2020 ANNUAL REPORT

Romande Energie Group core energy Turnkey energy businesses services Generation (electricity and thermal energy) Distribution • 20 residential PV installations installed in 2020 Marketing • 35 heat pumps installed in 2020 4 Energy services • 700 local lighting projects materialising in 2020 Generation from 750 100% renewable sources km of fibre-optic • 580m kWh in 2020 3 cable production sites open to visitors

Achievements in 2020 13 apprenticeship 1,022 • 3 district heating plants employees streams • 9 self-consumption solar farms • 5 solar farms with microgrid

Close to transmission stations 300 more than 3,200 substations municipalities and 10,500 km of power lines, served 45 80% of which are underground UNITS ENERGY POWERING THE FUTURE

CURRENCIES This English version is based on Energy-related issues lie at the forefront of the climate CHF Swiss francs the French original. In case of doubt emergency, the fast-track digitalisation of our society, and our EUR euros the original French shall prevail. m million changing lifestyles – how we work, live and move around. As bn billion an energy company, Romande Energie has a crucial part to POWER play in rising to the challenges for our economy, our kW kilowatt

environment and our society. SHAREHOLDERS OUR TO MW megawatt 1,000 kW MWp megawatt-peak 1,000 kWp We are helping to lead the energy transition in

ENERGY and are constantly innovating and investing to produce kWh kilowatt hour and provide renewable energy solutions for our customers. MWh megawatt hour 1,000 kWh Our business model – with its three CSR (corporate social GWh gigawatt hour 1 million kWh TWh terawatt hour 1 billion kWh responsibility) pillars – proved to be highly resilient in 2020

VOLTAGE despite the pandemic and the challenging economic conditions, kV kilovolts 1,000 volts and our financial performance was extremely encouraging,

CARBON FOOTPRINT built on employees’ perseverance and response to the

tCO2eq tonnes of carbon-dioxide equivalents situation, and prudent management of our finances. This 2020 Annual Report represents a major milestone in the CSR strategy we introduced in 2019, as we have now devoted a whole chapter to it. We are infinitely grateful to our colleagues who have been involved in preparing this report.

CONTENTS

1. TO OUR SHAREHOLDERS 6 Letter to shareholders from Guy Mustaki, Chairman of the Board of Directors, and Christian Petit, Chief Executive Officer Letter to shareholders from Nicolas Conne, Chief Financial Officer

2. CORPORATE SOCIAL RESPONSIBILITY (CSR) 13 Social pillar Environmental pillar Economic pillar Our digital responsibility in focus Our certifications

3. CORPORATE GOVERNANCE 35

4. REMUNERATION REPORT 61

5. FINANCIAL STATEMENTS 69 Financial overview 70 Consolidated financial statements 75 Romande Energie Holding SA financial statements 107

CALENDAR 117 CONTACTS 117 CREDITS 117

2 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 3 TO OUR SHAREHOLDERS 1 COMMITMENT AND STRONG PERFORMANCE FLOWING FROM OUR PERSEVERANCE

Our priorities during 2020, a year shaped by the Covid-19 pandemic, were to maintain an uninterrupted energy supply TO OUR SHAREHOLDERS OUR TO and the integrity and development of our Group. Our overriding goal was of course to keep all Romande Energie’s employees safe and in good health.

Although the pandemic left a clear imprint on our financial performance during the first half of 2020, our organisation’s resilience was plain for all to see. Compared with 2019, the Group achieved 9% growth in revenues to CHF 569 million and a 18% increase in EBIT to CHF 77 million. Amid a previously unimaginable crisis, we made sure our electricity supply and heating services remained onstream at all times for our 300,000 customers, we shielded our employees, and we took a lead in advancing the energy transition through innovation. The far-reaching reorganisation of our Group into several strategic business units focused on renewable energies, and the digitalisation policy introduced in 2019 gave our performance a real boost in 2020. We pressed ahead with our expansion, building up our geographical positions in both Switzerland and .

Tremendous response from all our teams The entire Romande Energie Group reacted swiftly as soon as the first wave of the pandemic struck. In February 2020, we deployed our crisis unit and activated our pandemic plan, setting three main priorities – keeping employees safe, generating energy and maintaining supplies to our customers. After a near-25% decline in the electricity we supplied during the first wave, we were subsequently able to avoid renewed working-time reductions for our staff thanks to the gradual pick-up in activity levels from the second quarter and then a rebound throughout the second half of the year. Guy Mustaki, Chairman of the Board of Directors, Christian Petit, Chief Executive Officer The work environment upgrade programme we had embarked on in 2019 and the renovation of the Morges and Préverenges offices had already accustomed our staff to the region. We bolstered this position through the acquisition of -based Toutelec, concepts of hot-desking and remote working. During the March lockdown, practically all our a business solidly established in the region, whose addition has helped to raise awareness operations continued, as employees worked from home, including our customer call centre of the sheer breadth of our services. We also upped our presence in the canton of by agents. Various digital support tools helped our staff stay in direct contact with their teams buying the electricity grid serving the municipalities of Bussigny and Romanel-sur-Lausanne, and line managers throughout the crisis period. Lastly, we expanded our operations in France via our local subsidiary, finalising the complete The three pillars of CSR (social, environmental and economic) underpinning our development buyout of Icaunaise (six hydroelectric power plans supplying 4,800 homes), initiated in gained even more traction over the year and became a factor considered in all internal and 2016. The deal we announced in late 2020 with development company Calycé has firmly external activities, reflecting our desire to play a greater role in tackling climate challenges established us as a leading player at the forefront of the energy transition in France. All in all, and decarbonising Western Switzerland’s economy. This year, the Group published its second 16 wind farms with 646 MW in total capacity are covered by the deal, raising the prospect GGE (greenhouse gas emission) footprint, transparently disclosing the impact of its activities of attractive returns for our shareholders in the years ahead. on the environment. We have dedicated this Annual Report to these three CSR priority areas. