Group Companies | 1,387,347 |
| Provisions | (23,453) |
| 3,265,090 | |
| CURRENT ASSETS | |
| Trade receivables | 11 |
| Public entities | 11 |
| Current investments | 443,332 |
| Loans to Group companies | 438,827 |
| Accrued interest receivable | 4,505 |
| Cash | 15 |
| 443,358 | |
| TOTAL ASSETS | 3,708,448 |
| LIABILITIES | 31 Dec 2007 |
|---|---|
| QUITY | |
| Share capital | 18,873 |
| Share premium | 1,882,338 |
| Loss for the year | (23,520) |
| 1,877,691 | |
| DEFERRED INCOME | |
| Unrealised exchange gains | 37,836 |
| 37,836 | |
| LIABILITIES – NON-CURRENT | |
| Group companies – non-current | 1,358,604 |
| 1,358,604 | |
| LIABILITIES - CURRENT | |
| Group companies - current | 434,240 |
| Trade payables | 77 |
| 434,317 | |
| TOTAL LIABILITIES | 3,708,448 |
This appendix forms an integral part of Note 23.a.
Appendix II
| EXPENSE | 2007 |
|---|---|
| EXPENSES | |
| Other operating expenses | 67 |
| External services | 67 |
| Finance expense | 4,505 |
| Group companies | 4,505 |
| Net finance income | - |
| Losses from investments in securities | 23,453 |
| Income tax | - |
| INCOME | 2007 |
|---|---|
| INCOME | |
| Operating losses | 67 |
| Finance income form loans to Group Companies | 4,505 |
| Net finance expense | - |
| Losses on ordinary activities | 67 |
| Net extraordinary expense | 23,453 |
| Loss before income tax | 23,520 |
| Loss for the year | 23,520 |
This note forms an integral part of 23.a.
| ASSETS | 31 Dec 2007 |
|---|---|
| ASSETS | |
| Intangible assets | 600,977 |
| Property, plant and equipment | 1,266,318 |
| Investments | 2,408,290 |
| 4,275,585 | |
| CURRENT ASSETS | |
| Inventories | 54,909 |
| Receivables | 164,789 |
| Current investments | 3,990 |
| Own shares | 4,809 |
| Cash | 5,039 |
| Prepayments | 6,123 |
| 239,659 | |
| TOTAL ASSETS | 4,515,244 |
| LIABILITIES | 31 Dec 2007 |
|---|---|
| EQUITY | |
| Share capital | 421,740 |
| Share premium | 1,198,704 |
| Reserves | 30,355 |
| Loss for the year | 46,545 |
| 1,697,344 | |
| DEFERRED INCOME | 11,550 |
| PROVISIONS FOR LIABILITIES AND CHARGES | 249,346 |
| TRADE PAYABLES – NON-CURRENT | 1,760,176 |
| TRADE PAYABLES - CURRENT | 796,828 |
| TOTAL LIABILITIES | 4,515,244 |
Appendix V Page 1 of 3
| Name of the Board member | Name of the company | Position |
|---|---|---|
| Antonio Luís Guerra Nunes Mexía | EDP Energías de Portugal, S.A. | Chairman of the Board of Directors |
| Energías do Brasil, S.A. | Chairman of the Board of Directors | |
| EDP Energías de Portugal, S.A. Sucursal en España |
Representative | |
| EDP Finance, B.V. | Representative | |
| Ana María Machado Fernandes | EDP Energías de Portugal, S.A. | Member of the Board of Directors |
| Energías do Brasil, S.A. | Member of the Board of Directors | |
| Nuevas Energías de Occidente, S.L. | Chairman of the Board of Directors | |
| Horizon Wind Energy, LLC | Member of the Board of Directors | |
| EDP Energías de Portugal, S.A. Sucursal en España |
Representative | |
| EDP Finance, B.V. | Representative | |
| Hidroeléctrica del Cantábrico, S.A. | Member of the Board of Directors | |
| ENEOP – Eólicas de Portugal, S.A. | Chairman of the Board of Directors | |
| Antonio Fernando Melo Martins da Costa | EDP Energías de Portugal, S.A. | Member of the Board of Directors |
| Nuno María Pestana de Almeida Alves | Balwerk – Consultadoria Económica e Participaçoes, S.U. Lda. |
Managing Director |
| Electricidade de Portugal Finance Company Ireland, Lt. |
Director | |
| EDP – Energias de Portugal, S.A. | Member of the Board of Directors and Chief Financial Officer |
|
| EDP Energías de Portugal, S.A. Sucursal en España |
Representative | |
| EDP – Investimentos, Gestao de Participaçoes e Assitencia Técnica, Lda. |
Member of the Board of Directors | |
| EDP Energias do Brasil, S.A. | Member of the Board of Directors | |
| EDP Imobiliária e Participaçoes, S.A. | Chairman of the Board of Directors | |
| Sávida Medicina Apoiada, S.A. | Chairman of the Board of Directors | |
| SCS Servicios Complementares de Saúde, S.A. | Chairman of the Board of Directors | |
| EDP Valor – Gestao Integrada de Serviços, S.A. |
Chairman of the Board of Directors | |
| Energia RE, S.A. | Chairman of the Board of Directors | |
| EDP Finance, B.V. | Representative | |
| Hidroeléctrica del Cantábrico, S.A. | Member of the Board of Directors | |
| Horizon Wind Energy, LLC | Member of the Board of Directors |
Appendix V Page 2 of 3
| Name of the Board member | Name of the company | Position |
|---|---|---|
| MRH Mudança e Recursos Humanos, S.A. | Chairman of the Board of Directors | |
| EDP Estudos e Consultoria, S.A. | Chairman of the Board of Directors | |
| EDP Gás III, S.G.P.S., S.A. | Member of the Board of Directors | |
| EDP Investimentos, S.G.P.S., S.A. | Member of the Board of Directors | |
| João Manuel Manso Neto | Naturgas Energía Grupo, S.A* | ViceChairman of the Board of Directors |
| Eléctrica de la Ribera del Ebro, S.A.* | Chairman of the Board of Directors | |
| HidroCantábrico Energía, S.A.U.* | Chairman of the Board of Directors | |
| HidroCantábrico Gestión de Energía, S.A.U.* | Board of Directors Sole member | |
| EDP Energías de Portugal, S.A. | Member of the Board of Directors | |
| EDPGestao da Produçaco de Energía, S.A. | Chairman of the Board of Directors | |
| EDP Gás S.G.P.S., S.A. | Chairman of the Board of Directors | |
| EDP Gás II S.G.P.S., S.A. | Chairman of the Board of Directors | |
| EDP Gás III S.G.P.S., S.A. | Chairman of the Board of Directors | |
| EDP Investimentos S.G.P.S., S.A. | Chairman of the Board of Directors | |
| EDP Gás GPL - Comércio de Petróleo Liquefeito, S.A. |
Chairman of the Board of Directors | |
| EDP Finance, B.V. | Representative | |
| Hidroeléctrica del Cantábrico, S.A. | Chief Executive Officer and ViceChairman of the Board of Directors |
|
| EDP Energías de Portugal, S.A. Sucursal en España |
Representative | |
| Operador del Mercado Ibérico de Energía – Polo Español, S. A. |
Chairman of the Board of Directors | |
| Antonio do Pranto Nogueira Leite | EFACEC Capital, SGPS, S.A. | Member of the Board of Directors |
| Manuel Menéndez Menéndez | Naturgas Energía Grupo, S.A.* | Chairman of the Board of Directors |
| Nuevas Energías de Occidente, S.L.* | Member of the Board of Directors | |
| Hidroeléctrica del Cantábrico, S.A. | Chairman of the Board of Directors | |
| Enagas, S.A. | Representative of an entity in the Board of Directors |
|
| João José Belard da Fonseca Lopes Raimundo |
Fomentinvest, SGPS, S.A. | Member of the Board of Directors |
| Name of the Board Member | Company name | Number of shares |
|---|---|---|
| Antonio Luís Guerra Nunes Mexía | EDP Energías de Portugal, S.A. | 1.000 |
| João Manuel Manso Neto | EDP Energías de Portugal, S.A. | 1.268 |
| João José Belard da Fonseca Lopes Raimundo |
REN Redes Energéticas Nacionais, SGPS, S.A. |
150 |
| Nuno María Pestana de Almeida Alves | EDP Energías de Portugal, S.A. | 40 |
| Jorge Manuel Azevedo Henriques dos Santos |
EDP Energías de Portugal, S.A. | 2.379 |
Full year of 2008 (12 months ending December 31st, 2008)
EDP Renováveis S.A. individual accounts refer to the Holding of EDP Renováveis Group (EDPR), which includes (apart from EDPR Holding) its subsidiaries EDPR Europe (Nuevas Energias do Ocidente S.L.), EDPR North America (Horizon Wind Energy, LLC) and EDPR South America (EDP Renováveis Brasil). This management report will focus on financials and 2008 activity of "EDPR Holding" as well as its subsidiaries in each of the supra-mentioned platforms. Therefore, the report describes both the Holding and EDPR Group' business and activity during the year of 2008. Financial accounts for EDPR Holding are presented according to Spanish local GAAP ("Plan General de Contabilidad", in all material aspects similar to IFRS), while EDPR Group consolidated financial info were prepared according to IFRS. The current management report addresses both EDPR Holding and EDPR Group.
On June 4th, EDP Renováveis, S.A. ("EDPR") started trading on NYSE Euronext's Lisbon market under the ticker symbol "EDPR" following its successful spin-off from EDP Group (NYSE Euronext: EDP). The EDPR IPO raised a total of €1.566 billion/\$2.42 billion in global proceeds, representing the largest IPO launched in Western Europe during 2008.
Priced at €8.00 (eight Euros) per share – midway between the offering price range of €7.40 to €8.90 per share – the Public Subscription Offer was oversubscribed by 87.9 times the total amount of 45,085,590 shares1 . The institutional offer had a demand of 6.1 times the total amount of
1 Including greenshoe
180,342,362 shares. These combined shares make up 22.5% of EDPR, with EDP maintaining majority ownership of the other 77.5% of the company.
The proceeds of the Offering are being used to finance EDPR's growth plans, including the execution of its portfolio of wind projects to meet the target of consistently increasing its portfolio of installed wind capacity to more than 10.5 GW by 2012.
In challenging financial markets, the success of the IPO clearly demonstrates the high regard investors have for EDPR as the fastest growing pure-play among the world's largest global renewables companies, with first class assets and strong track record in execution. EDPR welcomes all new shareholders and looks forward to rewarding their confidence as the organization delivers on the growth strategy and pipeline. EDPR ended up 2008 ranking #4 in the Euronext's Lisbon market with a total capitalization of €4.4 billion.
On February 14th, EDPR acquired from Hydra Wind, LLC six development projects in the USA totalling 1,050MW. The six projects are located in Illinois, Indiana, and Ohio, within the regional transmission systems of PJM and MISO. This acquisition supports consolidation of EDPR's leadership in Illinois, where EDPR owns and operates the 396MW Twin Groves wind farm - the largest wind farm east of the Mississippi River. The acquisition also strengthens the EDPR pipeline in Indiana and Ohio, where EDPR is the developer with the largest pipeline. All projects will be regionally managed by the Great Lakes Regional Development office, located in Bloomington, Illinois.
Noteworthy, although unrelated with the transaction, is the favourable advance on the regulatory front, since last May Ohio enacted its first Alternative Energy Resource Standard, mandating Ohio utilities to have at least 12.5% of their generation coming from renewable energy by 2025.
On April 7th, EDPR acquired French wind assets from EOLE 76 complementing the French wind assets with, at the time of the transaction, 35MW in operation, 8MW under construction, 258MW in pipeline and 595MW in prospective stage. Of the pipeline projects, 13MW have all the necessary authorizations to start construction and are expected to enter operation between 2009 and 2010.
Construction licenses have been submitted for additional 43MW. The total amount of the transaction summed up to €54.9 million.
The 35MWs in operation - the "Pays de Bray" complex in Normandy - came online in the second quarter of 2008 and provides electricity for the annual consumption of approximately 90,000 people. The original EOLE 76 development team will stay responsible for the projects, and will be working jointly with the rest of the EDPR development team in France.
On June 11th, EDPR made a move towards the Brazilian market, establishing a subsidiary "EDP Renováveis Brasil", owned 55% by EDPR and 45% by Energias do Brasil (EDP Group company). At the same time, EDP Renováveis Brasil agreed to acquire 100% of the share capital of CENAEEL – Central Nacional da Energia Eólica S.A. for R\$51 million (enterprise value). This transaction was closed in February 2009 and includes a total portfolio of 84 MW in various stages of maturity.
On October 17th, EDPR enters the Romanian market by acquiring 85% of Renovatio Power SRL and Cernadova Power SRL, which owned several wind projects in prime locations, totalling 736MW in different stages of maturity: i) 225 MW classified as Tier 1 (ready to build on the short term); ii) 60 MW of projects rated as Tier 2; iii) 462 MW of Tier 3 and Prospects. The total acquisition price amount to €64.4 million, including success fees to be paid as wind projects reach certain predefined milestones.
On January 2nd, EDPR closed a \$600 million transaction Institutional Investors Partnership in the USA. The agreement with the institutional equity investors GE Energy Financial Services and Wachovia Investment Holdings relates with 2007 and 2008 wind farm projects.
On December 29th, EDPR establishes a new Investors Partnership for the investment in 2008 wind projects in the USA. The agreement is closed with JP Morgan Capital Co and New York Life Insurance Group for a portfolio of \$265 million worth.
On January 20th, 2009 EDPR announced to reach a total portfolio of gross MW in operation in excess of 5.0GW. This corresponds to an additional gross installed capacity of 1,413MW during 2008, fully accomplishing its yearly defined target upon the IPO of cc 1.4GW. Total generated output reached 7.8GW, which corresponds to a 78% increase vs. 2007.
EDPR Holding closed the year of 2008 with €6.6 billion in assets, mainly due to investments in its associates of €3.6 billion and loans to affiliated and group companies of €2.6 billion. Total equity reached €5.6 billion providing evidence of the robust EDPR Holding capital structure with Equity over Total Assets surpassing 85%. Liabilities amounted, by year-end, to €962 million (for the great part a result of €868 million in shareholder loans with EDP Group companies).
The operating results (which were equal to EBITDA) totalled (€7.2) millions driven by personnel costs as well as a variety of management fees due to the outsourcing of key operating and management functions.
Financial results totalled €114 million as proceeds from IPO and capitalization of group debt provided enough liquidity that enabled EDPR Holding to finance the capital investment requirements of its subsidiaries. These financial results are the net of €128 million in financial income (out of the €2.6 billion loans to its subsidiaries and group companies, as of 2008 year-end) and €13 million of financial expenses.
Effective tax rate was 30% on €107 million Earnings before Taxes, leading to a 2008 Net Income of €75 million.
3 Prepared according to Spanish local GAAP ("Plan General de Contabilidad")
During the year of 2008, EDPR added 1,413MW of gross installed capacity, fully achieving its yearly target of 1.4GW defined upon the IPO and leading to a total portfolio of assets in operation in excess of 5.0GW. In terms of total output, EDPR recorded a significant growth in electricity generation ending 2008 with 7.8TWh (78% or 1.8 times increase vs. 2007), mainly a result of increased installed capacity.
On top of the 1,413MW of new installed capacity, EDPR ended the year with 769MW under construction (of which 569MW in Europe and 199MW in North America) which represents a significant carry forward of capacity into 2009 (standing for more than 50% of the previously mentioned yearly target) and, most notably, provides clear of the organization's ability to manage more than 2.2GW of construction throughout the year5 .
Total revenues reached €532 million driven by higher installed capacity as well as attractive selling prices in Europe and stable PPA conditions in the North American portfolio.
Focus on operational efficiency, with Other Operating Income / (Expenses) amounting to (€82) million, lead to an EBITDA of €437.8 million.
Net Financial Results in 2008 were (€77.2) million (benefiting from cash proceeds from IPO and capitalization of EDP Group debt) and Net Income totalled €112.2 million, of which €104.4 million is attributable to EDPR equity holders and €7.9 million belong to minority interest.
Excellence in operational performance is best reflected in the sustainable high availability levels in Europe (97%, in line 2007) and a significant improvement in availability in North America operations (from 90% in 2007 to a full year average of 94%, with 96% performance level during 4th quarter of 2008).
Volatile quarterly wind conditions, with a particularly low 3rd quarter, lead to a load factor in Europe of 26% in line with mark of 2007 and consistent with the historical premium towards the market6 (e.g., EDPR's assets in Spain recorded a load factor of 25,7%, cc. 200 bps premium compared to market), underlining the quality of EDPR' assets. In North America, load factor reached a significant
4 Prepared according to IFRS accounting standard. Comparison with prior year not presented since 2007 audited accounts reflect only the period of December 4th to December 31st, 2007 5
Totalling 2008 additions plus capacity under construction by year-end 6
Currently only Spanish market data is available comparison using official sources (REE)
34%, considerably higher than prior year mark of 30% mainly resulting from new additions to US portfolio and particularly strong 4th quarter winds.
Throughout the year of 2008, EDPR invested about €2.2 billion as capital expenditures (including M&A transactions) and used the €1.6 billion cash proceeds from the IPO and the €1.3 billion from the capitalization of EDP shareholder loans to reach a year-end Net Debt of approx. €1.1 billion7 . This resulted in a solid Net Debt / EBITDA ratio of 2.44x. Future growth is anticipated to be financed mainly through shareholder loans with EDP parent company.
EDPR continues to look to the renewable energy sector with a long-term outlook, believing that the environmental, economic and technological trends that have underpinned the current favourable renewable energy market conditions will continue to drive further support for and growth in the markets we are active in.
EDPR is a leading 'pure-play' renewable energy company, having derived the revenue stream from renewable energy activity. EDPR has leading position and "early mover" advantages in attractive high-growth markets, and continues to analyze new markets and new opportunities within the markets we currently operate within.
EDPR has a solid history of executing projects and delivering targets. We consistently increased gross installed capacity by surpassing the 2006-2008 targets. The combination of diversified operations with a stable revenue base spread across countries with favourable regulatory regimes limits the exposure to market prices of electricity and provides a significant visibility and stability. EDPR's asset portfolio is well-balanced, in terms of geography and stages of development. In addition, EDPR is actively engaged in expanding our activities into other geographies.
EDPR is positioned to deliver on significant and superior growth targets and achieve over 10.5GW in operating assets by 2012. For that, by year-end 2008, EDPR has crafted a robust, visible and geographically diverse pipeline in excess of 28.2GW worldwide (varying from projects in nineteen US states to regions of Brazil and different European countries).
This aggressive medium term targets will reinforce EDPR's position as a leading player in the renewable industry and underlines management's commitment to create shareholder value. On the
7 Excluding Institutional Investors Partnership. Including I.I.P., Net Debt / EBITDA would be of 3.9x.
core of EDPR's confidence on achieving these targets, is a dynamic, highly qualified and experienced team of world-wide employees with the track record and ambition to deliver upon the superior growth targets.
In recent years, global attention has been increasingly focused on climate change and its effect on world populations, economies and, consequently, strategies for generating energy from renewable sources. At a global level, an important milestone was reached on May 9, 1992, when 154 countries signed the United Nations' Framework Convention on Climate Change (the "UNFCCC"), which came into effect on March 21, 1994.
