Statuatory and External Auditors
According to the Spanish law, the External Auditor (“Auditor de Cuentas”) is nominated by the General Shareholders’ Meeting and corresponds to the statutory auditor body (“Revisor Oficial de Contas”) described on the Portuguese Law. Consequently, the information regarding points 39 to 41 is available on chapter V of the report, points 42 to 47.
42. EXTERNAL AUDITOR IDENTIFICATION
The External Auditor is, since 2007, KPMG Auditores S.L., a Spanish Company, whose partner in charge of EDPR accounts auditing is, currently and since January 2014, Estibaliz Bilbao. KPMG Auditores S.L. is registered at the Spanish Official Register of Auditors under number S0702 and with Tax Identification Number B- 78510153.
43. NUMBER OF YEARS OF THE EXTERNAL AUDITOR
KPMG Auditores S.L. is in charge of EDPR’s accounts auditing having carried these duties during eight consecutive years from the date EDPR became Public Interest Entity.
44. ROTATION POLICY
According to CMVM’s Recommendation IV.3 of its 2013 Corporate Governance Code, the companies shall rotate the auditor after two or three terms whether they are of four or three years, respectively, being the maximum nine years. On the other hand, according to the personal Law of EDPR -the Spanish Law-, recently amended in October 2015, the maximum term for an auditing firm is established in a 10 year term, from the date the company is declared a “Public Interest Entity”.
In the case of EDPR, this date when the IPO was launched is 2008. On of December 31st, 2015, KPMG Auditores S.L. has ended its eighth (8th) consecutive year as EDPR’s External Auditor from the date that it became Public Interest Entity.
The Company is compliant with Recommendation IV.3 of the Portuguese Corporate Governance Code and also with its personal Law.
45. EXTERNAL AUDITOR EVALUATION
The Audit and Control Committee is responsible for the evaluation of the External Auditor according to the competences granted by its Regulations. The evaluation of the Audit and Control Committee is made once a year. The Audit and Control Committee acts as the company speaker for the relevant matters with the External Auditor and establishes a permanent contact throughout the year to assure the conditions, including the independence, adequate to the services provided by them related to the auditing process, and receiving and maintaining information on any other questions regarding accounting subjects. In 2015, according to the Audit and Control Committee’s competences and in line with Recommendations II.2.2, it was the first and direct recipient and the corporate body in charge of the permanent contact with the external auditor 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 External Auditor within the scope of its duties, verified the implementation of the remuneration policies and systems of the corporate bodies as well as the efficiency and effectiveness of the internal control mechanisms and report any shortcomings to the supervisory body of the Company.
46. NON-AUDIT SERVICES CARRIED OUT BY THE EXTERNAL AUDITOR
According to the rules described on topic 29 of this Report, in EDPR there is a policy of pre-approval by the Audit and Control Committee for the selection non-audit services according to Article 8.2, b) of the Audit and Control Committee Regulations.
Below are the details of non-audit services provided during 2015 by the External Auditor for EDPR’s business units:
- KPMG’s assistance in the process of IRS tax examination and Tax Equity investments.
- Tax services to prepare technical memos on PTC qualification for different wind farms.
- KPMG’s assistance in divestment and acquisition structures and financial restructurings.
KPMG was engaged to provide the above mentioned services due to it’s in depth knowledge of the Group’s activities and tax related matters. These engagements did not risk the independence of the External Auditor and were pre-approved by the Audit and Control Committee prior to rendering the services.
47. EXTERNAL AUDITOR REMUNERATION IN 2015