2008 was the first year to see the publication of an integrated report of the company's performance, in place of the previous system of separate reports for different areas. The 2008 EDP Annual Report thus comprises an Institutional and Sustainability Report and a Financial Report.

 The Institutional and Sustainability Report is structured as follows:

> Company Presentation, which includes key indicators, important events in the year and the company's organisation; 

> Framework of Activity, which identifies the major external challenges currently facing the company; 

> 2009-2012 Strategic Plan, which focuses on creating opportunities for future growth, as well as stressing the importance of adhering to strategic aims and major commitments; 

> Summary of activity, which focuses on operational performance, organised by the Group's main business areas as recognised in the market; 

> "Triple bottom line" approach to sustainability, essentially organised in response to the expectations of the company's major stakeholders; 

> Corporate Governance, which is organised according to Securities Market Commission (CMVM) Regulation no. 1/2007.

The basic criteria used to select the information reported by EDP and assess its significance arise from:

> its impact on the financial results;

> its contribution to strategy implementation and business sustainability;

> the environmental and social relevance of the business; and

> the degree to which it responds to the expectations of the different parties interested in the Group's performance.


Using a range of support material, the report is thus concerned with information:

> deemed materially relevant in terms of the Internal Control of Financial Reporting (ICOFR) system;

> relating to the management of significant environmental issues, as identified through the environmental management systems implemented across the Group;

> resulting from publicly assumed commitments to investors, customers or communities in which EDP operates;

> that may be of particular interest to other stakeholders, including: public sector authorities, the Securities Market Commission (CMVM) and other regulators; ethical and socially responsible investors; and organisations representing the interests of various sectors affected by the Group's activity. All of these stakeholders present the company with regular requests for information of an economic, environmental and social nature.
 

Commitments assumed by the Group voluntarily are also considered for the purposes of external reporting, such as those relating to its participation in the Global Compact and to issues of integrity and respect for human rights.

This report aims to provide a brief description of the company's business performance and good sustainability practices.

This publication also seeks to comply with CMVM Regulation no. 1/2007, the Company Code, the Corporate Governance Code and the Regulation on Duties of Information (no. 5/2008).
 

The report was prepared with the Global Reporting Initiative G3 guidelines in mind. The pilot version of the supplement for the electricity sector was helpful in systematically identifying appropriate content for the sector, as well as determining EDP's current level of compliance. The report did not seek to comply with this version. EDP aims to continue improving its report until such a time as it achieves compliance.

A simplified table describing this process is presented in the paper version, with a more detailed breakdown accessible online.

In 2004, EDP joined the Global Compact initiative, promoted by former UN Secretary-General Koffi Annan. Since this time, our progress in applying the 10 Global Compact principles has been described in this report.

The EDP organisation chart (page 28-29 of the Institutional and Sustainability Report) displays the range of companies covered by the annual report.

The same consolidation criteria were used as in 2007. The following accounting methods were adopted for the consolidation of accounts:

Full Consolidation

Reporting the performance of the companies owned 100% or controlled by EDP.


Proportional Control

Consolidating only the percentage owned in the following companies:

> 50%: EDP Produção Bioeléctrica; COGENERACION Y MATENIMIENTO AIE; PROENERCAM S.L., BIOASTUR AIE ; COGERACIÓN BERGARA AIE; Flat Rock Windpower LLC; Compañía Eólica Aragonesa, S.A.;

> 40%: Desarrollos Energeticos Canarios S.A.; Evolución 2000, S.L.; Horta Medioambiente S.A.; Ibersol E. Solar Ibérica, SA; Murciasol-1 Solar Térmica, S.L; TEBAR EOLICA, S.A.

Information regarding the performance of Horizon has already been included as part of the process to check the company's sustainability indicators. Another significant change was the sale of Enersul (Brazil) during 2008.

The checks were conducted by an independent organisation, KPMG Advisory, Consultores de Gestão, Lda, which was selected on the basis of an invitation to tender, in Portugal, submitted to four companies of recognised experience in the field.