The objective of the UNFCCC is to "achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system". As a result, on December 11, 1997, a majority of the countries that are party to the UNFCCC also signed the Kyoto Protocol, which came into effect on February 16, 2005 for those signatories that subsequently ratified it. The Kyoto Protocol sets mandatory limits on emissions of carbon dioxide and five other greenhouse gasses for individual nations in an effort to reduce emissions by a collective average of at least 5% against 1990 levels in the period between 2008 and 2012. The Kyoto Protocol establishes enforcement provisions and penalties for nations that exceed their designated emissions limits.
At the European level, The European Commission published a white paper on renewable energy in 1997, setting forth the renewable energy strategy of the Member States of the European Union (the "EU") and reaffirmed its commitment to the promotion of energy from renewable sources on January 10, 2007 with the European Commission's presentation of a long-term "Renewable Energy Roadmap" which proposes a mandatory target of generating 20% of energy from renewable sources by 2020. Furthermore, in January 2008, the EU proposed specific binding targets for each country.
The European Commission further developed the "Emissions Trading Scheme" ("ETS") allowances (which allows for companies to trade "permits" to pollution at the lowest cost) and rising prices for oil and gas, and reinforced the strong renewable energy allocation and flexibility methodology adopted by the European Council.
As far as North America is related, in September 2008, the U.S. House of Representatives passed the Comprehensive American Energy Security and Consumer Protection Act containing provisions for a Federal RPS to require 15% of power demand to be supplied through renewables by 2020. The wide ranging bill was defeated in the Senate, but its progress indicates the growing expectation for federal action on RPS legislation.
On climate change legislation, the states continued to lead the way in the US. The Regional Greenhouse Gas Initiative (RGGI) held its first CO2 allowance auction in September 2008. The RGGI provides the mechanism to manage the CO2 Budget Trading Programs for 10 participating states in the northeastern U.S. representing 12% of total US CO2 emissions.
At the federal level, members of the 110th Congress (2007-2008) introduced legislation related to global climate change at a faster pace than any previous Congress. In fact, lawmakers introduced more than three times as many bills, resolutions, and amendments specifically addressing global climate change and greenhouse gas emissions than the 109th Congress (2005-2006). While climate change legislation has not succeeded to date, expectations are building that the new administration and the Democratic controlled Congress will make progress.
Following the formal appointment of the New Administration in January 20th of 2009, the "American Recovery and Reinvestment Act of 2009" was signed into law on February 17th. This plan includes several provisions to stimulate investment in renewable energy and specifically the wind business.
Overall, in essence, the renewable energy industry benefits from government subsidies or incentives in the markets in which EDP Renováveis operates (Spain, Portugal, France, Belgium, Poland, Romania, the United States, and Brazil).
These incentives and subsidies benefit the producers of electricity from renewable energy sources and can broadly be classified into three groups:
In line with the objectives and the strategy of EDP Group reinforced during the IPO of EDP Renováveis, EDPR decided to implement a Internal Control System of Finance Report (SCIRF) with volunteer character that follows the international standards and aims to promote a set of activities to strengthen controls to ensure confidence and integrity of financial information.
In the European platform activities began at the end of 2007 and continued throughout 2008 with implementation of SCIRF following the following action lines:
Additionally in 2008, the first phase of deployment for the North America platform was initiated. This phase consisted in the reinforcement of the controls associated with the three major components that are covered in the model that follow the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework of reference the first two and Control Objectives for Information and related Technologies (COBIT) the last
The body responsible for SCIRF in EDPR is the Internal Audit Department whose functions include the implementation, follow up and system improvement designed for assuring confidence and integrity of the financial information.
Apart from the SCIRF, during 2nd half of 2008, EDPR created a Risk Management Department and started creating the basis for an integrated Risk Management Internal System with the purpose of pro-actively identify and manage the key risks arising from its business.
The main risks and uncertainties that can affect the operation performance of EDPR are described in the following sub-chapters.
EDPR's business is focused on the production of electricity from renewable energy sources. The amount of energy generated by, and the profitability of, wind farms is dependent on climatic conditions, which vary across the locations of the wind farms, the seasons and years.
Remuneration for electricity sold by a number of the wind farms depends, at least in part, on market prices for electricity. Market prices may be volatile and are affected by various factors, including the cost of the raw materials used as sources of energy, average rainfall levels, the cost of power plant construction, the technological mix of installed generation capacity and user demand.
At the same time, all new investments are subject to construction risk (in a diversity of forms) and once brought to operations are exposed to market, operational, credit and business risks which may penalize project's initial profitability.
The businesses of the EDPR are exposed to a variety of financial risks, including the effects of changes in market prices, foreign exchange and interest rates. The unpredictability of the financial markets is analyzed on an on-going basis in accordance with the EDP Group's risk management policy. Financial instruments are used to minimize potential adverse effects resulting from the interest rates and foreign exchange rates risks on its financial performance.
The management of financial risks of EDPR is undertaken by the Financial Department of EDP (under the terms of the outsourcing of management services agreement "Contrato de Prestaçao Serviços Consultoria" between EDPR and EDP), in accordance with the policies approved by the Board of Directors. The Financial Department identifies, evaluates and submits to the Board for approval, hedging mechanisms appropriate to each exposure.
The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits.
The capital investment required to develop and construct a wind farm is very high and generally varies based on the cost of the necessary fixed assets, such as turbines. The price of such equipments and/or civil construction works may increase, or continue to increase as in the case of
turbines, if the market demand for such equipment or works is greater than the available supply, or if the prices of key component commodities and raw materials used to build such equipments increases.
The Group operates internationally and is exposed to the exchange-rate risk resulting from investments in subsidiaries whose functional currency is the U.S. dollar. Currently, the exposure to the U.S. dollar/euro currency fluctuation risk results principally from the shareholding in EDPR NA. EDP Group's Financial Department is responsible for monitoring the evolution of the U.S. dollar, seeking to mitigate the impact of currency fluctuations on the financial results of the Group companies and consequently, on consolidated net profit, using exchange-rate derivatives and/or other hedging structures. The policy implemented by the Group consists of undertaking derivative financial instruments for the purpose of hedging foreign exchange risks with characteristics similar to those of the hedged item. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that gave rise to them is evaluated.
The Group's operating and financial cash flows are substantially independent from the fluctuation in interest-rate markets.
The purpose of the interest-rate risk management policies is to reduce the financial charges and the exposure of debt cash flows from market fluctuations through the settlement of derivative financial instruments to fix the debt interest rates. In the floating-rate financing context, the Group contracts interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating interest rate loans into fixed interest rate loans. All these operations are undertaken on liabilities in the Group's debt portfolio and are mainly perfect hedges through a high correlation between changes in fair value of the hedging instrument and changes in fair value of the interest-rate risk or upcoming cash flows.
EDPR has a portfolio of interest-rate derivatives with maturities between approximately 1 and 10 years. The EDP Group's Financial Department undertakes sensitivity analyses of the fair value of financial instruments to interest-rate fluctuations.
As of December 31, 2008, EDPR faced limited market price risk. In the case of EDPR NA, most prices are fixed and principally determined by long-term power purchase agreements. In the case of Spain, electricity is sold directly on the daily market at spot prices plus a pre-defined regulated premium. EDPR also has an option of selling this electricity through regulated tariffs, guaranteeing
minimum prices. In 2008 the company closed a hedge in order to mitigate pool price fluctuations in Q4 in Spain, which mitigates the risk related to fluctuations in pool prices. In the remaining countries, prices are mainly determined through regulated tariffs (France and Portugal) or managed through long-term power purchase agreement (Brazil, Poland, Romania and Belgium).
The development and profitability of renewable energy projects is dependent on policies and regulatory frameworks that support such development. The jurisdictions in which we operate provide various types of incentives that support the sale of energy generated from renewable sources.
Support for renewable energy sources has been strong during the last years, and both the European Union and the various U.S. federal and state bodies have regularly reaffirmed their desire to continue and strengthen such support (as legislative advances in early 2009 are adequate evidence). However, we can neither guarantee that support will be maintained nor guarantee that the electricity produced by future renewable energy projects will benefit from statutory purchase obligations, tax incentives, or other support measures for the generation of electricity from renewable energy sources.
With operating projects and ongoing development pipeline across multiple countries, EDPR faces the risks inherent in the individual countries, including:
Wind energy development requires multiple permits and studies about environmental impact of the proposed or existing projects. As with other risks, these permits do not have guaranteed approval from the relevant authorities.
Other operational, financial, political, reputation or others risks may arise from running the business while prospecting opportunities, developing projects or operating existing assets.
Topic 4.2 provides a description of the key financial risks faced by EDPR. According to EDPR risk policy, and in order to manage, control or minimize impact of some of those risks, EDPR may, occasionally, use financial derivatives and enter hedging transactions with the sole intent to protect against risks and as a consequence mitigate fluctuations of earnings. These derivative instruments are explained in detail as part of the notes to the financial statements.
During the 2008 exercise, EDP Holding and EDPR do not hold (or have bought) any treasury stocks (own shares).
EDPR's business model focused on renewable energy springs from its firm pledge to promote environmental protection as a fundamental pillar of its activity, complying with current environmental legislation while fostering sustainable development.
EDPR focuses its daily efforts on mitigating environmental impacts in all of its activities. From project development to construction and operation, EDPR conducts extensive location environmental viability studies, environmental impact studies, bird studies, noise studies, and promotes environmental awareness and alertness.
As a result of EDPR's philosophy to reach a sustainable development and its continuous aim to improve the environmental practices in all its activities, Environmental Management Systems
(EMSs) are currently in the process of being implemented in both the European and North American platforms.
For the European platform, under the international specification UNE-EN ISO 14001, wind farms currently in operation managed to achieve the corresponding certification by the end of 2008. This entails a project efficiency increase, minimizing consumption and enables a more exhaustive control of the compliance of legal requisites, among other aspects.
The North American platform is developing an EMS and has implemented standards for baseline wildlife studies applicable to all projects under development, construction, or operation, with the goals of:
The EMS is a set of processes and practices that enables both EDPR platforms to reduce its environmental impacts during development, construction, and operations. EDPR is committed to exceeding all standards and requirements for environmental impacts and as such is proactively integrating environmental awareness as key part of its growth strategy.
During 2008, the main objective of the Human Resources Department in EDPR was to harmonize, standardize and adjust the Human Resources policies of all the group companies to the comprehensive EDPR Talent Management structure, considering the organization and retribution model, as well as the performance evaluation. A new EDPR remuneration policy was established to link to this Talent Management Structure with the following dimensions:
Additionally, HR analyzed the key executive functions for each EDPR Group company. This analysis solidified the process of redefining the organization structure, as well as promotes the executives' national and international mobility and development.
With the intent to foster and support R&D within the renewables arena, EDP Renováveis signed an agreement with EDP Inovação, S.A. establishing the basis for joint project development in new technologies, technologies currently in pilot mode as well as in the enhancing of existing ones.
The purpose of this R&D agreement is to promote the exchange of knowledge between companies and to establish legal and commercials relations setting the tone for development R&D projects. This agreement is intended to remain in force as long as both companies are detained in more than 50% by EDP Group, reinforcing the long term commitment of EDPR to support of R&D activities in areas that relate with its business.
On February 16th, EDPR closed the transaction (initiated and announced still during 2008) to acquire 100% of the Brazilian wind assets of Central Nacional de Energia Eólica S.A. ("CENAEEL") for R\$51 million (enterprise value). Included in the transaction were 14MW of operating capacity spread across two wind farms in the state of Santa Catarina and a total of 70 MW of pipeline projects in various stages of maturity.
On February 17th, the President of the United States of America signed the American Recovery and Reinvestment Act of 2009, which includes a number of energy-related tax and policy provisions to benefit the development of wind energy generation in the country. The key tax incentives to be introduced as a result of this Act are the following:
The approved provisions will increase the optionalities on the monetization of the federal tax subsidies, providing a greater liquidity vis-à-vis the traditional monetization through Institutional Partnership transactions. The law, besides providing a wider regulatory stability until 2012, constitutes a major positive development in the US wind market in terms of improved project's economics and risks.
In accordance with the regulations, attached is an appendix with the Corporate Governance chapter, being an integral part of the current management report.
| Corporate Governance |
4 |
|---|---|
| 0. Statement of compliance | 4 |
| 1. Corporate governance structure | 12 |
| 2. Shareholder structure | 18 |
| 3. Management and control system | 20 |
| 4. Exercice of shareholders' rights | 34 |
| 5. Remuneration | 38 |
| 6. Shares and dividend policy | 42 |
| 7. Company's market relations | 46 |
| AnNEXEs: | |
| I. Main positions held by members of Board of Directors in last five years |
48 |
| II. Current positions of the members of the Board of Directors in companies not belonging to the same group as EDP Renováveis, S.A. |
52 |
| III.Current positions of the members of the Board of Directors in companies belonging to the same group as EDP Renováveis, S.A. |
54 |
| IV.Board of Directors | 58 |
| V. EDP Renováveis shares owned by members of the Board of Directors as at 31.12.2008 |
62 |
| EXTRACT OF MINUTES OF GENERAL MEETING | 64 |
EDP Renováveis, S.A. (hereinafter referred to as EDP Renováveis or the Company) is a listed company that was admitted to trading on the regulated market of NYSE Euronext Lisboa (Eurolist by Euronext Lisbon) following an initial public offering in May 2008 under Spanish law. In view of its status as a company quoted on a regulated market in Portugal, EDP Renováveis is subject to the corporate governance code called "Código de Governo das Sociedades" approved by the CMVM (Portuguese Securities Market Commission) in September 2007. This governance code is available to the public on the CMVM website, www.cmvm.pt.
EDP Renováveis states that it has adopted in full the CMVM recommendations on the governance of listed companies in the "Código de Governo das Sociedades", with the exception of Recommendations I.4.1. and II.2.2. of the code, which has not been adopted for the reasons indicated below.
The following table shows the CMVM recommendations set forth in the code and indicates whether or not they have been fully adopted by EDP Renováveis and the place in this report in which they are described in more detail.
| RECOMMENDATION | ADOPTION INFORMATION | DESCRIPTION IN REPORT |
|---|---|---|
| I. – General meeting of shareholders | ||
| I.1. – Board of the general meeting | ||
| I.1.1. The chairperson of the general meeting shall have access to human and logistical resources appropriate to his/her needs, taking into account the company's financial position. |
Adopted | 4.6 |
| I.1.2. The remuneration of the chairperson of the Board of the General Meeting shall be disclosed in the annual corporate governance report. |
Adopted | 4.6 |
| I.2. – Participation in the meeting | ||
| I.2.1. The time limit imposed by the Articles of Association for depositing or blocking shares for the purpose of participating in the meeting shall not exceed five working days. |
Adopted | 4.2 |
| I.2.2. Should the general meeting be suspended, the company shall not compel share blocking during that period until the meeting is resumed and shall then apply the same time limit as for the first session. |
Adopted | 4.2 |
| I.3. – Voting and voting rights | ||
| I.3.1. Company's Articles of Association shall not impose any restrictions on votes by mail. |
Adopted | 4.4 |
| I.3.2. The time limit imposed by the Articles of Association on receipt of votes by mail shall not exceed three working days. |
Adopted | 4.4 |
| I.3.3. Company Articles of Association shall provide for one vote per share. | Adopted | 4.3 |
I.4.1. Companies shall not fix a constitutive or deliberative quorum higher than that prescribed by law.
Not adopted ("Under Spanish law, the constitutive quorums on first and second call to order are 25% and 0% for ordinary and extraordinary general meetings and 50% and 25% for ordinary and extraordinary general meetings in which valid decisions may be made on the issue of bonds, increases or reductions in share capital, transformation, mergers or spin off of the company and, in general, any amendments to the Articles of Association. The company's Articles of Association establish a slightly higher constitutive quorum in order to reinforce shareholder support for approval of decisions.")
| I.5.1. The minutes of general meetings shall be made available | Adopted | 4.7 |
|---|---|---|
| to shareholders on the company's website within five days, even if they | ||
| do not constitute privileged information under the law. A collection | ||
| of attendance lists, agendas and decisions passed during meetings shall | ||
| be kept on file on the company's website for at least three years. | ||
| I.6. – Company control measures | ||
| I.6.1. Measures to prevent successful takeover bids shall respect | Adopted | 4.8 |
| the interests of the company and its shareholders. | ||
| I.6.2. Company's Articles of Association that, in compliance with the | Not applicable | |
| previous sub-paragraph, limit the number of votes that may be held or cast | ||
| by a sole shareholder, either individually or jointly with other shareholders, | ||
| shall also provide for the general meeting to decide, at least every five | ||
| years, on whether this provision is to be maintained, without higher | ||
| quorum requirements than those established by law, and for all votes cast | ||
| to be counted in said decision without the limitation being imposed. | ||
| I.6.3. There shall be no defensive measures intended to automatically | Adopted | 4.8 |
| cause a serious depletion of the company's assets in the event of transfer | ||
| of control or a change of membership of the Board of Directors thereby | ||
| affecting the free transferability of shares and free appreciation | ||
| by shareholders of the Board members' performance. | ||
| II – Management and supervisory bodies | ||
| II.1. – General matters |
II.1.1. – Structure and duties
II.1.1.1. The Board of Directors shall, in its governance report, assess the model adopted, identify any constraints on its functioning and recommend appropriate measures to overcome them.
Adopted 1.1
| I.1.1.2. Companies shall set up in-house control systems for the effective detection of risks associated with their activity in order to safeguard their assets and ensure the transparency of their corporate governance. |
Adopted | 3.7 |
|---|---|---|
| II.1.1.3. Management and supervisory bodies shall have their own regulations which shall be posted on the company's website. |
Adopted | 3.1.3/3.3.3/7.3 |
| II.1.2. – Incompatibilities and independence | ||
| II.1.2.1. The Board of Directors shall include a number of non-executive members to guarantee its effective ability to supervise, audit and assess the work of the executive members. |
Adopted | 1.2.2/1.2.6.1/3.1.3 |
| II.1.2.2. The non-executive directors must include a suitable number of independent directors, taking into account the size of the company and its shareholder structure. This number shall be no less than one quarter of the total number of directors. |
Adopted | 1.2.2/1.2.6.1 |
| II.1.3. – Eligibility and appointment | ||
| II.1.3.1. Depending on the applicable model, the chairperson of the Audit Committee or Financial Committee shall be independent and have the necessary competences to perform his/her duties. |
Adopted | 1.2.2/1.3/3.3 |
| II.1.4. – Whistle-blowing policy | ||
| II.1.4.1. The company shall adopt a whistle-blowing policy for reporting irregularities occurring in it, indicating the following information: i) means by which irregularities can be reported within the company, including the names of the people qualified to receive reports, ii) the treatment to be given to reports, including confidentiality if the whistle-blower so wishes. |
Adopted | 3.9 |
| II.1.4.2. The general lines of this policy shall be set forth in the corporate governance report. |
Adopted | 3.9 |
| II.1.5. – Remuneration | ||
| II.1.5.1. The remuneration of the members of the Board of Directors shall be structured in such a way as to ensure that their interests are in line with that of the company. In this context: i) The remuneration of executive directors shall include a performance-based component and a performance evaluation conducted by the competent body shall therefore be taken into account. ii) The variable component shall be such as to maximise the company's long-term performance and shall depend on the sustainability of the performance variables adopted. iii) When not otherwise required by law, the remuneration of the non-executive members of the Board of Directors shall consist exclusively of a fixed amount. |
Adopted | 5.1/5.2/5.3 |
II.1.5.2. The Remuneration Committee and the Board of Directors shall submit to the annual general meeting a statement on pay policy of the members of the managing and supervisory bodies and other managers, as set forth in Article 248-B(3) of the Securities Code. In this context, the shareholders shall be informed of the criteria and main parameters used to evaluate performance for the purpose of calculating the variable component, whether it is in the form of rewards in shares, share options or other components.
