EDENOR Form 6-K Summary: Audit Committee Report
Business Context and Reporting Period
This filing is a Form 6-K submitted by EDENOR (Empresa Distribuidora y Comercializadora Norte S.A.), an Argentine electric utility company, on March 19, 2018. The document contains the Audit Committee's Report for the fiscal year ended December 31, 2017. The report details the Committee's oversight of external and internal audits, internal controls, risk management, and compliance with Argentine securities regulations and the Sarbanes-Oxley Act.
Key Financial Metrics
The filing does not provide consolidated revenue, profit, cash flow, or debt figures for the fiscal year. The only specific financial data disclosed relates to professional fees paid during the 2017 fiscal year:
- External Audit Fees: AR$9,510,905 (auditing and trust-building services).
- Other Professional Services: AR$4,245,060 total, broken down as follows:
- Internal Audit and Internal Control: AR$1,782,274
- Financial and Administrative Consulting: AR$1,021,098
- Tax Consulting: AR$920,688
- Information System Consulting: AR$440,000
- Accounting Consulting: AR$81,000
Material Changes and Related Party Transactions
The Audit Committee reviewed and approved one significant related party transaction during the fiscal year:
- Transaction with Pampa Energía S.A.: On May 17, 2017, the Committee issued a pronouncement in favor of an agreement for civil construction and electromechanical installation at Edenor's Transformer Substation No. 158 "Pilar." This project interfaces with Pampa Energía's future thermoelectric generating plant. The Committee determined the transaction was conducted at arm's length.
- Other Related Parties: No other agreements with related parties exceeding 1% of Shareholders' Equity were approved during the fiscal year.
Management Commentary, Risks, and Contingencies
Audit Oversight: The Committee concluded that the external audit performed by Price Waterhouse & Co. S.R.L. was satisfactory regarding independence, skills, and performance. No significant issues were identified regarding the external auditors' engagement.
Internal Controls and Risk: The Committee found the Company's internal control systems and administrative accounting systems to be reliable for the protection of shareholders' equity and compliance with regulations. The Company is subject to the Sarbanes-Oxley Act, and the Committee reviewed the tasks performed to certify internal control, finding no material comments necessary.
Conflicts of Interest: The Committee was not aware of any relevant conflicts of interest involving members of the governing body.
Complaints Channel: The channel for submitting complaints regarding accounting and auditing matters was deemed effective, with no issues noted.
Investor Verification Checklist
- Verify the full 2017 Annual Report (Form 20-F) for detailed revenue, earnings, and debt metrics not included in this Audit Committee report.
- Confirm the status and financial impact of the related party agreement with Pampa Energía S.A. regarding the "Pilar" substation project.
- Review the external auditor's full report (Price Waterhouse & Co. S.R.L.) for any qualifications or emphasis of matter regarding the 2017 financial statements.
- Check subsequent filings for the 2018 work plan execution and any updates on internal control certifications under Sarbanes-Oxley.