II.1.5.3. At least one representative of the Remuneration Committee shall attend annual general meetings.
II.1.5.4. A proposal to approve share distribution or share option plans or plans based on variations in share price to members of the managing and supervisory bodies and other managers, as set forth in Article 248-B(3) of the Securities Code shall be submitted to the general meeting. The proposal shall contain all the necessary information for a correct evaluation of the plan. The proposal shall be accompanied by the regulations of the plan or, if they have not yet been drawn up, the general conditions with which they must comply. The main characteristics of the retirement benefit system for members of the managing and supervisory bodies and other managers, as set forth in Article 248-B(3) of the Securities Code shall be approved by the general meeting.
II.1.5.5. The remuneration of each member of the managing and supervisory bodies shall be published, distinguishing, whenever appropriate, between fixed and variable remuneration and between remuneration received from other group companies or companies controlled by shareholders owning qualifying holdings.
| Adopted | 5.4 |
|---|---|
| Adopted | 5.6 |
| Not applicable | 5.3/5.7 |
Adopted ("EDP Renováveis informs its shareholders of the remuneration of its CEO and breaks it down into fixed and variable remuneration. However, EDP Renováveis considers that the remuneration of the remaining members of the Board of Directors and Audit Committee should be disclosed to shareholders as a whole (specifying the fixed and variable remuneration), as it feels that the performance of the managing and supervisory bodies should be analysed globally and provide a collective overview.")
II.2.1. Within the limits established by law for each managing and supervisory body, and unless the company is small in size, the Board of Directors shall delegate the day-to-day running of the company. The duties delegated shall be identified in the annual corporate governance report.
II.2.2. The Board of Directors shall ensure that the company acts in accordance with its goals and shall not delegate its powers to: i) define the company's general strategy and policies; ii) define the group's corporate structure; iii) make decisions that should be considered strategic due to their amount, risk or special characteristics.
II.2.3. If the chairperson of the Board of Directors has executive functions, the Board of Directors shall find efficient mechanisms for coordinating the work of the non-executive members to ensure that they can make independent, informed decisions. These mechanisms shall be explained to the shareholders in the annual corporate governance report.
Adopted 3.1/3.2.1/3.3
5.3
Not adopted ("Under Spanish law, the matters referred to in this recommendation can be delegated to the Executive Committee. It is common practice in Spanish listed companies for the delegation of powers to be far-reaching, with the exception of matters related to the preparation of accounts.")
Adopted 3.1.3
| II.2.4. The company's annual report shall include a description of the work done by the non-executive directors and mention any constraints arising. |
Adopted | 3.1.3 |
|---|---|---|
| II.2.5. The Board of Directors shall rotate the financial director at least at the end of every two terms. |
Not applicable ("The Board of Directors only took office in the first half of 2008.") |
|
| II.3. – CEO, Executive Committee and executive Board of Directors | ||
| II.3.1. When asked to do so by other members of the corporate bodies, executive directors shall provide the appropriate information in good time. |
Adopted | 3.2.1.3 |
| II.3.2. The chairperson of the Executive Committee shall send to the chairperson of the Board of Directors and, as applicable, the chairperson of the Supervisory Board or Audit Committee invitations to and minutes of its meetings. |
Adopted | 3.2.1.3. |
| II.3.3. The chairperson of the Executive Board of Directors shall send to the chairperson of the General and Supervisory Board and the chairperson of the Financial Committee invitations to and minutes of its meetings. |
Not applicable | |
| II.4. – General and supervisory board, financial committee, audit committee and supervisory board |
||
| II.4.1. In addition to its supervisory duties, the General and Supervisory Board shall advise, monitor and constantly assess the company's management by the Executive Board of Directors. The matters on which the General and Supervisory Board shall give opinions include: i) the company's general strategy e policies, ii) the group's corporate structure and iii) decisions that are considered strategic due to their amount, risk or special characteristics. |
Not applicable | |
| II.4.2. The annual reports on the work of the General and Supervisory Board, Financial Committee, Audit Committee and Supervisory Board shall be published on the company's website together with the financial statements. |
Adopted | 3.3.4./7.3 |
| II.4.3. The annual reports on the work of the General and Supervisory Board, Financial Committee, Audit Committee and Supervisory Board shall include a description of their supervision and mention any constraints found. |
Adopted | 3.3.4/7.3 |
| II.4.4. The Financial Committee, Audit Committee and Supervisory Board, depending on the model adopted, shall represent the company for all purposes in relations with the external auditor and shall propose an auditor to provide these services and his/her fees, ensure that the company offers all the right conditions for the provision of these services, act as an interlocutor for the company and be first recipient of the auditor's reports. |
Adopted | 3.3.2 |
| II.4.5. Every year, the Financial Committee, Audit Committee and Supervisory Board, depending on the model adopted, shall evaluate the external auditor and propose his/her discharge to the general meeting, if there is due cause. |
Adopted | 3.3.2/3.8 |
| II.5.1. Unless the company is small in size, the Board of Directors and the General and Supervisory Board, depending on the model adopted, shall set up any necessary committees to: i) conduct a competent, independent evaluation of the performance of the executive directors and assess their own overall performance and that of the different committees, ii) reflect on the company's governance system, check its effectiveness and suggest measures for improving it to the competent bodies. |
Adopted | 1.1/2.2.2/3.3.2 |
|---|---|---|
| II.5.2. The members of the Remuneration Committee or equivalent shall be independent from the members of the Board of Directors. |
Not applicable ("The members of the Nomination and Remuneration Committee are members of the Board of Directors. However, its members are considered independent members and do not therefore belong to the Executive Committee. In accordance with Articles 9 and 130 of the Spanish Public Company Law, the remuneration scheme for directors should be fixed in the articles of association. It is normal practice in Spanish companies for this remuneration to be decided upon by the General Meeting of Shareholders and for its allocation to the different members of the Board of Directors to be decided on by the Board itself)." |
1.2.6.2/3.2.2.1 |
| II.5.3. All committees shall draft minutes of their meetings. | Adopted | 3.2.1.3 / 3.2.2.3 / 3.2.3.3./ 3.3.3 |
| III. – Disclosure and audits | ||
| III.1. – General disclosure obligations | ||
| III.1.2. Companies shall ensure permanent contact with the capital market, abide by the principle of equality between shareholders and prevent asymmetries in access to information by investors. The company shall maintain an investor relations office for the purpose. |
Adopted | 7.1 / 7.2 |
| III.1.3. The following information shall be posted on the company's website in English: a. Its name, status as a listed company, registered office and other information mentioned in Article 171 of the Company Code; b. Its Articles of Association; c. The names of the members of the corporate bodies and market liaison officer; d. Investor relations office, its functions and contact information; e. Financial statements; f. Half-yearly calendar of company events; g. Proposals submitted for discussion and voting at general meetings; h. Invitations to general meetings. |
Adopted | 7.3 |
Article 20.2 of the EDP Renováveis Articles of Association qualifies as independent directors who can perform their jobs without being limited by relations with the company, its shareholders with significant holdings or its directors and meet the other legal requirements.
For the purpose of this statement of compliance with independence criteria and for the sake of comparison between EDP Renováveis and the other companies quoted on Eurolist by Euronext Lisbon in matters of compliance with corporate governance recommendations, we have also considered the criteria for appraising independence and incompatibilities set forth in Article 414(5), both of the Codigo das Sociedades Comerciais, and so the Board of Directors of EDP Renováveis considers that the following directors meet these criteria of independence required by law and the Articles of Association:
| Name | Position | Age | Date of appointment | End of term |
|---|---|---|---|---|
| José Silva Lopes | Director (independent) Member of Audit Committee |
76 | 04/06/2008 | 04/06/2011 |
| António Nogueira Leite | Director (independent) | 46 | 04/06/2008 | 04/06/2011 |
| Rafael Caldeira Valverde | Director (Independent) | 55 | 04/06/2008 | 04/06/2011 |
| José Araújo e Silva | Director (independent) | 57 | 04/06/2008 | 04/06/2011 |
| Jorge Santos | Director (independent) | 57 | 04/06/2008 | 04/06/2011 |
| Francisco José Queiroz de Barros de Lacerda | Director (independent) Member of Audit Committee |
48 | 04/06/2008 | 04/06/2011 |
| João Manuel de Mello Franco | Director (independent) Chairperson of Audit Committee |
62 | 04/06/2008 | 04/06/2011 |
| João Lopes Raimundo | Director (independent) | 48 | 04/06/2008 | 04/06/2011 |
| Daniel M. Kammen | Director (independent) | 46 | 04/06/2008 | 04/06/2011 |
With regard to the situations set forth in Article 414-A(1) of the Company Code, the director António Nogueira Leite holds the position of director with more than five companies.
EDP Renováveis, has adopted the governance structure in effect in Spain. It comprises a General Meeting of Shareholders, which expresses corporate wishes, and a Board of Directors that represents and manages the company.
As required by law and the Articles of Association, the Company's Board of Directors has set up four committees. They are the Executive Committee, the Audit and Control Committee, the Nomination and Remuneration Committee and the Committee on Related-Party Transactions.
The Company's governance structure is shown in the chart below.
The governance model of EDP Renováveis is designed to ensure the transparent, meticulous separation of duties and the specialisation of supervision. The following are the most important bodies in the management and supervision model at EDP Renováveis:
The adoption of this model by EDP Renováveis is intended to adapt the Company's corporate governance to the specificities of Portuguese legislation, due to the fact that Spanish law is its personal law. The governance model adopted by EDP Renováveis therefore seeks, insofar as it is compatible with its personal law, to correspond to the Anglo-Saxon model set forth in the Código das Sociedades Comerciais, in which the management body is a Board of Directors, and supervision and control are the responsibility of an Audit Committee.
The choice of this model is essentially an attempt to establish compatibility between two different systems of company law, which can be considered applicable to the model.
Although EDP Renováveis shares were only admitted to trading on Eurolist by Euronext Lisbon in mid-2008, experience of institutional operating indicates that the governance model adopted by the shareholders is appropriate to the corporate organisation of EDP Renováveis activity, especially because it affords a healthy balance between the management functions of the Executive Committee, the supervisory functions of the Audit and Control Committee and oversight by different specialised Board of Directors committees.
The institutional and functional relationship between the Executive Committee, Audit and Control Committee and the other non-executive members of the Board of Directors has proved very positive and has fostered internal harmony conducive to the development of the company's businesses.
In order to ensure a better understanding by its shareholders of EDP Renováveis corporate governance, the Company posts its updated Articles of Association on www.edprenovaveis.com.
The General Meeting of Shareholders is the Company's highest governing body. It is a meeting of shareholders that, when properly convened, has the power to decide and adopt majority decisions on matters that the law and the Articles of Association set forth that it should decide and be submitted for its approval.
The Board of the General Meeting is responsible for organising its proceedings. It is made up of the Chairperson of the Meeting, the Chairperson of the Board of Directors, or his/her substitute, the other Board members and the Secretary of the Board of Directors.
The Board of Directors has the broadest powers for the management and governance of the Company, with no limitations other than the competences expressly allocated exclusively to the General Meeting of Shareholders by law or the Articles of Association.
The structure, competences and functioning of the Board of Directors are described in more detail in point 3.1.
The Board of Directors currently consists of the following fifteen (15) members:
| Name | Position | Age | Date of appointment | End of term |
|---|---|---|---|---|
| António Mexia | Chairman and Director | 51 | 3/18/08 | 3/18/11 |
| Ana Maria Fernandes | Vice-Chairman, CEO | 46 | 3/18/08 | 3/18/11 |
| António Martins da Costa | Director | 54 | 3/18/08 | 3/18/11 |
| Nuno Alves | Director | 50 | 3/18/08 | 3/18/11 |
| João Manso Neto | Director | 50 | 3/18/08 | 3/18/11 |
| José Silva Lopes* | Director (independent) | 76 | 6/4/08 | 6/4/11 |
| António Nogueira Leite* | Director (independent) | 46 | 6/4/08 | 6/4/11 |
| Rafael Caldeira Valverde* | Director (independent) | 55 | 6/4/08 | 6/4/11 |
| José Araújo e Silva* | Director (independent) | 57 | 6/4/08 | 6/4/11 |
| Manuel Menéndez Menéndez* | Director | 49 | 6/4/08 | 6/4/11 |
| Jorge Santos* | Director (independent) | 57 | 6/4/08 | 6/4/11 |
| Francisco José Queiroz de Barros de Lacerda* | Director (independent) | 48 | 6/4/08 | 6/4/11 |
| João Manuel de Mello Franco* | Director (independent) | 62 | 6/4/08 | 6/4/11 |
| João Lopes Raimundo* | Director (independent) | 48 | 6/4/08 | 6/4/11 |
| Daniel M. Kammen* | Director (independent) | 46 | 6/4/08 | 6/4/11 |
* Appointed in agreements adopted by the General Meeting of Edp Renováveis, S.A. on 14 May 2008, to take office as members of the Board of Directors on 4 June 2008
The positions held by the members of the Board in the last five (5) years, those that they currently hold and positions in Group and non-Group companies are listed in Annexes I, II and III, respectively. Annex IV also gives a brief description of the Board members' professional and academic careers.
Finally, the shares of EDP Renováveis owned by each Board member are described in the table in Annex V.
The Chairperson of the Board is the Chairperson of the Company and fully represents it, using the company name, implementing decisions of the General Meeting, Board of Directors and the Executive Committee.
Without prejudice to the powers of the Chairperson under the law and Articles of Association, he also has the following powers:
The Chairperson of the Board is appointed by the members of the Board of Directors, unless this is done by the General Meeting. The current Chairperson was appointed on 18 March 2008.
It is the Vice-Chairperson who replaces the Chairperson when he is unable to attend. The Board may also delegate executive powers to the Vice-Chairperson.
The Vice-Chairperson is appointed by the Board of Directors on the proposal of the Chairperson. The Vice-Chairperson was appointed on 18 March 2008.
The Board of Directors may appoint one or more CEOs. CEOs are appointed on the proposal of the Chairperson or two-thirds of the directors. CEOs are appointed with a vote in favour of two-thirds of the directors and must be chosen from among the Board members.
The competences of each CEO are those deemed appropriate in each case by the Board, with the only requirement being that they are delegable under the law and Articles of Association.
The CEO was appointed on 4 June 2008 and the competences allocated to her include coordination of the implementation of Board and Executive Committee decisions, monitoring, leading and coordinating the management team, representing the company in dealings with third parties and other related duties.
| CEO | |
|---|---|
| Ana Maria Fernandes |
The duties of the Company Secretary are those set forth in current laws, the Articles of Association and Board Regulations. In particular, in accordance with the Board Regulations and in addition to those set forth in the Articles of Association, his competences are:
The Company Secretary, who is also the General Secretary and Director of the Legal Department at EDP Renováveis, was appointed on 4 December 2007.
Emilio García-Conde Noriega
The structure, competences and operation of the Executive Committee, Nomination and Remuneration Committee and the Committee on Related-Party Transactions are described in point 3.2. Nonetheless, the nature of the committees and the names of their members are detailed below.
The Executive Committee is a permanent body to which all competences of the Board of Directors that are delegable under the law and the Articles of Association can be delegated, with the exception of i) election of the Chairperson of the Board of Directors, ii) appointment of directors by cooption, iii) requests to convene or convening of General Meetings, iv) preparation and drafting of the Annual Report and Accounts and submission to the General Meeting, v) change of registered office and vi) drafting and approval of mergers, spin off or transformation of the company.
The committee currently consists of five (5) members, who were appointed on 4 June 2008, plus the Secretary.
| Executive Committee | ||
|---|---|---|
| Chairman | António Mexia | |
| CEO | Ana Maria Fernandes | |
| António Martins da Costa | ||
| Nuno Alves | ||
| João Manso Neto | ||
| Secretary | Emilio García-Conde Noriega |
The members of the Executive Committee shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the Executive Committee at any time and the members may resign said positions while still remaining Company directors.
The Nomination and Remuneration Committee is a permanent body of a merely informative and advisory nature and its recommendations and reports are not binding.
The Nomination and Remuneration Committee currently consists of three (3) independent members, who were appointed on 4 June 2008, plus the Secretary.
| Nomination and Remuneration Committee | |||
|---|---|---|---|
| Chairman | Jorge Santos | ||
| João Lopes Raimundo | |||
| Rafael Caldeira Valverde | |||
| Secretary Emilio García-Conde Noriega |
None of the committee members are spouses or up to third-degree relatives in direct line of the other members of the Board of Directors.
The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company directors.
The Committee on Related-Party Transactions is a body of the Board of Directors.
The committee currently consists of three (3) members, who were appointed on 4 June 2008, plus the Secretary.
| Committee on Related-Party Transactions | |||
|---|---|---|---|
| Chairman António Nogueira Leite |
|||
| João Manuel de Mello Franco | |||
| João Manso Neto | |||
| Secretary | Emilio García-Conde Noriega |
The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company directors.
The Audit and Control Committee is a permanent body and performs supervisory tasks independently from the Board of Directors.
The committee currently consists of three (3) members who are independent directors and were appointed on 4 June 2008, plus the Secretary.
| Audit and Control Committee | |||
|---|---|---|---|
| Chairman | Joâo Manuel de Mello Franco | ||
| José Silva Lopes | |||
| Francisco José Queiroz de Barros de Lacerda | |||
| Secretary | Emilio García-Conde Noriega | ||
The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company directors.
The structure, competences and functioning of the Audit and Control Committee are described in point 3.3.
EDP Renováveis has adopted the following organisation chart for its management:
The EDP Renováveis management team consists of the Chief Executive Officer, four areas of responsability (Chief Financial Officer, Chief Business Development Officer, Chief Operating Officer for Europe and Chief Operating Officer for North America) and Company Secretary and Legal Counsel. The functions and competences of the management team, with the exception of the Chief Executive Officer, whose functions have already been described and who runs the management team, are as follows:
It is the Chief Financial Officer's job:
• To propose and ensure the implementation of the Group's financial policy and management, including (i) negotiating, managing and controlling financing, (ii) optimizing cash management and (iii) proposing financial risk management policy;
The job of the Chief Business Development Officer is to promote, direct and approve the development of EDP Renováveis business. In line with the strategic plan and in coordination with the other members of the management team, he must increase the value of the group's business portfolio, while watching the potential and risks of markets and new technologies. His teams coordinate and implement new business development initiatives in new countries and are responsible for monitoring and assessing investments in the consolidated platforms in Europe and the United States.
It is the job of the Chief Operating Officer for Europe to coordinate the EDP Renováveis European platform in establishing, developing and implementing the EDP Renováveis group's strategic plan for the renewable energies business, drafting and implementing the strategic plan for Europe in accordance with the guidelines set by the Board of Directors of EDP Renováveis, planning, organising and managing resources, controlling, measuring and improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDP Renováveis a leader in the renewable energy sector in Europe.
The Chief Operating Officer for North America is responsible for coordinating the North American platform of EDP Renováveis in establishing, developing and implementing the EDP Renováveis group's strategic plan for the renewable energies business, drafting and implementing the strategic plan for the United States, in accordance with the guidelines set by the Board of Directors of EDP Renováveis, planning, organising and managing resources, controlling, measuring and
improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDP Renováveis a leader in the renewable energy sector in the United States.
S/he assists the Board of Directors in its legal, administrative and logistics activities to ensure that it functions effectively, provides legal advice to the group in order to guarantee compliance with applicable legislation, and provides legal support at Board meetings, including the circulation of its decisions.
In 2008, the EDP Renováveis shareholder structure changed significantly after the institutional public offering (IPO) of 196,024,306 shares representing 22.5% of its share capital. As at 31 December 2007, 80% of the share capital of EDP Renováveis was owned by EDP – Energias de Portugal Sucursal Espanha, S.A. ("EDP") and 20% by Hidroeléctrica del Cantábrico, S.A. (Hidrocantábrico), 97% of which is owned by EDP. The initial public offering took place in June 2008 through a share capital increase of 196,024,306 shares and admission to trading at Euronext Lisboa of the 872,308,162 shares of EDP Renováveis, with a face value of € 5.00 each. Following the IPO, the shareholder structure is as follows:
| 31 Dec 2008 | No. shares |
|---|---|
| EDP | 541,027,156 |
| Hidrocantábrico | 135,256,700 |
| Free float | 196,024,306 |
| Total | 872,308,162 |
All EDP Renováveis shares are of the same category. Under the Spanish Ley de Sociedades Anónimas, approved by Royal Decree 1564/1989 of 22 December 1989 (hereinafter Public Company Law) and the Articles of Association of EDP Renováveis, the owner of a share becomes a shareholder with all the inherent rights and obligations established in the Public Company Law and articles of association of EDP Renováveis. The most important rights inherent in shares are the right to receive dividends, the right to obtain general information on any matters to be discussed at General Meetings, general rights to attend, voting rights, the right to object to company decisions, pre-emptive rights in share capital increases and the right to participate in the distribution of assets if EDP Renováveis is dissolved.
In December 2008, EDP Renováveis had around 140,000 institutional and private shareholders in over 50 countries, with special focus on Portugal, the United States, United Kingdom and the rest of Europe. The pie chart below shows the geographical division of the EDP Renováveis free float.
Qualifying shareholdings in EDP Renováveis are subject to Spanish law, which regulates the criteria and thresholds of shareholders' holdings. As at 31 December 2008 no qualifying shareholdings in EDP Renováveis with the exception of EDP and Hidrocantábrico were identified.
EDP Renováveis shares are of a single class and series and have been fully paid up. There are no holders of special rights.
Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDP Renováveis shares.
As far as the Board of Directors of EDP Renováveis knows, there are currently no shareholders' agreements regarding the Company.
Pursuant to Articles 10 and 19 et seq of the Articles of Association of EDP Renováveis, the Company's managing body is a Board of Directors, and there are four committees stemming from it. They are the Executive Committee, the Audit and Control Committee, the Nomination and Remuneration Committee and the Committee on Related-Party Transactions.
Pursuant to Articles 20 and 21 of the Company's Articles of Association, the Board of Directors shall consist of no fewer than five (5) and no more than seventeen (17) directors. Their term of office shall be three (3) years, and they may be re-elected once or more times for equal periods. The Board of Directors currently consists of fifteen (15) members, whose particulars were indicated in point 1.2.2. above.
Pursuant to Article 19 of the Company's Articles of Association, the Board of Directors has the broadest powers for the administration, management and governance of the Company, with no limitations other than the responsibilities expressly and exclusively invested in General Meetings in the Company's Articles of Association or applicable law. The Board is therefore expressly empowered to:
in general in dealings with the public administration at all levels and to intervene or promote, pursue and end by all proceedings and instances any processes, judgements and proceedings, to consent to settlements, lodge all classes of appeal, including cassation and other extraordinary actions, to drop cases or settle, make concessions, submit disputes to arbitration, make all kinds of notifications and applications and grant powers to attorneys and other representatives to settle cases, with the authority for the case and those usual in general for lawsuits and special authority to grant and revoke these powers;
Regarding decisions to increase the share capital, the Board of Directors, by delegation from the General Meeting, may decide to increase the share capital once or several times. This delegation, which may be the subject of replacement, can include the power to demand a pre-emptive right in the issue of shares that are the subject of delegation and with the requirements established by law.
On the other hand, the General Meeting may also delegate to the Board of Directors the power to implement an adopted decision to increase the share capital, indicating the date or dates of its implementation and establishing any other conditions that have not been specified by the General Meeting. This delegation may be the subject of replacement. The Board of Directors may use this
delegation wholly or in part and may also decide not to perform it in consideration of the conditions of the Company, the market or any particularly relevant events or circumstances that justify said decision, of which the General Meeting must be informed at the end of the time limit or limits for performing it.
In addition to the Articles of Association and the law, the Board of Directors is governed by the regulations approved on 13 May 2008. The regulations on the functioning of the Board are available to Company shareholders on the website www.edprenovaveis.com.
The Board of Directors must meet at least four (4) times a year, preferably once a quarter. Nonetheless, the Chairperson, on his own initiative or that of three (3) directors, shall convene a Board meeting whenever he deems it in the Company's interest. The Board of Directors held seventeen (17) meetings during the year ended on 31 December 2008.
Meetings are convened by the Chairperson, who may order the Secretary to send the invitations. Invitations shall be sent at least five (5) days prior to the date of the meeting. On exception, when the circumstances so require, the Chairperson may call a meeting of the Board without respecting the required advance notice.
The meetings of the Board are valid if half of the directors plus one are present or represented. Directors shall attend Board meetings personally and, on exception, if they are unable to do so, they shall delegate their representation in writing to another Board member. Without prejudice to the above, the Board of Directors shall be deemed to have been validly convened, with no need for an invitation, if all the directors present or represented agree unanimously to hold the meeting as universal and accept the agenda to be dealt with at it.
Decisions are adopted by absolute majority among those present. Each director present or represented has one vote and the Chairperson has the casting vote in the event of a tie.
In order for the non-executive directors to be able to decide independently and be informed, Articles 22, 24 and 25 of the Board regulations established the following mechanisms:
Company's operations. In order to prevent distortions in the Company management, the exercise of the powers to obtain information shall be channelled through the Chairperson or Secretary of the Board of Directors;
• Any director may request the hiring, on the Company's account, of legal advisers, accountants, financial or commercial specialists or other experts. The performance of the job must necessarily relate to concrete problems of a certain importance and complexity. Requests to hire experts shall be channelled through the Chairperson or Secretary of the Board of Directors, who shall be subject to the approval of the Board of Directors.
Thanks to the mechanisms set forth in the regulations, non-executive directors have encountered no difficulties in performing their duties.
In 2008, the non-executive directors were involved in the governance of EDP Renováveis not only by participating in meetings of the Board of Directors, where they gave their opinions on different company matters, made any suggestions they saw fit and took decisions on matters submitted to them, but also by working on the Nomination and Remuneration Committee, Committee on Related-Party Transactions and Audit and Control Committee, where all the members are non-executive, with the exception of the Committee on Related-Party Transactions, which has one executive director.
In 2008, several meetings were held with the non-executive directors in order to provide them with specific information on Company activities. The following workshops were held in September and October:
Pursuant to Article 27 of the Company's Articles of Association, the Executive Committee shall consist of no fewer than three (3) and no more than six (6) directors. The committee currently consists of the members indicated in point 1.2.6.1.
Its creation, the appointment of its members and the extension of the powers delegated must be approved by two-thirds (2/3) of the members of the Board of Directors.
The Executive Committee is a permanent body. It has currently been delegated all the Board of Directors' powers that are delegable under the law and the articles of association legal, with the exception of: i) election of the Chairperson of the Board of Directors, ii) appointment of directors by cooption, iii) requests to convene or convening of General Meetings, iv) preparation and drafting of the Annual Report and Accounts and submission to the General Meeting, v) change of registered office and vi) drafting and approval of mergers, spin off or transformation of the company.
The Executive Committee members have been delegated all the powers of representation of the Company so that any of its members can act jointly in the name and on behalf of the Company.
In addition to the Articles of Association, this committee is also governed by the regulations approved on 4 June 2008 and also by the Board Regulations. The committee's regulations are at the shareholders' disposal on www.edprenovaveis.com.
The Executive Committee shall meet at least once a month and whenever deemed appropriate by its Chairperson, who may also suspend or postpone meetings when he sees fit. The Executive Committee shall also meet when requested by at least two (2) of its members. The Executive Committee held eleven (11) meetings during the year ended on 31 December 2008.
The Executive Committee shall draft minutes for each of the meetings held and shall inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The Chairperson of the Executive Committee, who is currently also the Chairperson of the Board of Directors, shall send the Chairperson of the Audit and Control Committee invitations to the Executive Committee meetings and the minutes of said meetings.
Meetings of the Executive Committee shall be valid if half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. In the event of a tie, the Chairperson shall have the casting vote.
Pursuant to Article 29 of the Company's Articles of Association, the Appointments and Remunerations Committee shall consist of no fewer than three (3) and no more than six (6) directors. At least one of its members must be independent and shall be the Chairperson of the committee.
The members of the committee should also not be members of the Executive Committee. The committee currently consists of the members indicated in point 1.2.6.2 and are all independent directors.
The Appointments and Remunerations Committee is made up of independent members of the Board of Directors, in compliance with Recommendation 44 of the Unified Code of Good Governance approved by decision of the Board of the Spanish Securities Committee (hereinafter the CNMV), as amended by CNMV Circular 4/2007 of 27 December, which lays down that the Appointments and Remunerations Committee must be entirely made up of external directors numbering no fewer than three (3). As it is made up of independent directors (in Spain the committee may only be comprised of directors) it complies as completely as possible with the recommendation indicated in point II.5.2 of the Portuguese Code of Corporate Governance.
The Appointments and Remunerations Committee is a permanent body of a merely informative and advisory nature and its recommendations and reports are not binding.
The Appointments and Remunerations Committee has no executive functions. The main functions of the Appointments and Remunerations Committee are to assist and report to the Board of Directors about appointments (including by cooption), re-elections, dismissals and remunerations of the Board and its positions, about the composition of the Board and the appointment, remuneration and dismissal of senior management personnel. The Appointments and Remunerations Committee shall also inform the Board of Directors on general remuneration policy and incentives to them and senior management. These functions include the following:
• To define the principles and criteria regarding the membership of the Board of Directors and the selection and appointment of its members;
In addition to the articles of association, the Appointments and Remunerations Committee is governed by the Regulations approved on 4 June 2008 and also by the Board regulations. The committee's regulations are at the shareholders' disposal on www.edprenovaveis.com.
This committee shall meet at least once every quarter and also whenever its Chairperson sees fit.
This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The meetings of this committee shall be valid if at least half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the deciding vote in the event of a tie.
In 2008 the Appointments and Remunerations Committee held four (4) meetings. The main proposals made by the Committee during the year were:
Pursuant to Article 30 of the Articles of Association, the Board may set up other committees, such as the Related Party Transactions Committee. This committee shall consist of no fewer than three (3) members. The majority of the members of the Related Party Transactions Committee shall be independent.
Members of the Related Party Transactions Committee shall be considered independent if they can perform their duties without being conditioned by relations with EDP Renováveis, its majority shareholders or its directors and, if this is the case, meet the other requirements of applicable legislation.
The committee currently consists of the members indicated in point 1.2.6.3.
The Related Party Transactions Committee is a body belonging to the Board of Directors and performs the following duties, without prejudice to others that the Board may assign to it:
• Periodically informing the Company's Board of Directors of business and legal relations to be established between EDP or related parties and EDP Renováveis or related parties;
Should the Related Party Transactions Committee not ratify business or legal relations between EDP or its related parties and EDP Renováveis and its related parties, said relations shall require the approval of two-thirds (2/3) of the members of the Board of Directors, whenever at least half of the members proposed by entities other than EDP, including independent directors, vote in favour, unless, before submission for ratification by the Related Party Transactions Committee, this majority of members has voiced it approval.
The previous paragraphs shall not apply to operations between EDP or its related parties and EDP Renováveis or its related parties that have standardised conditions and are applied in the same way, including when the conditions regard price, to different parties related to EDP and EDP Renováveis and their related parties.
In addition to the Articles of Association, the Related Party Transactions Committee is governed by the regulations approved on 4 June 2008 and by the Board Regulations. The committee's regulations are at the shareholders disposal on www.edprenovaveis.com.
The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit.
This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The meetings of this committee shall be valid if at least half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.
In 2008, the Related Party Transactions Committee held four (4) meetings. The committee analysed the agreements between EDP Renováveis and companies in the EDP Group that do not belong to the subgroup in which the dominant company is EDP Renováveis submitted for its consideration.
The committee revised, approved and proposed to the Board of Directors the approval of all agreements and contracts between related parties submitted for its consideration. Regarding the framework agreement between EDP and EDP Renováveis, the contents of which are described in point 3.6 of this report, the Company Secretary was asked to give an opinion on the compliance of the agreement with the Articles of Association. His opinion was that it did.
Point 3.6 of this report includes a description of the fundamental aspects of the agreements and contracts between related parties the object of which does not pertain to the ordinary course of EDP Renováveis business.
Pursuant to Article 28 of the Articles of Association, the Audit and Control Committee consists of no fewer than three (3) and no more than five (5) directors. The majority of the members shall be independent directors. The committee currently consists of the members indicated in point 1.3.
The Audit and Control Committee is a permanent body and performs independent supervision of the work of the Board of Directors. The competences of the Audit and Control Committee are as follows:
• Proposing to the Board of Directors for submission to the General Meeting the appointment of Company Auditors and the terms of their hiring, scope of their work and revocation and renewal of their contracts;
• Supervising internal auditing activities;
In addition to the Articles of Association and the law, this committee is governed by the regulations approved on 4 June 2008 and also by the Board regulations. The committee's regulations are at the shareholders' disposal on www.edprenovaveis.com.
The committee shall meet at least once a quarter and additionallywhenever its Chairperson sees fit. In 2008, the Audit and Control Committee met eleven (11) times not only to monitor the closure of quarterly accounts in the first halfyear but also to familiarise itself with the preparation and disclosure of financial information, internal audit, internal control and risk management activities.
This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.
The meetings of the Audit and Control Committee shall be valid if at least half of the directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.
In 2008, the Audit Committee's activities included the following: (i) assessment of its own draft internal regulations, (ii) analysis of relevant rules to which the committee is subject in Portugal and Spain, (iii) appraisal of the independence and responsibilities of the external auditor for his/her duties, (iv) assessment of the external auditor's work, (v) supervision of the quality and integrity of the financial information in the financial statements and participation in the Executive Committee meeting at which these documents were analysed and discussed, (vi) drafting of an opinion in the individual and consolidated annual reports and accounts, (vii) supervision of the quality, integrity and efficacy of the internal control system, risk management and internal auditing and (viii) reflection on the corporate governance system adopted by EDP Renováveis.
The Audit and Control Committee found no constraints during its control and supervision activities.
A report on the activities of the Audit Committee in the year ended on 31 December 2008 is available to shareholders on www.edprenovaveis.com.
Following the recommendations of the CMVM, Article 12 of the Board regulations requires at least twenty-five percent (25%) of the Board members to be independent directors, who are considered to be those who can perform their duties without being conditioned by relations with the Company, its significant shareholders or directors and, if applicable, meet the requirements of applicable laws.
In addition, pursuant to Article 23 of the Articles of Association, the following may not be directors:
• People who are directors of or are associated with any competitor of EDP Renováveis and those who are related to the above. A company shall be considered to be a competitor of EDP Renováveis if it is directly or indirectly involved in the generation, storage, transmission, distribution, sale or supply of electricity or combustible gases and also those that have interests opposed to those of EDP Renováveis, a competitor or any of the companies in its Group, and directors, employees, lawyers, consultants or representatives of any of them. Under no circumstances shall companies belonging to the same group as EDP Renováveis, including abroad, be considered competitors;
• People who are in any other situation of incompatibility or prohibition under the law or Articles of Association. Under Spanish law, people, among others, who are i) aged under eighteen (18) years, (ii) disqualified, (iii) competitors; (iv) convicted of certain offences or (v) hold certain management positions are not allowed to be directors.
Each member of the Board of Directors is appointed by majority of the General Meeting for an initial period of three (3) years and may be re-elected once or more times for further periods of three (3) years. Nonetheless, pursuant to Article 23 of the Articles of Association and 137 of the Public Company Law, shareholders so wishing may group their shares until they constitute an amount of capital equal to or higher than the result of dividing it by the number of Board members and appoint those that, using only whole fractions, are deducted from the corresponding proportion. Those making use of this power cannot intervene in the appointment of the other members of the Board of Directors.
Given that the directors do not have to be elected on the same date, if there is a vacancy, pursuant to Article 23 of the Articles of Association and 137 of the Public Company Law, the Board of Directors may co-opt people from the shareholders, who will occupy the position until the first General Meeting, which shall ratify the co-opted director. Pursuant to Article 139 of the Public Company Law, the co-option of directors, as for other Board decisions, must be approved by absolute majority of the directors at the meeting.
Pursuant to Article 28 of the Articles of Association, the members of the Audit and Control Committee are appointed by the Board of Directors. The term of office of the members of the Audit and Control Committee is the same as their term as directors. The committee members, the majority of whom must be independent, can be reelected and discharged by the Board of Directors at any time. The term of office of the Chairperson of the Audit Committee is three (3) years, after which he may only be re-elected for a new term of three (3) years. Nonetheless, chairmen leaving the committee may continue as members of the Audit and Control Committee.
EDP Renováveis has signed no contracts with the members of the corporate bodies at the close of 2008.
Regarding related party transactions, EDP Renováveis and/or its subsidiaries have signed the contracts detailed below with EDP – Energias de Portugal, S.A. (hereinafter, EDP) or other members of its group not belonging to the EDP Renováveis subgroup.
The framework agreement was signed by EDP and EDP Renováveis on 7 May 2008 and came into effect when the latter was admitted to trading. The purpose of the framework agreement is to set out the principles and rules governing the legal and business relations existing when it came into effect and those entered into subsequently.
The framework agreement establishes that neither EDP, nor the EDP Group companies other than EDP Renováveis and its subsidiaries can engage in activities in the field of renewable energies without the consent of EDP Renováveis. EDP Renováveis shall have the world exclusive, with the exception of Brazil, where it shall engage in them jointly with EDP – Energias do Brasil, S.A., for the development, construction, exploitation, operation and maintenance of facilities or activities related to wind, solar, wave and/or tidal power and other renewable energy generation technologies that may be developed in the future. Nonetheless, the agreement excludes technologies being developed in hydroelectric power, biomass, cogeneration and waste in Portugal and Spain.
The framework agreement provides for the creation of a Related Party Transactions Committee to minimize conflicts of interest.
Finally, it lays down the obligation to provide EDP with any information that it may request from EDP Renováveis to fulfil its legal obligations and prepare the EDP Group's consolidated accounts.
The framework agreement shall remain in effect for as long as EDP directly or indirectly owns more than 50% of the share capital of EDP Renováveis or appoints more than 50% of its directors.
On 4 November 2008 EDP and EDP Renováveis signed an Executive Management Services Agreement.
The object of the contract is the provision by EDP of management services, including matters related to the day-to-day running of the Company. Four people were appointed with the purpose of forming the Company management with the CEO in the Executive Committee.
Under this contract, EDP Renováveis paid to EDP the amount of €485,100 for management services for
a seven-month period in 2008, which includes the remuneration of all the executive directors.
The initial duration of the contract is until 18 March 2011.
The finance agreements between EDP and EDP Renováveis, which were approved by the Related Party Transactions Committee at its meeting of 6 October 2008 and ratified by the Board of Directors at its meeting on 9 December 2008, are as follows.
EDP Energias de Portugal, Sociedade Anónima, sucursal en España (as the lender) signed a framework loan agreement with EDP Renováveis (as the borrower), which was ratified by the Board of Directors on 9 December 2008. Its object is capital investments, project finance and general objectives of the company.
Each loan requested under this agreement shall specify what it will be used for, the amount and repayment times. The type of interest applicable to loan agreements will be 10-year Mid Swap plus a differential of 2.85% a year.
Under this agreement, a loan agreement was signed on 30 December 2008 for \$ 500,000,000 falling due on 30 December 2018, its object being the finance of EDP Renováveis capital investments.
In addition, prior to the signing of the framework agreement, on 28 November 2008 a loan agreement was signed by the same parties for \$ 1.450.000.000, falling due on 28 November 2018, type of interest 10-year Mid Swap plus a differential of 1.25% a year. Its object is the finance of EDP Renováveis capital investments.
A counter-guarantee agreement was signed, under which EDP or EDP Energias de Portugal Sociedade Anónima, sucursal en España (hereinafter guarantor) undertakes with regard to EDP Renováveis, Nuevas Energias de Occidente, SL (hereinafter EDPR EU) and Horizon Wind Energy LLC (hereinafter EDPR NA) to provide corporate guarantees or request the issue of bank guarantees, on the terms and conditions requested by the subsidiaries, which have been approved case by case by the EDP Executive Board.
EDP Renováveis will be jointly liable for compliance by EDPR EU and EDPR NA.
The subsidiaries of EDP Renováveis undertake to indemnify the guarantor for any losses or liabilities resulting from the guarantees provided under the agreement and to pay an
annual fee of 0.5% in the case of bank guarantees and 0.25% in the case of corporate guarantees on the amount guaranteed. Nonetheless, certain guarantees issued prior to the date of approval of these agreements have different conditions.
The agreement may be terminated (i) by any party at any time, whenever there are no guarantees in effect, or (ii) if any of the subsidiaries ceases to be controlled by the guarantor with regard to the guarantees provided to said subsidiary.
EDP Energias de Portugal, Sociedade Anónima, sucursal en España (hereinafter EDP Sucursal) and EDP Renováveis signed an agreement on a mandate from EDP Renováveis to EDP Sucursal to manage its cash accounts. The agreement also regulates a current account between EDP Sucursal and EDP Renováveis, with the following types of interest:
The duration of the agreement is one year as of date of signing and it is renewable tacitly for equal periods.
On 29 and 31 December 2008, EDP Renováveis, as the lender, and EDP Finance BV (hereinafter EDP BV), as the borrower, entered into two finance agreements due on 5 January 2009 at one-day Euribor with a differential of 0.1%.
The first of the financing agreements totalled € 53,025,042.50 at 2.618% interest. The second was € 30,000,000 at 1.85% interest.
On 14 May 2008, EDP and EDP Renováveis signed an agreement under which the former granted to the latter a non-exclusive license for the trademark "EDP Renováveis" for use in the renewable energy market and related activities.
In return for the granting of the trademark license, EDP Renováveis will pay to EDP fees calculated on the basis of the proportion of the costs pertaining to the former in the Group's annual budget for image and trademark services, which are subject to annual review. The fee established for 2008 was € 1.5 million.
The licence is granted indefinitely and shall remain in effect until the expiry of EDP's legal ownership of the trademark or until EDP ceases to hold the majority of the capital or does not appoint the majority of directors of EDP Renováveis. EDP may also terminate the agreement in case of non-payment or breach of contract.
The licensing agreement is restricted by the terms of the framework agreement.
On 4 June 2008, EDP and EDP Renováveis signed a consultancy service agreement.
The object of the agreement is the provision by EDP to EDP Renováveis, through EDP Sucursal, of consultancy services in the areas of legal services, internal control systems, financial reporting, taxation, sustainability, regulation and competition, risk management, customer relations and financial management and operational consultancy in the areas of human resources, human resource management, information systems, brand and communication, energy planning, accounting, corporate marketing and organisation.
The price of the agreement is calculated as the cost incurred by EDP plus a margin. For the first year, it was fixed at 8% by an independent expert on the basis of market research. For 2008 the estimated cost of these services is € 2,021,724.
The duration of the agreement is one (1) year tacitly renewable for equal periods.
On 13 May 2008, EDP Inovação, S.A. (hereinafter EDP Inovação), an EDP Group company, and EDP Renováveis signed an agreement regulating relations between the two companies regarding projects in the field of renewable energies (hereinafter the R&D Agreement).
The object of the R&D Agreement is to prevent conflicts of interest and foster the exchange of knowledge between companies and the establishment of legal and business relationships. The agreement forbids EDP Group companies other than EDP Inovação to undertake or invest in companies that undertake the renewable energy projects described in the agreement.
The R&D Agreement establishes an exclusive right on the part of EDP Inovação to projects to develop new renewable energy technologies that are already in the pilot or economic and/or commercial feasibility study phase, whenever EDP exercises its option to undertake them.
The agreement shall remain in effect for as long as EDP directly or indirectly maintains control of more than 50% of both companies or appoints the majority of the members of the Board and Executive Committee of the parties to the agreement.
On 1 January 2006, Hidroeléctrica del Cantábrico, S.A. (hereinafter HC), an EDP Group company, and EDPR EU, the leading company in the European platform of the EDP Renováveis subgroup, signed a management support service agreement.
The object of the agreement is the provision by HC to EDPR EU of tax, legal management, human resource management, occupational health and safety, system support, environment and auditing advisory services.
The remuneration paid to HC by EDPR EU in the form of fees for management support services in the year ended on 31 December 2008 was € 1,588,000.
The duration of the agreement is five (5) years from date of signing. It shall be tacitly renewed for periods of one (1) year whenever neither party renounces it fifteen (15) days in advance of its initial expiry or any of its extensions.
On 1 January 2003, Enernova – Novas Energias, S.A. (hereinafter Enernova), leader of the EDP Renováveis subgroup in Portugal, and EDP Valor – Gestão Integrada de Recursos, S.A. (hereinafter EDP Valor), an EDP Group company, signed a management support service agreement.
The object of the agreement is the provision to Enernova by EDP Valor of services in the areas of procurement, economic and financial management, fleet management, property management and maintenance, insurance, occupational health and safety and human resource management and training.
The remuneration paid to EDP Valor by Enernova and its subsidiaries for the services provided in 2008 totalled € 623,451.50.
The initial duration of the agreement was five (5) years from date of signing and it was tacitly renewed for a new period of five (5) years on 1 January 2008.
Either party may renounce the contract with one (1) year's notice.
In harmony with the EDP Group's objectives and strategy, reinforced by the admission to training of EDP Renováveis, the EDP Renováveis Group decided to set up a voluntary internal financial reporting control system abiding by international standards in order to promote the reinforcement of controls to ensure the reliability and integrity of financial information.
The activities on the European platform began in late 2007. The Control System of Finance Report (hereinafter SCIRF) was implemented in 2008 following several lines of action:
A reputed international entity collaborated within the European Platform.
In addition, in 2008 the first phase of the implementation of the system took place on the North American Platform (EDPR NA). This phase also received the support of a specialised consultant and consisted of a survey of controls in the three main areas of the model, the first two of which follow the COSO benchmark and the last the COBIT:
The EDP Renováveis Internal Audit Department is responsible for the SCIRF. Its functions include the implementation, monitoring and improvement of the system to ensure the reliability and integrity of financial information.
The main risks and uncertainties that can affect the operation performance of EDP Renováveis are the following:
EDP Renováveis business is focused on the production of electricity from renewable energy sources. The amount of energy generated by and the profitability of wind farms are dependent on climatic conditions, which vary across the locations of the wind farms, the seasons and years. Because turbines will only operate when wind speeds fall within certain specific ranges that vary by turbine type and manufacturer, if wind speeds fall outside or towards the lower end of these ranges, energy output at wind farms would decline.
Variation and fluctuations in wind conditions at wind farms may result in seasonal and other fluctuations in the amount of electricity that is generated and consequently the results of operations. Furthermore, a sustained decline in wind conditions could lead to reductions in operational efficiency, energy production and profitability.
Remuneration for electricity sold by EDP Renováveis wind farms depends, at least in part, on market prices for electricity. Market prices may be volatile as they are affected by various factors, including the cost of fuels, average rainfall levels, the cost of power plant construction, the technological mix of installed generation capacity and user demand. Therefore, a decline in market prices below anticipated levels could have a material adverse effect on EDP Renováveis business, financial condition or results of operations. EDP Renováveis currently uses various financial and commodity hedging instruments in order to reduce the exposure to fluctuating electricity prices. However, it may not be possible to successfully hedge the exposures or the company may face other difficulties in executing the hedging strategy.
EDP Renováveis is also exposed to fluctuations in interest rates through the financing, in particular, shareholder loans from the EDP Group and financing from institutional investors in connection with its Partnerships Structures in the case of the U.S. operations, as well as project financing and third party loans from entities outside the EDP Group. This risk can be mitigated using hedging instruments, including interest rate swaps, but it cannot be guaranteed that the hedging efforts will operate successfully. Finally, currency fluctuations may also have a material adverse effect on the financial condition and results of operations. EDP Renováveis may attempt to hedge against currency fluctuations risks by matching revenue and costs in the same currency, as well as by using various hedging instruments, including forward foreign exchange contracts. However, there can be no assurance that the company's efforts to mitigate the effects of currency exchange rate fluctuations will be successful.
The capital investment required to develop and build a wind farm is very high and generally varies based on the cost of the necessary fixed assets, such as turbines. The price of such equipments and/or civil construction works may increase, or continue to increase as in the case of turbines, if the market demand for such equipment or works is greater than the available supply, or if the prices of key component commodities and raw materials used to build such equipments increases.
The development and profitability of renewable energy projects is dependent on policies and regulatory frameworks that support such development. The jurisdictions in which EDP Renováveis operates provide various types of incentives that support the sale of energy generated from renewable sources.
Support for renewable energy sources has been strong in previous years, and both the European Union and various U.S. federal and state bodies have regularly reaffirmed their desire to continue and strengthen such support. However, it cannot be guaranteed that support will be maintained or that the electricity produced by future renewable energy projects will benefit from statutory purchase obligations, tax incentives, or other support measures for the generation of electricity from renewable energy sources.
Wind farms are subject to strict international, national, state, regional and local regulations relating to the development, construction, licensing and operation of power plants. Among other things, these regulate: land acquisitions, leasing and use; building, transportation and distribution permits; landscape and environmental permits; and regulations on energy transmission and distribution network congestions. If the relevant authorities in the jurisdictions in which EDP Renováveis operates fail to continue to support, or reduce their support for the development of wind farms, such actions could have a material adverse effect on the business.
Wind turbine is a significant part of a wind farm's Capital Expenditures (around 70-80%). The main risks associated to wind turbines are:
• Price risk: this occurs when the supply of wind turbines cannot meet the growing demand, and prices rise sharply, impacting profitability of new wind farms;
• Quantity risk: when no wind turbines are available for the construction of new wind farms.
In order to cope with the risks associated to its activities, EDP Renováveis has implemented several types of actions or strategies adapted to minimise the mitigation of the relevant types of risks to which it is exposed or benefits from global risk management policies used at the EDP Group level. The business unit responsible for dealing and accompanying the risk management processes is the Risk Management Directory of EDP Renováveis. The risk management of EDP Renováveis concerns the following areas of risk:
Variations in wind conditions are due to seasonal fluctuations, and these fluctuations have an impact on the amount of electricity generated. EDP Renováveis mitigates this risk by the geographical diversification of its wind farm in each country. This "portfolio effect" enables to offset wind variations in each area and to keep the total energy generation relatively steady.
The businesses of the EDP Renováveis Group are exposed to a variety of financial risks, including the effects of changes in market prices, foreign exchange and interest rates. The unpredictability of the financial markets is analysed on an on-going basis in accordance with the EDP Group's risk management policy. Financial instruments are used to minimise potential adverse effects resulting from the interest rates and foreign exchange rate risks on its financial performance.
The financial risks are assessed and managed by EDPR, being its execution undertaken by the Financial Department of EDP (following strictly the policies and guidelines mandated by EDPR, under the terms of the outsourcing of management services agreement "Contrato de Prestaçao Serviços Consultoria" between EDPR and EDP), in accordance with the policies approved by the Board of Directors. The Financial Department identifies, evaluates and submits to the Board for approval, hedging mechanisms appropriate to each exposure.
The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits.
The Group operates internationally and is exposed to the exchange rate risk resulting from investments
in subsidiaries whose functional currency is the U.S. dollar. Currently, the exposure to the U.S. dollar/euro currency fluctuation risk results principally from the shareholding in EDPR NA.
EDP Group's Financial Department is responsible for monitoring the evolution of the U.S. dollar, seeking to mitigate the impact of currency fluctuations on the financial results of the Group companies and consequently, on consolidated net profit, using exchange rate derivatives and/or other hedging structures. The policy implemented by the Group consists of undertaking derivative financial instruments for the purpose of hedging foreign exchange risks with characteristics similar to those of the hedged item. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that gave rise to them is evaluated.
The Group's operating and financial cash flows are substantially independent from the fluctuation in interest rate markets.
The purpose of the interest rate risk management policies is to reduce the financial charges and the exposure of debt cash flows from market fluctuations through the settlement of derivative financial instruments to fix the debt interest rates. In the floating-rate financing context, the Group contracts interest rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating-interest rate loans into fixed-interest rate loans. All these operations are undertaken on liabilities in the Group's debt portfolio and are mainly perfect hedges through a high correlation between changes in fair value of the hedging instrument and changes in fair value of the interest rate risk or upcoming cash flows.
The EDP Renováveis Group has a portfolio of interest rate derivatives with maturities between approximately 1 and 10 years. The EDP Group's Financial Department undertakes sensitivity analyses of the fair value of financial instruments to interest rate fluctuations.
As of December 31, 2008, EDP Renováveis faced limited market price risk. In the case of EDPR NA, most prices are fixed and principally determined by long-term power purchase agreements. In the case of Spain, electricity is sold directly on the daily market at spot prices plus a pre-defined regulated premium. EDP Renováveis also has an option of selling this electricity through regulated tariffs, guaranteeing minimum prices. In 2008 the company closed a hedge in order to mitigate pool price
fluctuations in Q4 in Spain, which mitigates the risk related to fluctuations in pool prices. In the remaining countries, prices are mainly determined through regulated tariffs (France and Portugal) or determined by long-term power purchase agreements (Brazil, Poland, Romania and Belgium).
EDP Renováveis belongs to the most prestigious wind energy associations, both at national and international level. EDP Renováveis is member of "La Asociación Empresarial Eólica" (Spain), "APREN" – Associação Portuguesa de Produtores de Energia Eléctrica de Fontes Renováveis (Portugal), Le Syndicat des Energies Renouvelables (France), ANEV (Italy) and PIGEO (Poland). These associations are important players in the process of promoting the adjustment of regulations to the needs of the renewable energy sector.
The EDP Renováveis Group policy in terms of the counterparty credit risk on financial transactions is managed by an analysis of the technical capacity, competitiveness, credit notation and exposure to each counterparty. Counterparties in derivatives and financial transactions are restricted to high-quality credit institutions, therefore, it cannot be considered that there is any significant risk of counterparty non-compliance and no collateral is demanded for these transactions.
In the specific case of EDPR EU, credit risk is not significant due to the limited average collection period for customer balances and the quality of its debtors. In Europe, main customers are operators and distributors in the energy market of their respective countries
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
Given the current condition of the debt market, it could be difficult to cover the financial requirements needed to carry out the Group's activities.
The liquidity policy followed ensures compliance with payment obligations acquired, through maintaining sufficient credit facilities and having access to the EDP Group credit facilities.
The last few years have been marked by the difficulties of the wind turbine industry in catching up with booming demand. In this high growth environment, wind power generators have endured difficulties to secure the supply of wind turbines. In response, EDP Renováveis has shifted from national and project-driven agreements to multi-year frame agreements covering several regions with built in flexibilities. This trend, however, seems to be reversing as turbine demand slows down.
EDP Renováveis uses a mix of turbine suppliers in order to reduce its dependency on any one supplier. At present EDP Renováveis is one of the generators with a more diversified portfolio, with Vestas and Gamesa the most important suppliers. The large range of EDP Renováveis suppliers allows the company to avoid technological risk of each turbine supplier. Additionally, EDP Renováveis has the required size to contract with a large range of suppliers. The following chart represents the share of EDP Renováveis current installed turbines plus contracted ones until 2010.
EDP Renováveis has been securing its wind turbines by establishing long-term flexible agreements with several major turbine vendors. Framework agreements enabled EDP Renováveis to have turbines available when required, but in the current context, they could prevent the company from capturing a drop in turbine prices, if this occurs. For this reason, EDP Renováveis is renegotiating framework agreements as well as negotiating more flexible agreements for future years.
EDP Renováveis mitigates wind turbine performance risk by using a mix of toptien suppliers, which minimises technological risk. Additionally, wind turbine performance risk is reduced by signing strict and thorough O&M contracts with suppliers, usually for a 5-year period. Additionally, technical warranties are signed with the turbine suppliers, in order to guarantee that the performance of the turbine will be optimal. The availability and the power curve of each turbine is adequately guaranteed with "liquidated damages" clauses that establish penalties to be paid by the supplier when the minimum availability is not met (usually 95 or 97%) or the power curve is not reached. Finally, wind turbine performance risk is also mitigated with an adequate preventive and scheduled maintenance.
The Audit and Control Committee is responsible for proposing to the Board of Directors for submission to the General Meeting the appointment of the Company auditors and the terms of their contracts, scope of their duties and revocation and renewal of their contracts.
The Audit and Control Committee remains in contact with the auditors on matters that may pose a risk to their independence and any other matters related to the auditing of accounts. It also receives and stores information on any other matters provided for in legislation on audits and in auditing standards in effect at any time.
The auditor appointed by EDP Renováveis at the moment is KPMG Auditores S.L.
The Audit and Control Committee assessed the performance of the external auditor in providing the services hired by the Company and made a positive evaluation of their quality, considering that they meet applicable standards and that it is advisable to maintain the same auditor.
The work of the external auditor, including reports and audits of its accounts, was supervised and evaluated in accordance with applicable rules and standards, in particular international auditing standards.
In spite of the fact that EDP Renováveis was recently admitted to trading on the Eurolist by Euronext Lisbon, it has sought to introduce measures to ensure its good governance and that of its companies, including the prevention of improper practices, especially in the fields of accounting and finance.
The Board of Directors of EDP Renováveis therefore decided to provide its employees with a direct, confidential communication channel for them to report any presumed unlawful practices or alleged accounting or financial irregularities occurring in their company. These communications go to the Audit and Control Committee.
EDP Renováveis creation of this channel for whistle-blowing on irregularities in financial and accounting practices is essentially intended:
Contact with the Company's Audit and Control Committee is only possible by email and post, and access to information received is restricted.
Any complaint addressed to the Audit and Control Committee will be kept strictly confidential and the whistle-blower will remain anonymous, provided that this does not prevent the investigation of the complaint. S/he will be assured that the Company will not take any retaliatory or disciplinary action as a result of exercising his/her right to blow the whistle on irregularities, provide information or assist in an investigation.
4.1. Description and competences of the General Meeting of Shareholders
The General Meeting of Shareholders is the Company's highest governing body and is a meeting of shareholders that, when properly convened, has the power to deliberate and adopt, by majority, decisions on matters that the law and Articles of Association reserve for its decision and are submitted for its approval. In particular, it is responsible for:
The decisions of the General Meeting are binding on all shareholders, including those voting against and those who did not participate in the meeting.
A General Meeting may be ordinary or extraordinary. In either case, it is governed by the law and Articles of Association.
All shareholders, irrespective of the number of shares that they own, may attend a General Meeting and take part in its deliberations with right to speak and vote.
In order to exercise their right to attend, shareholders must have their shares registered in their name in the Book Entry Account at least five (5) days in advance of the date of the General Meeting. EDP Renováveis therefore does not even establish the need to block shares as a requirement for shareholders to participate in the General Meeting.
Moreover, although there is no express provision on the matter in the Articles of Association, in the event of the suspension of a General Meeting, EDP Renováveis plans to adopt Recommendation I.2.2 of the Corporate Governance Code and not require the blocking of shares more than five days in advance.
Any shareholder with the right to attend may send a representative to a General Meeting, even if this person is not a shareholder. Power of attorney is revocable. The Board of Directors may require shareholders' power of attorney to be in the Company's possession at least two (2) days in advance, indicating the name of the representative.
Power of attorney shall be specific to each General Meeting, in writing or by remote means of communication, such as post.
Each share entitles its holder to one vote.
Shares issue withiut this right do not have voting rights, with exception of cases set forth by current legislation.
There is no employee share-owning system at EDP Renováveis and so no relevant control mechanisms
on the exercise of voting rights by employees or their representatives have been set up.
Shareholders may vote on points on the agenda, relating to any matters of the Shareholder's competente, by mail or electronic communication. It is essential for their validity that they be received by the company by midnight of the day before the date scheduled for the first calling to order of the General Meeting.
Votes by mail shall be sent in writing to the place indicated on the invitation to the meeting accompanied by the documentation indicated in the Shareholder's Guide.
In order to vote by electronic communication, shareholders must express this intention to the Chairperson of the General Meeting of the in the form indicated in the invitation to the meeting, sufficient time in advance to permit the vote within the established time limit. They will then receive a letter containing a password for voting by electronic communication within the time limit and in the form established in the call of the General Meeting.
Remote votes can be revoked subsequently by the same means used to cast them within the time limit established for the purpose or by personal attendance at the General Meeting by the shareholder who cast the vote or his/her representative.
The Board of Directors has approved a Shareholder's Guide for the first General Meeting, detailing mail and electronic communication voting forms among other matters. It is at shareholders' disposal on www.edprenovaveis.com.
Both ordinary and extraordinary General Meetings are validly constituted when first called to order if the shareholders present or represented own at least thirty-three percent (33%) of the subscribed capital with voting rights and when called to order a second time if the shareholders present or represented own at least twenty-five (25%) of the subscribed capital with voting rights.
Nonetheless, for ordinary or extraordinary General Meetings to be able to pass valid decisions on the issue of bonds, increases or reductions in share capital, conversion, merger or split of the Company and, in general, any amendments to the Articles of Association, shareholders representing fifty percent (50%) of the subscribed capital with voting rights must be present or represented when the meeting is first called to order and thirty-three percent (33%) of the subscribed capital with voting rights when the meeting is called to order a second time.
An ordinary or extraordinary General Meeting shall adopt its decisions by simple majority of votes of shares with voting rights present or represented. Nonetheless, for the decisions referred to in the previous paragraph, when shareholders representing less than fifty percent (50%) the subscribed capital with voting rights are present or represented, decisions may only be validly adopted with a vote in favour of two-thirds (2/3) of the capital with voting rights present or represented at the meeting.
The Chairperson of the General Meeting is appointed by the meeting itself and must be a person who meets the same requirements of independence as for independent directors. The appointment is for three years and s/he may be re-elected once only.
Since 4 June 2008, the position of Chairperson of the General Meeting has been held by Rui Chancerelle de Machete, whose work address is Luso-American Development Foundation, Rua do Sacramento à Lapa, 21, 1249-090 Lisbon.
In addition to the Chairperson, the Board of the General Meeting is made up of the Chairperson of the Board of Directors, or his replacement, the other directors and the Secretary of the Board of Directors.
The position of Secretary of the General Meeting is occupied by the non-member Secretary of the Board of Directors, Emilio García-Conde Noriega, whose work address is that of the Company.
The Chairperson of the General Meeting of EDP Renováveis has the appropriate human and logistical resources for his needs, considering the economic situation of EDP Renováveis, in that, in addition to the resources from the Company Secretary and the legal support provided for the purpose, the Company hires a specialised entity to collect, process and count votes.
In 2008, the remuneration of the Chairperson of the General Meeting of EDP Renováveis was € 0.
Given that EDP Renováveis has been a listed company since 4 June 2008 with its shares admitted to trading on Eurolist by Euronext Lisbon, shareholders have access to corporate governance information on www.edprenovaveis.com. Extracts of General Meeting minutes and the invitation, agenda, motions submitted to the General Meeting and forms of participation shall be placed at shareholders' disposal five (5) days after they are held. The publishing of the minutes will begin
after the first General Meeting held after the Company's admission to trading.
Given the personal nature of the information involved, the history does not include attendance lists at general meetings, although, in accordance with CMVM Circular no. 156/EMIT/DMEI/2009/515, when General Meetings are held, EDP Renováveis plans to replace them by statistical information indicating the number of shareholders present and distinguishing between the number of physical presences by mail.
EDP Renováveis considers that materially relevant information to investors does not include all the content of the minutes. Indeed, their publication in full could be used for purposes unrelated to the interest of the company, shareholders, investors and the market in general.
EDP Renováveis therefore publishes on its website an extract of the minutes of General Meetings with all information on the constitution of the General Meeting and decisions made by it, including motions submitted and any explanations of votes.
The website also provides EDP Renováveis shareholders with information on: i) requirements for participating in the General Meeting, ii) mail and electronic communication votes iii) information available at the registered office.
The Company has taken no defensive measures that might seriously affect its assets in any of the cases of a change in control in its shareholder structure or the Board of Directors.
The Articles of Association contain no limitations on the transferability of shares or voting rights in any type of decision and no limitations on membership of the governing bodies of EDP Renováveis. Neither are there any decisions that come into effect as a result of a takeover bid.
The fact that the Company has not adopted any measures designed to prevent successful takeover bids is therefore in line with Recommendation I.6.1 of the CMVM Code of Corporate Governance.
On the other hand, EDP Renováveis has not entered into any agreements (current or future) subject to the condition of a change in control of the Company.
Finally, there are no agreements between the Company and members of its Board of Directors or managers providing for compensation in the event of resignation
of discharge of directors or in the event of resignation, dismissal without just cause or cessation of the working relationship following a change in control of the Company.
Pursuant to Article 26 of the Company's Articles of Association, the remuneration of the members of its Board of Directors shall consist of a fixed amount to be determined by the General Meeting for the whole Board and expenses for attending Board meetings.
The above article also establishes the possibility of the directors being remunerated with Company shares, share options or other securities granting the right to obtain shares, or by means of share-indexed remuneration systems. In any case, the system chosen must be approved by the General Meeting and comply with current legal provisions.
The Appointments and Remunerations Committee is responsible for proposing to the Board of Directors, albeit not bindingly, the system, distribution and amount of remuneration of the directors on the basis of the overall amount of remuneration authorised by the General Meeting. It also may propose to the Board the terms of contracts with the directors. The distribution and exact amount paid to each director and the frequency and other details of the remuneration shall be determined by the Board on the basis of a proposal from the Appointments and Remunerations Committee.
The maximum remuneration approved by the General Meeting of Shareholders for 2008 for all the members of the Board of Directors is € 2,500,000.
Although remuneration for all the members of the Board of Directors is provided for, the members of the Executive Committee, with the exception of the CEO (who devotes most of his/her work to the activity of EDP Renováveis) are not remunerated and so in 2008 the remuneration paid by EDP Renováveis to these directors was zero.
This corporate governance practice for remuneration is in line with the model adopted by the EDP Group, in which executive directors of EDP do not receive any remuneration directly from the group companies on whose governing bodies they serve, but rather through EDP.
Nonetheless, in line with the above corporate governance practice, EDP Renováveis has signed an Executive Management Services Agreement with EDP, under which the Company bears a cost for the provision of said services corresponding to the remuneration defined for the executive members of the Board of Directors.
The fees in the management service contract are divided into a fixed and a variable part. The variable part is divided into an annual and a multi-annual component, each of which is calculated on the basis of shareholders' return, ability to create value, increases in installed capacity (MW), growth in net profits and EBITDA.
The remuneration of the CEO has a fixed and a variable part. The variable part is divided into an annual and a multi-annual component, each of which is calculated on the basis of shareholders' return, ability to create value, increases in installed capacity (MW), growth in net profits and EBITDA.
On the other hand, the non-executive directors only receive fixed remuneration, which is calculated on the basis of their work exclusively as directors or their work in this position together with their membership of the Appointments and Remunerations Committee, Related Party Transactions Committee and the Audit and Control Committee.
The remuneration of the members of the Board of Directors for the year ended on 31 December 2008 was as follows:
| Remuneration | Fixed | Variable | Total |
|---|---|---|---|
| CEO* | € 235,200.00 | – € 235,200.00 | |
| Executive directors** | – | – | – |
| Non-executive directors | € 277,083.33 | – € 277,083.33 | |
| Total | € 512,283.33 | – € 512,283.33 |
* The remuneration for 2008 was paid the CEO by EDP on the account of EDP Renováveis, which will reimburse EDP through the management service agreement signed by the parties.
** Even though the Executive Committe has not received any funding from the company, due to the contracts for their directive services provided in the written draft 3.6.2, EDP Renovaveis paid EDP 249.900 Euros for the services provided by the Executive Committee apart from the CEO.
As 2008 was the Company's first full year, only fixed remuneration was paid, while the variable part will be paid in 2009.
The retirement savings plan for the members of the Executive Committee acts as an effective retirement supplement and corresponds to 5% of their annual salary.
The directors do not receive any relevant non-monetary benefits as remuneration.
The Nomination and Remuneration Committee appointed by the Board of Directors is responsible for defining the draft remuneration policy for the members of the Board of Directors. This committee defined the directors' remuneration and sought to ensure that it reflected the performance of all members in each year (variable annual remuneration) and their performance throughout
their terms of office by means of a variable component consistent with the maximisation of the Company's long-term performance (multi-annual variable remuneration). This is intended to ensure alignment of the Board of Directors' behaviour with the shareholders' interests. A statement on remuneration policy will be submitted to the next General Meeting, for appreciation as a separate point on the agenda of a consultative nature. It is currently in force (with no alterations), on the following terms:
Fixed remuneration for the CEO is € 384,000 gross annual salary and will be determined for the remaining members on terms fixed by the EDP Group.
Variable annual remuneration for each Executive Committee member may vary between 0% and 100% of their gross, fixed, annual remuneration. The amount is determined on the basis of the following indicators on each year of their term: relative performance of total shareholder return of EDP Renováveis vs. Eurostoxx Utilities, PSI-20 and Iberdrola Renováveis 2008, real capacity to generate shareholder value at EDP Renováveis, increase in installed capacity (MW), growth in net profits and EDP Renováveis EBITDA in 2008.
Multi-annual variable remuneration for all members of the Executive Committee may total from 0% to 100% of their gross annual remuneration and is based on an accumulated annual evaluation of the directors' performance in achieving economic sustainability for the EDP Renováveis Group. Although this multi-annual remuneration is calculated annually, it only comes into effect at the end of their term of office if at least 90% of the strategic goals have been met. This is assessed on the basis of performance and a comparison with strategic benchmarks. In fact, the factors used to calculate the remuneration component are the relative performance of the EDP Renováveis Group's market capitalisation vs. Eurostoxx Utilities and PSI-20 during the term, the EDP Renováveis Group's capacity to create value, the performance of the Sustainability Index applied to EDP Renováveis (DJSI method), the EDP Renováveis Group's image in the national and international markets, its capacity to change and adapt to new market requirements, fulfilment of strategic national and international targets and the EDP Renováveis Group's EBITDA vs. Eurostoxx Utilities during their term.
The time period considered for determining the multi-annual variable component of their remuneration (3 years), the use of qualitative criteria aimed at a strategic, medium-term perspective in the Company's development, the existence of a cap on variable remuneration and the relative weight of this component on total remuneration are decisive factors in fostering management performance that does not focus only on short-term objectives but
includes the medium and long term interests of the Company and its shareholders.
The retirement savings plan for the members of the Executive Committee acts as an effective retirement supplement and corresponds to 5% of their annual salary.
The directors do not receive any substantial non-monetary benefits as remuneration.
The Board of Directors is responsible for fixing managers' remuneration policy (as understood in Article 248-B(3) of the Securities Code) who do not belong to the governing or supervisory bodies.
The Board will therefore submit the managers' remuneration policy to the next General Meeting for appreciation. It is based on the following factors:
The General Meeting is responsible for appointing the Board of Directors, which appoints the Nomination and Remuneration Committee, which is responsible for submitting the statement on remuneration policy for the Company's corporate bodies.
The General Meeting's duties include appreciating the above statement.
Pursuant to Article 95 of the Public Company Law, the General Meeting is also required to evaluate the performance of the corporate public bodies and make an annual decision as whether to maintain confidence in their members.
All the members of the Appointments and Remuneration Committee will be present or represented at the first General Meeting of Shareholders of EDP Renováveis.
5.7. Proposal on the approval of plans on share remuneration and/or share purchase options or on the basis of share price fluctuations
The Company has not approved any plans for share remuneration or share purchase options or plans based on share price fluctuations.
For the year ended on 31 December 2008, the fees paid to KPMG Auditores, S.L. for auditing of the annual accounts, guarantee and reliability services, tax advisory and other services unrelated to audits are as follows:
| EDP Renováveis Group Euros |
|||||
|---|---|---|---|---|---|
| Country | Portugal | España EDPR NA | Otros | Total | |
| Auditing of accounts | 85,000 | 636,000 | 562,116 | 123,550 | 1,406,666 |
| Reliability guarantee services |
343,845 | 328,930 | 410,772 | 11,400 | 1,094,947 |
| Tax consultancy services |
7,470 | 120,000 | 687,360 | 40,840 | 855,670 |
| Legal auditing of accounts |
– | 46,400 | – | – | 46,400 |
| TOTAL | 436,315 1,131,330 1,660,248 | 175,790 3.403,683 |
The accounts audit services are those necessary for the issue of a legal opinion on the annual individual and consolidated accounts of the company and its subsidiaries in Spain and abroad.
On 15 May 2008, EDP announced approval by the Portuguese Stock Exchange Commission of the Prospectus for the inicial public offering (IPO) and admission to trading of EDP Renováveis shares on Eurolist by Euronext Lisbon. The IPO prospectus provided for a combined offering of up to 225,427,952 shares, representing up to 25% of EDP Renováveis share capital after a share capital increase (including the 29,403,646 in the subscription option of a supplementary batch of shares, which was not exercised) aimed at retail and institutional investors. The price interval for subscription of the shares in the PO was between € 7.40 and € 8.90 per share. On 2 June 2008, a final price of € 8.00 was announced, below the average value of the interval.
The following shares were placed at a special regulated market session for the EDP Renováveis IPO:
The quantity intended for the initial public offering was divided into three trenches: Segment A –EDP Group employees, Segment B – EDP shareholders and Segment C – the general public. EDP employees were given a 5% discount in the price fixed for EDP shareholders and the general public, i.e. they bought shares at € 7.60.
| EDP Renováveis, S.A. | |
|---|---|
| Shares | |
| Share Capital | € 4,361,540,810 |
| Face value | € 5.00 |
| No. of shares | 872,308,162 |
| Trading began | 4 June 2008 |
| Euronext Lisboa | |
| Reuters RIC | EDPR.LS |
| Bloomberg | EDPR.PL |
| ISIN | ES0127797019 |
In a year marked by a serious financial crisis, from the time they were admitted to trading on 4 June 2008, EDP Renováveis shares fell 37% and closed the year at € 5.00 each. In the same period, the PSI20, Dow Jones Eurostoxx Utilities and Euronext 100 fell by 40%, 33% and 39%, respectively and over the whole year totalled losses of 51%, 38% and 45% each.
During the year, 263,130,606 EDP Renováveis shares, corresponding to a turnover of approximately € 1.646 billion were traded. On average, at Euronext Lisboa, excluding the first day of listing, when almost 50 million shares were traded, EDP Renováveis liquidity was around 1.5 million shares a day. Thanks to the company's high liquidity and market capitalisation, on 1 July 2008, less than a month after it was listed, it was included in the main Portuguese share index, the PSI20.
EDP Renováveis ended the year with a market capitalisation of € 4.4 billion, making it the fourth largest company in the main Portuguese share index.
| EDP Renováveis shares on Euronext Lisboa (euros) | 2008 | |
|---|---|---|
| Opening price | 8.00 | |
| Closing price | 5.00 | |
| Highest price | 8.00 | |
| Lowest price | 3.45 | |
| Variation in price and reference indexes | 2008 | since IPO |
| EDP Renováveis shares | -37% | -37% |
| PSI20 | -51% | -40% |
| Dow Jones Eurostoxx Utilities | -38% | -33% |
| Euronext 100 | -45% | -39% |
| Liquidity of EDP Renováveis shares on markets | ||
| Volume on Euronext Lisboa (€ millions) | 1,646.0 | |
| Daily average volume (€ millions) | 11.0 | |
| Number of shares traded | 215,951,049 | |
| Average number of shares traded (1) | 1,459,129 | |
| Total number of shares issued | 872,308,162 | |
| Number of own shares | 0 | |
| Market values of EDP Renováveis (€ millions) | ||
| Market capitalisation at end of period | € 4,364 |
(1) excluding first day of trading
The graph below shows the evolution in EDP Renováveis share prices over the year and all announcements and relevant events that may had an impact on them.
| Date | Description | |
|---|---|---|
| 1 | 04 Jun | First day of trading of EDP Renováveis shares |
| 2 | 11 Jun | EDP Renováveis enters the Brazilian market |
| 3 | 07 Jul | EDP Renováveis announces end of share stabilisation period |
| 4 | 21 Jul | EDP Renováveis announces provisional half-year operating data |
| 5 | 29 Jul | EDP Renováveis announces half-year profits |
| 6 | 03 Oct | Approval of one-year extension of PTCs applicable aplicable in the U.S. |
| 7 | 06 Oct | EDP Renováveis provides clarification on call for tenders in Galicia |
| 8 | 17 Oct | EDP Renováveis enters Romanian market |
| 9 | 23 Oct | EDP Renováveis announces provisional operating data for first nine months |
| 10 | 05 Nov | EDP Renováveis announces profits for first nine months |
| 11 | 06 Nov | EDP Group presents 2009-2012 Business Plan |
| 12 | 29 Dec | EDP Renováveis establishes new tax equity agreement for 2008 wind power projects in the U.S. |
| 13 | 31 Dec | EDP Renováveis provides clarification on call for tenders in Galicia |
The distribution of dividends is proposed by the Board of Directors of EDP Renováveis and authorised by decision of the company's General Meeting of Shareholders. As set forth in the Spanish Public Company Law, a dividend declared in each financial year may only be distributed from EDP Renováveis profits for that year or from distributable reserves and this distribution must not cause the assets of EDP Renováveis to fall below the value of the company's share capital.
As of 2011, EDP Renováveis expects to declare and pay dividends representing at least 20% of the profits for the year and to begin to do so for the financial year ending on 31 December 2010. The Board of Directors of EDP Renováveis may, if necessary, adjust this dividend policy in order to reflect changes in business strategy and capital needs, among other aspects. Any future dividends will depend on conditions at the time, including individual and consolidated net profits, earnings, the company's financial situation, availability of legally distributable funds and future prospects. As a result, no guarantee can be given that dividends will be proposed and declared in any particular year. Any dividends paid in the future may be subject to withholding of tax at source.
The provision to actual and potential investors of information about the Company is a structural aspect of EDP Renováveis policy and action as a listed company. The promotion of transparent, easily accessible, high-quality information is of fundamental importance to an accurate perception of the company's strategy, financial situation, accounts, assets and significant events.
EDP Renováveis therefore seeks to provide investors with information that will help them make informed, clear, concrete investment (or disinvestment) decisions.
This Company positioning is demonstrated by the relative frequency with which it publishes privileged information on significant events in its activities each year.
The periodic publication of information on the company, such as the quarterly announcement of profits, as required by law, is an important feature of the company's relationship with the market when it comes to the duty to inform.
EDP Renováveis considers its website a fundamental vehicle for circulating information and uses it to ensure that up-to-date information on its activities and results is always available.
EDP Renováveis therefore wishes to maintain a close, ongoing, transparent relationship with all market agents.
The EDP Renováveis Investor Relations Department (IRD) was set up in 2008 following the initial public offering and acts as an intermediary between the EDP Renováveis management team and a vast universe of shareholders, financial analysts, investors and the market in general. Its main purposes are to guarantee the principle of equality among shareholders, prevent asymmetries in access to information by investors and reduce the gap in the perception of the company's strategy and intrinsic value. This department is responsible for developing and implementing the company's communication strategy and maintaining an appropriate institutional and informative relationship with the financial market, the stock exchange at which EDP Renováveis shares are traded and their regulatory and supervisory bodies (CMVM – Comissão do Mercado de Valores Mobiliários in Portugal and CNMV – Comissión Nacional del Mercado de Valores in Spain)
The company's investors relations representative is Rui Teixeira, a member of the management team. The Investor Relations Department is coordinated by Rui Antunes and is located at the company's Madrid office. Its contact details are as follows
Calle Serrano Galvache, nº 56 Centro Empresarial Parque Norte Edificio Encinca – 4º Piso 28033 Madrid, Spain Telephone: +34 902 830 700 Fax: +34 914 238 410 E-mail: [email protected]
The IRD reports directly to the EDP Renováveis management team through its Chief Financial Officer (CFO) and its main duties are:
Although it was only formally set up after the initial public offering, the work of the Investor Relations Department began with its preparation. The Investor Relations
Department was part of the team that prepared the prospectus of the public offer for subscription and accompanied the Executive Committee on the roadshow to present EDP Renováveis to the world's main financial markets. For more than two weeks, two teams made up of members of the Executive Committee and management team of EDP Renováveis and the Investor Relations Department of EDP Renováveis and EDP visited more than 400 institutional investors in some 20 cities.
In addition to the presentation roadshow, following the initial public offering and after the end of the blackout period, the Investor Relations Department, carried out four roadshows (September, October, November and December) in the world's main financial cities (New York, Boston, San Francisco, London, Lisbon, Paris, Milan, Dublin, Brussels, Amsterdam, Stockholm, Oslo, Zurich, Geneva, etc) and several conferences, many devoted only to energy companies. It met with around 200 institutional investors in this period.
The Investor Relations Department also remained in permanent contact with the financial analysts who evaluate the company and with all shareholders and investors by mail, phone or face-to-face meetings. Every quarter, when the profits for the period are disclosed, the Investor Relations Department organises a conference call for all interested parties involving one or more members of the company's management team, in which it announces developments in EDP Renováveis activities and updates future prospects in the different business areas.
As required by CMVM regulations, EDP Renováveis provides all legal and corporate governance information on its website (www.edprenovaveis.com). The company website also carries updates on developments in the Group's activity and financial and operational data to ensure that shareholders, financial analysts and others have easy access to information.
This online information includes reports on accounts, announcements of relevant events, the articles of association, internal regulations of corporate bodies, the Group's shareholder structure, preparatory documentation for each General Meeting, fluctuations in EDP Renováveis share prices and other information of potential interest on the Group.
This information also includes data on the company, such as its name, status as a listed company, registered office, articles of association, regulations governing the management and supervisory bodies, names of the members of the corporate bodies and the market relations representative and the report on the Audit Committee's work. Contact details for the Investor Relations Department, its functions, financial statements and a calendar of company events are also available.
EDP Renováveis posts on its website invitations to the General Meeting and proposals for discussion and voting at the meeting.
EDP Renováveis also publishes online the annual report on the work of the Audit Committee.
The table below summarises the information posted on the website and in which languages used.
| Portuguese | English | Spanish | |
|---|---|---|---|
| Identification of the company | | | |
| Financial statements | | | |
| Regulations of the management and supervisory bodies |
| | |
| Annual report on the work of the Audit Committee |
| | |
| Investor Relations Department – functions and contact details |
| | |
| Articles of association | | | |
| Calendar of company events | | | |
| Invitation to General Meeting | | | |
| Proposals submitted for discussion and voting at General Meetings |
| | |
| Name | Positions |
|---|---|
| António Mexia | CEO of Galp Energia Chairperson of the Board of Petrogal Chairperson of the Board of Gás de Portugal Chairperson of the Board of Trangas Chairperson of the Board of Trangas-Atlântico CEO of EDP – Energias de Portugal, S.A. |
| Ana Maria Fernandes | Chairperson and CEO of Galp Power Member of the Board of Directors of Galp Energia Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| António Martins da Costa | CEO and Vice-Chairperson of EDP – Energias do Brasil, S.A. CEO and Chairperson of Horizon Wind Energy LLC Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| Nuno Alves | Director of the Foreign Exchange and Capital Division of Millennium BCP Investimento Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| João Manso Neto | Chairperson of the Executive Committee of EDP Produção CEO and Vice-Chairperson of Hidroeléctrica del Cantábrico, S.A. Member of the Executive Board of Directors of EDP – Energias de Portugal, S.A. |
| José Silva Lopes | Chairperson of the Board of Directors of Montepio Geral |
| António Nogueira Leite | Board member of Instituto Português de Relações Internacionais, UNL Director of Reditus, SGPS, S.A. Managing Director of José de Mello, SGPS, S.A. Director of Companhia União Fabril CUF, SGPS, S.A. Director of Quimigal, S.A. Director of CUF – Químicos Industriais,SA Director of ADP, S.A.-CUF Adubos Director of Sociedades de Explosivos Civic, SEC, S.A. Director of Brisa, S.A. Director of Efacec Capital, SGPS, S.A. Director of Comitur, SGPS, S.A. Director of Comitur Imobiliária, S.A. Director of Expocomitur-Promoções e Gestão Imobiliária, S.A. Director of Herdade do Vale da Fonte-Sociedade Agrícola, Turística e Imobiliária, S.A. Director of Sociedade Imobiliária e Turística do Cojo, S.A. Director of Sociedade Imobiliária da Rua das Flores, nº 59, S.A. Director of José de Mello Saúde, SGPS, S.A. Vice-Chairperson of the Advisory Board of Banif Banco de Investimentos Chairperson of the General Supervisory Board of Opex, S.A. Member of the Advisory Board of IGCP Vice-Chairperson of Fórum para a Competitividade |
| Rafael Caldeira Valverde | Vice-Chairperson of the Board of Directors of Banco Espírito Santo de Investimento, S.A. Member of the Executive Committee of Banco Espírito Santo de Investimento, S.A. |
|---|---|
| José Araújo e Silva | Director of Corticeira Amorin, SGPS, S.A. Member of the Executive Committee of Corticeira, SGPS, S.A. Member of the Board of Directors of Caixa Geral de Depósitos |
| Manuel Menéndez Menéndez | Member of the Board of Directors of EDP – Energias de Portugal, S.A. Chairperson of Cajastur Chairperson of Hidroeléctrica del Cantábrico, S.A. Chairperson of Naturgas Energia, S.A. Member of the Board of Directors of Nuevas Energias de Occidente, SL Representative of Peña Rueda, SL on the Board of Enagas, S.A. Member of the Board of Confederación Española de Cajas de Ahorro Member Board of Directors of UNESA |
| Jorge Santos | Full Professor of Economics at Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa Coordinator of the PhD course in Economics at ISEG Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa |
| Francisco José Queiroz de Barros de Lacerda |
Member of the Board of Império Insurance Company Member of the Supervisory Board of Millennium Bank in Poland Member of the Senior Board of Millennium Bank in Greece Vice-Chairperson of the Board of Directors of Millennium Bank in Turkey Chairperson of the Board of Directors of Millennium Bank in Romania Member of the Board of Directors of Millennium bcp Investimentos Member of the Board of Directors of Fundação Millenniumbcp . Director of Millennium bcp Member of the Board of Directors of Banco Comercial Português, S.A. Member of the General Board of Clube Naval de Cascais Chairperson of the Audit Committee of Dragopor – Associação Portuguesa da Classe Internacional Dragão Member of the Board of Mague-SPGS, S.A. |
| João Manuel de Mello Franco | Vice-Chairperson of José de Mello Imobiliária, S.A. Chairperson of the Board of Directors of Imopolis, S.A. Chairperson of the Board of Directors of José de Mello Residenciais & Serviços, S.A. Chairperson of the Board of Directors of Engimais, S.A. Director of Portugal Telecom SGPS, S.A. Chairperson of the Audit Committee of Portugal Telecom SGPS, S.A. Member of the Remuneration Committee of Portugal Telecom SGPS, S.A. Chairperson of the Corporate Governance Committee of Portugal Telecom SGPS, S.A. |
| João Lopes Raimundo | Chairperson of the Board of Directors of Banque BCP (Luxembourg) | ||||||
|---|---|---|---|---|---|---|---|
| Chairperson of the Board of Directors of Banque BCP (France) | |||||||
| Member of the Board of Banque Orive BCP (Switzerland) | |||||||
| Managing Director of Banco Comercial Português | |||||||
| Vice-Chairperson of the Board of Millennium Angola | |||||||
| Member of the Board de Directors of Banco Millennium BCP de Investimento | |||||||
| Daniel M. Kammen | Founding Director of the Renewable and Appropiate Energy Laboratory (RAEL) of University of California, Berkeley | ||||||
| Lecturer in Nuclear Energy at University of California, Berkeley | |||||||
| Lecturer in the Energy and Resources Group at University of California, Berkeley | |||||||
| Lecturer in public policy at the Goldman School of Public Policy, University of California, Berkeley | |||||||
| Class of 1935 Distinguished Chair in Energy | |||||||
| Codirector of the Berkeley Institute of the Environment | |||||||
| Member of the Executive Committee of the Energy Biosciences Institute | |||||||
| Name | Positions |
|---|---|
| António Mexia | N/A |
| Ana Maria Fernandes | N/A |
| António Martins da Costa | N/A |
| Nuno Alves | N/A |
| João Manso Neto | N/A |
| José Silva Lopes | Chairperson of the Board of Directors of Montepio Geral |
| António Nogueira Leite | Member of the Board of Instituto Português de Relações Internacionais, UNL |
| Director of Reditus, SGPS, S.A. | |
| Managing Director of José de Mello, SGPS, S.A. | |
| Director of Companhia União Fabril CUF, SGPS, S.A. | |
| Director of CUF – Químicos Industriais,SA | |
| Director of ADP, S.A. – CUF Adubos | |
| Director of Brisa, S.A. | |
| Director of Efacec Capital, SGPS, S.A. | |
| Director of Comitur, SGPS, S.A. | |
| Director of Comitur Imobiliária, S.A. | |
| Director of Expocomitur-Promoções e Gestão Imobiliária, S.A. | |
| Director of Herdade do Vale da Fonte-Sociedade Agrícola, Turística e Imobiliária, S.A. | |
| Director of Sociedade Imobiliária e Turística do Cojo, S.A. | |
| Director of Sociedade Imobiliária da Rua das Flores, nº 59, S.A. | |
| Director of José de Mello Saúde, SGPS, S.A. | |
| Vice-Chairperson of the Advisory Board of Banif Banco de Investimentos | |
| Chairperson of the General Supervisory Board of Opex, S.A. | |
| Member of the Advisory Board of IGCP | |
| Rafael Caldeira Valverde | Vice-Chairperson of the Board of Directors of Banco Espírito Santo de Investimento, S.A. |
| Member of the Executive Committee of Banco Espírito Santo de Investimento, S.A. | |
| José Araújo e Silva | Member of the Board of Directors of Caixa Geral de Depósitos |
| Manuel Menéndez Menéndez | Chairperson of Cajastur |
| Member of the Board of Confederación Española de Cajas de Ahorro | |
| Representative of Peña Rueda, SL on the board of Enagas, S.A. | |
| Member of the Board of Directors of UNESA |
| Jorge Santos | Full Professor of Economics at Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa Coordinator of the PhD course in Economics at ISEG Member of the Assembly of Representatives of Instituto Superior de Economia e Gestão, Universidade Técnica de Lisboa |
|---|---|
| Francisco José Queiroz de Barros de Lacerda |
Member of the General Board of Clube Naval de Cascais Chairperson of the Audit Committee of Dragopor – Associação Portuguesa da Classe Internacional Dragão Member of the Board of Mague-SPGS, S.A. |
| João Manuel de Mello Franco | Director of Portugal Telecom SGPS, S.A. Chairperson of the Audit Committee of Portugal Telecom SGPS, S.A. Member of the Remuneration Committee of Portugal Telecom SGPS, S.A. Chairperson of the Corporate Governance Committee of Portugal Telecom SGPS, S.A. |
| João Lopes Raimundo | Vice-Chairperson of the Board of Millennium Angola Member of the Board de Directors of Banco Millennium BCP de Investimento |
| Daniel M. Kammen | Founding Director of the Renewable and Appropiate Energy Laboratory (RAEL) of University of California, Berkeley Lecturer in Nuclear Energy at University of California, Berkeley Lecturer in the Energy and Resources Group at University of California, Berkeley Lecturer in public policy at the Goldman School of Public Policy, University of California, Berkeley Class of 1935 Distinguished Chair in Energy Codirector of the Berkeley Institute of the Environment Member of the Executive Committee of the Energy Biosciences Institute |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| EDP – Energias de Portugal, S.A. | Chairperson of the Executive Board of Directors |
Director | Director | Director | Director | |
| EDP – Gestão da Produção de Energia, S.A. |
Chairperson of the Board of Directors |
|||||
| EDP – Energias do Brasil, S.A. | Chairperson of the Board of Directors |
Director | Director | |||
| EDP Comercial – Comercialização de Energia, S.A. |
||||||
| EDP – Estudos e Consultoria, S.A. | Chairperson of the Board of Directors |
|||||
| EDP – Soluções Comerciais, S.A. | ||||||
| EDP – Imobiliária e Participações, S.A. |
Chairperson of the Board of Directors |
|||||
| EDP Serviner – Serviços de Energia, S.A. |
||||||
| EDP Valor – Gestão Integrada de Serviços, S.A. |
Chairperson of the Board of Directors |
|||||
| Sãvida – Medicina Apoiada, S.A. | Chairperson of the Board of Directors |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| SCS – Serviços Complementares de Saúde, S.A. |
Chairperson of the Board of Directors |
|||||
| Energia RE – Sociedade Cativa de Resseguro |
Chairperson of the Board of Directors |
|||||
| Enernova – Novas Energias, S.A. | ||||||
| Hidroeléctrica del Cantábrico, S.A. |
Director | Director | Vice-Chairperson of the Board of Directors |
Chairperson of the Board of Directors |
||
| Naturgás Energia, S.A. | 2nd vice-chairperson |
Chairperson of the Board of Directors |
||||
| Desarrolos Eólicos S.A. | Vice-chairperson of the Board of Directors |
|||||
| Genesa S.L. | Chairperson of the Board of Directors |
|||||
| EDP Investimentos, SGPS, S.A. | Chairperson of the Board of Directors |
|||||
| EDP Gás III, SGPS, S.A. | Chairperson of the Board of Directors |
|||||
| EDP Gás II, SGPS, S.A. (ex-NQF Gás) |
Chairperson of the Board of Directors |
|||||
| EDP Gás – SGPS, S.A. | Chairperson of the Board of Directors |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| Portgás – Sociedade de Produção e Distribuição de Gás, S.A. |
||||||
| Setgás – Sociedade de Produção e Distribuição de Gás, S.A. |
||||||
| Enagas, SGPS, S.A. | Chairperson of the Board of Directors |
|||||
| EDP Powerline | ||||||
| EDP Internacional, S.A. | Chairperson of the Board of Directors |
|||||
| Horizon Wind Energy LLC | Director | Chairperson of the Board of Directors |
Director | |||
| Nuevas Energias de Occidente, S.L. |
Chairperson of the Board of Directors |
Director | ||||
| Balwerk - Consultadoria Económica e Participações, Sociedade Unipessoal, Lda. |
Manager | |||||
| EDP – Investimentos, Gestão de Participações e Assistência Técnica, Lda. |
Director | |||||
| MRH Mudança e Recursos Humanos, S.A. |
Chairperson of the Board of Directors |
|||||
| EDP Energias de Portugal, Sucursal en España, Sociedad Anonima |
Permanent representative |
Permanent representative |
Permanent representative |
Permanent representative |
Permanent representative |
| António Mexia |
Ana Maria Fernandes |
António Martins da Costa |
Nuno Alves |
João Manso Neto |
Manuel Menéndez Menéndez |
|
|---|---|---|---|---|---|---|
| EDP Gás.com - Comércio de Gás Natural, S.A. |
Director | |||||
| EDP Finance BV | Representative | Representative | Representative | Representative | Representative | |
| Electricidade de Portugal Finance Company Ireland Lt. |
Director | |||||
| ENEOP – Eólicas de Portugal, S.A. |
Chairperson of the Board of Directors |
ANNUAL REPORT 2008 CORPORATE GOVERNANCE REPORT
Born in 1958. From 1979 to 1981, he held the position of assistant lecturer in the Department of Economics at the Université Genève (Switzerland), and from 1985 to 1989, he held the position of postgraduate lecturer in European Studies at Universidade Católica (Lisbon). From 1989 to 1991, he served as Assistant to the Secretary of State for Foreign Trade, and between 1991 and 1992, he served as vice-chairman of the Board of Directors of ICEP (the Portuguese Institute for Foreign Trade). Between 1992 and 1998, he served as a Director of Banco Espírito Santo de Investimentos, and in 1998 he was appointed as Chief Executive Officer of Gás de Portugal and Transgás, a position he held until 2000. From 2000 to 2001, he served as Vice-Chairman of the Board of Directors of Galp Energia, and from 2001 to 2004, he held the positions of Chief Executive Officer of Galp Energia and Chairman of the Board of Directors of Petrogal, Gás de Portugal, Transgás and Transgás-Atlântico. In 2004 he was appointed as Minister of Public Works, Transport and Communication by the Portuguese government. He was appointed Chief Executive Officer of EDP in March 2006.
He served as Chairman of the Portuguese Energy Association (APE) from 1999 to 2002, a member of the Trilateral Commission (1992-1998), vice-president of the Portuguese Industrial Association (AIP), Chairman of the General Supervisory Board of Ambelis and as a representative of the Portuguese government before the EU in the working group for the development of the pan-European networks.
He holds a degree in Economics from the Université Genève in Switzerland.
She began her professional career in the area of capital markets, investments and restructuring of companies in 1986, at Conselho – Gestão e Investimentos, a company in the Banco Português do Atlantico group. Between 1989 and 1991, she was a lecturer at the University of Oporto. Also in 1989, she worked in the Corporate Finance Arm of Sociedade de Investimentos EFISA, becoming a Director of Banco EFISA. In 1992, she moved to the Banco de Fomento e Exterior group as Director of several of the investment bank subsidiaries of the group. In addition, between 1996 to 1998, she was Corporate Finance Manager of BPI. From 1998 to 2005, she then moved to holding various positions within the GALP group, including Chairman and Chief Executive Officer of GALP Power between 2002 and 2005, and from 2004 to 2005, was also a member of the Board of Directors of GALP Energia. In 2006, she was appointed a member of the Board of Directors of EDP.
She holds a degree in Economics and a post-graduate degree in Finance, both from the University of Oporto, as well as a master of Business Administration degree from the Management School of Oporto.
Born in 1954. From 1976 to 1989, he held the position of Lecturer at the Superior Engineering Institute of Porto. In 1981 he joined EDP to work in the hydro-power generation sector, a position he held until 1989. From 1989 to 2003, he held various positions in the Banco Comercial Português group, namely as an executive member of the Board of Directors of its insurance companies and asset management operations, as well as being a General Manager of the bank. Between 1999 and 2003, he served as Deputy Chief Executive Officer and Vice-President of the Board of Directors of PZU (Poland). In 2003 he rejoined EDP as a general manager and was appointed as Chief Executive Officer and Vice-Chairman of the Board of Directors of EDP – Energias do Brasil, a position he held until being appointed as Chief Executive Officer and Chairman of the Board of Directors of Horizon in July 2007, a position he still holds. In March 2006, he was appointed as a member of the Executive Committee of EDP's Board of Directors. He holds a degree in Civil Engineering and a master of Business Administration degree from the University of Oporto, has completed executive education studies at INSEAD (Fontainebleau) and AESE (University of Navarra), and has completed the Advanced Management Programme at the Wharton School (University of Pennsylvania).
Born in 1958. From 1988 to 2006, he held various positions at Banco Comercial Português, including: Technician in the Studies and Planning Director (1988-1990), sub-Director of the Financial Investment Director (1990-1991), Director of Investor Relations (1991- 1995), Director of Private Retail Coordination (1995-2000), Director of Capital Markets for Banco CISF, Banco de Investimento do Banco Comercial Português (1996-1997). From 1999 to 2000, he served as Chairman of the Board of Directors of CISF Dealer, and in 2001 he was appointed as a Director of the money and capital markets division of Banco Millennium BCP Investimento (formerly Banco CISF). In 2006 he left Banco Millennium BCP Investimento to become the Chief Financial Officer of EDP, a position he still holds.
He holds a degree in Naval Architecture and Engineering and a master of Business Administration degree, both from the University of Michigan.
Born in 1958. From 1981 to September 2002, he held various positions within the BCP Group, including General Finance Manager and General Manager of the Treasury, Capital Markets and Large Corporate Clients Divisions, as well as Director of Big Bank Gdansk, Poland, and Banco Millennium BCP Investimento. Between September 2002 and July 2003, he also performed management functions within the BPN group. In 2003 he joined EDP as General Manager, a position he held until 2006, when he became a member of the Board of Directors of EDP. He is currently President of the Executive Committee of EDP Produção and the Chief Executive Officer of Hidrocantábrico. On the EDP Group level, he is responsible for generation and trading, regulation, power planning, and the day-to-day running of Hidrocantábrico.
He holds a degree in Economics from the Instituto Superior de Economia e Gestão de Lisboa, a postgraduate degree in European Economy from the Universidade Católica de Lisboa and the academic component of a master's degree in Economics from the Universidade Nova de Lisboa.
Born in 1932. From 1969 to 1974, he was a member of the Board of Caixa Geral de Depósitos and Director of the Cabinet of Studies and Planning of the Ministry of Finance. In 1972, he held the position of Deputy Chief of negotiations for the free market agreement of the EC. Between 1974 and 1978, he was Minister of Finance, additionally holding the position of External Markets Minister between 1974 to 1975. Between 1975 and 1980, he held the position of Governor of the Bank of Portugal. Since January 2004, he has been Chairman of the Board of Directors of Montepio Geral.
In 2003, he was awarded the Order of Grã Cruz by the President of Portugal for his 48 years of service as an economist predominantly for the Portuguese state. In 2004, he was awarded a degree of "Doutor Honoris Causa" by Instituto Superior de Economia e Gestão. He also has a degree in Finance from the Instituto Superior de Ciências Educativas de Felgueiras.
Born in 1962. Between 1988 and 1996, he held the position of Consultant to several national and international institutions, including the Bank of Portugal, the OECD and the EC. Between 1995 and 1998, he was General Secretary of APRITEL, and between 2000 and 2002 was a member of the Board of Directors of APRITEL. From 1997 to 1999, he was a Director of Soporcel, S.A., between 1998 and 1999, he was a Director of Papercel, S.A., and in 1999, was a director of MC Corretagem, S.A. Also in 1999, he was appointed Chairman of the Board of Directors of Bolsa de Valores de Lisboa and became a member of the Executive Committee of Associação de Bolsas Ibero-Americanas. Since 2000, Mr. Nogueira Leite has been a member of the Consultative Council of Associação Portuguesa para o Desenvolvimento das Comunicações. Between 2000 and 2002, he was a Consultant for Vodafone – Telecomunicações Pessoais, S.A., between 2001 and 2002, he was a Consultant of GE Capital, and in 2002 was a member of the Consultant Council of IGCP. Since 2002, he has held various positions within the José de Mello group and has held directorships with numerous other entities including Reditus, SGPS, S.A., Quimigal, S.A, Brisa, S.A., ADP, S.A., Comitur, SGPS, S.A., Comitur Imobiliária, S.A., Expocomitur – Promoções e Gestão Imobiliária, S.A., Herdade do Vale da Fonte – Sociedade Agrícola, Turística e Imobiliária, S.A., e SGPS, S.A., Efacec Capital, SGPS, S.A., and Cuf – Químicos Industriais, S.A. He held a further directorship with Sociedade de Explosivos Civis, SEC, S.A. from 2007 to March 2008. Between October 1999 and August 2000, he was Secretary of State for Treasury and Finance and Governor Substitute of the European Bank of Investments. He additionally held positions with the European Bank for Reconstruction and Development, the International Monetary Fund and was a member of the Financial and Economic Council of the European Union. He was Vice-Chairman of the Consultative Council of Banif-Banco de Investimento, S.A., and Chairman of the General and Supervision Council of OPEX, S.A.
He has an undergraduate degree in Economics from the Universidade Católica Portuguesa, a master of science degree in Economics, and a Ph.D. in Economics from the University of Illinois.
Born in 1953. In 1991, he joined Banco Espírito Santo de Investimento, S.A. and was the Director Responsible for Financial Services Management, Client Management, Structured Financing Management, Capital Markets Management, and for the Department for Origination and Information. In March 2005, he was appointed as Vice-Chairman of the Board of Directors of Banco Espírito Santo de Investimento, S.A. and formed part of the Executive Committee of the company.
He has an undergraduate degree in Economics from the Instituto de Economia da Faculdade Técnica de Lisboa.
Born in 1951. He began his professional career as an Assistant Lecturer at Faculdade de Economia do Porto. From 1991 he was invited to be a Lecturer at Universidade Católica do Porto and additionally held a part-time position as Technician for Comissão de Coordenação da Região Norte. He has since held the position of Director of several companies, including of Banco Espírito Santo e Comercial de Lisboa and Soserfin – Sociedade Internacional de Serviços Financeiros – Oporto group. He has been involved in the Finance and Management Coordination of Sonae Investimentos SGPS, was Executive Director of Sonae Participações Financeiras, SGPS, S.A. and was Vice-Chairman of Sonae Indústria, SGPS, S.A. He has additionally held directorships with Tafisa, S.A., Spread
SGPS, S.A. and Corticeira Amorim, SGPS. He presently serves on the Board of Directors of Caixa Geral de Depósitos, S.A. He has an undergraduate degree in Economics from the Faculdade de Economia do Porto and has obtained certificates from Universidade de Paris IX, Dauphine and the Midland Bank International banker's course in London.
Born in 1960. He has been a member of the Board of Directors and a member of the Executive Committee of each of Cajastur and Hidrocantábrico. He has been a member of the Board Directors, Executive Committee and Audit and Control Committee of AIRTEL. He has also been a member of the Board of Directors of LICO Corporación and ENCE, Vice-Chairman of the board of SEDES, S.A. and Executive Chairman of Sociedade de Garantias Recíprocas de Astúrias. Currently, he is Chairman of Cajastur, Hidrocantábrico and Naturgas Energia, a member of the Board of NEO and Confederación Española de Cajas de Ahorros, a member of the Junta Directiva of UNESA and a member of Registro Oficial de Auditores de Cuentas. He also represents Peña Rueda, S.L. (a subsidiary of Cajastur) on the Board of Directors of Enagas.
He has an undergraduate degree in Economics and Company Management and a Ph.D. in Economic Sciences, each from the University of Oviedo. He has been appointed university professor of Company Management and Accounts at the University of Oviedo.
Born in 1951. From 1997 to 1998, he coordinated the Committee for Evaluation of the EC Support Framework II and was a member of the Committee for the Elaboration of the ex-ante EC Support Framework III. From 1998 to 2000, he Chairman of the Unidade de Estudos sobre a Complexidade na Economia and from 1998 to 2002 was Chairman of the Scientific Council of Instituto Superior de Economia e Gestão of the Universidade Técnica de Lisboa. From 2001 to 2002, he coordinated the Committee for the Elaboration of the Strategic Programme of Economic and Social Development for the Peninsula of Setúbal. Since 2007, he has been Coordinator of the masters program in Economics, and since 2008, he has been a member of the Representatives Assembly of Instituto Superior de Economia e Gestão of the Universidade Técnica de Lisboa.
He has an undergraduate degree in Economics from Instituto Superior de Economia, a master degree in Economics from the University of Bristol and a Ph.D. in Economics from the University of Kent. He additionally has a doctorate degree in Economics from the Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa, and has consequently held the positions of Auxiliary Professor and Associate Professor with Universidade Técnica de Lisboa. Hes has been appointed as university professor (catedrático) of Universidade Técnica de Lisboa.
Born in 1960. From 1984 to 1985, he was an Assistant Lecturer at Universidade Católica Portuguesa. Between 1982 and 1990, he held the position of Technician and Director of Locapor (Leasing), CISF and Hispano Americano-Sociedade de Investimentos. Between 1990 and 2000, he joined the Management Team of the José de Mello group as Director of UIF, SGPS. Between 1991 and 2000, he was a Director of Banco Mello, and, from 1993 to 2000, additionally held the position of Chairman of the Executive Committee of Banco Mello. Between 1997 and 2000, he was Vice-Chairman of the Board of Directors of Banco Mello, and since 2000 has been a Director of Insurance Company Império and Chairman or Director of several banks and financial companies of the Banco Mello group. Between 2000 and 2008, he was a member of the Executive Board of Directors of Banco Comercial Português, S.A., and in this capacity was responsible for the activity of the group in investment banking in Europe. He is presently a member of the board of Mague – SPGS, S.A. He has an undergraduate degree in Company Administration and Management from Universidade Católica Portuguesa.
Born in 1946. Between 1986 and 1989, he was a member of the Management Council of Tecnologia das Comunicações, Lda. Between 1989 to 1994, he was Chairman of the Board of Directors of Telefones de Lisboa e Porto, S.A., and between 1993 to 1995 he was Chairman of Associação Portuguesa para o Desenvolvimento das Comunicações. From 1994 to 1995, he was Chairman of the Board of Directors of Companhia Portuguesa Rádio Marconi and additionally was Chairman of the Board of Directors of Companhia Santomense de Telecomunicações e da Guiné Telecom. From 1995 to 1997, he was Vice-Chairman of the Board of Directors and Chairman of the Executive Committee of Lisnave (Estaleiros Navais) S.A. Between 1997 and 2001, he was Chairman of the Board of Directors of Soponata and was a Director and Member of the Audit Committee of International Shipowners Reinsurance, Co S.A. Between 2001 and 2004, he was Vice-Chairman of José de Mello Imobiliária SGPS, S.A., and was Chairman of the Boards of Directors of IMOPÓLIS, S.A., José de Mello Residenciais & Serviços, S.A. and Engimais, S.A. Since 1998, he has been a Director of Portugal Telecom SGPS, S.A., Chairman of the Audit Committee since 2004, and Chairman of the Corporate Governance Committee since 2006. He has an undergraduate degree in Mechanical Engineering from Instituto Superior Técnico. He additionally holds a certificate in Strategic Management and Company Boards and is the holder of a grant of Junta de Energia Nuclear.
Born in 1960. Between 1982 to 1985 he was Senior Auditor of BDO – Binder Dijker Otte Co. Between 1987 to 1990, he was Director of Banco Manufactures Hanover (Portugal), S.A. and between 1990 to 1993 was a member of the Board of TOTTAFactor, S.A. (Grupo Banco Totta e Açores) and Valores Ibéricos, SGPS, S.A. In 1993, he held directorships with Nacional Factoring, da CISF – Imóveis and CISF Equipamentos. Between 1995 and 1997 he was a director of CISF – Banco de Investimento and a member of the Board of Directors of Nacional Factoring. In 1998, he was appointed to the board of several companies, including Leasing Atlântico, Comercial Leasing, Factoring Atlântico, Nacional Leasing and Nacional Factoring. From 1999 to 2000, he was a member of the Board of BCP Leasing, BCP Factoring and Leasefactor SGPS. From 2000 to 2003, he was appointed Chairman of the Board of Directors of Banque BCP (Luxemburg) and Chairman of the Executive Committee of Banque BCP (France). Between 2003 and 2006 he was a member of Management of Banque Prive BCP (Switzerland) and was General Director of private banking of BCP. Since 2006, he has been a member of the Board of Directors of Banco Millennium BCP de Investimento, and General Director of Banco Comercial Português. Mr. Lopes Raimundo is presently Vice-Chairman of the General Board of Millennium Angola.
He has an undergraduate degree in Company Management and Administration from Universidade Católica Portuguesa de Lisboa, and a Master of Business Administration degree from INSEAD.
Born in 1962. Between 1988 and 1991, he was a research fellow in the Division of Engineering and Applied Science and the Division of Biology at the California Institute of Technology and a post-doctorate researcher of Weizmann & Bantrell in the Engineering and Applied Science and Biology Department at California Institute of Technology. Between 1991 and 1993, he was a Research Collaborator for Science and International Affairs at the John F. Kennedy School of Government, Harvard University. Between 1991 and 1993, he was a Research Associate for the Northeast Regional Centre for Global Environmental Change and the Department of Physics, Harvard University. In 1993, he was appointed a permanent fellow at the African Academy of Sciences. Between 1993 and 1999, he was a member of the Research Faculty at the Centre for Energy and Environmental Studies at the School of Engineering and Applied Science at Princeton University. Between 1997 and 1999, he was Class of 1934 Preceptor at the Woodrow Wilson School of Public and International Affairs at Princeton University, and between 1998 to 1999 he was Chair of the Science, Technology and Environmental Policy Program (STEP) of the same institution. Between 1998 and 2001, he was an Associate Professor of the Energy and Resource Group and between 1999 and 2001 was an Associate Professor of Nuclear Engineering at the University of California, Berkeley. In 1999, he was a founding Director of the Renewable and Appropriate Energy Laboratory (RAEL) of the University of California, Berkeley. From 2000 to 2001, he joined the Core Management Team of the Commission of Power of California Public Interest Environmental Research – Environmental Area. Between 2004 and 2009, he was the Director of the University of California, Berkeley, and Industrial Technology Research Institute of Taiwan. In 2005, he was appointed Co-director of the Berkeley Institute of the Environment. In 2006, he was appointed a member of the Energy and Resources Group and in 2007 held the position of Coordinator of the Science and Impact Sector in the Energy Biosciences Institute. In addition, since 2001, he has been a Professor of Public Policy of the Goldman School of Public Policy, University of California, Berkeley. He is also an author of several studies and has received several awards in the Energy sector.
He has an undergraduate degree, a masters degree and a Ph.D. each in Physics.
Born in 1955. In 1981, he joined Soto de Ribera Power Plant, which was owned by a consortium comprising Electra de Viesgo, Iberdrola and Hidrocantábrico, as Legal Counsel. In 1995, he was appointed General Counsel of Soto de Ribera Power Plant, and also Chief of Administration and Human Resources of the consortium. In 1999, he was appointed Legal Counsel at Hidrocantábrico, and in 2003 was appointed General Counsel of Hidrocantábrico and also a member of its Management Committee. He presently serves as General Counsel of the Company, as Secretary of the Board, and is also Director and Secretary of the Boards of Directors of a number of the Company's subsidiaries in Spain.
He holds a masters degree in Law from the University of Oviedo.
| Name | Direct | Indirect | Total |
|---|---|---|---|
| António Luis Guerra Nunes Mexía | 3,880 | 320 | 4,200 |
| Ana Maria Machado Fernandes | 1,510 | 0 | 1,510 |
| João Manuel Manso Neto | 0 | 0 | 0 |
| Nuno Maria Pestana de Almeida Alves | 5,000 | 0 | 5,000 |
| António Fernando Melo Martins da Costa | 1,330 | 150 | 1,480 |
| Francisco José Queiroz de Barros de Lacerda | 310 | 310 | 620 |
| João Manuel de Mello Franco | 380 | 0 | 380 |
| Jorge Manuel Azevedo Henriques dos Santos | 200 | 0 | 200 |
| José Silva Lopes | 760 | 0 | 760 |
| José Fernando Maia de Araújo e Silva | 80 | 0 | 80 |
| Rafael Caldeira de Castel-Branco Valverde | 0 | 0 | 0 |
| António do Pranto Nogueira Leite | 0 | 0 | 0 |
| João José Belard da Fonseca Lopes Raimundo | 170 | 670 | 840 |
| Daniel M. Kammen | 0 | 0 | 0 |
| Manuel Menéndez Menéndez | 0 | 0 | 0 |
ANNUAL REPORT 2008 CORPORATE GOVERNANCE REPORT
EXTRACT OF MINUTES OF GENERAL MEETING
www.edprenovaveis.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.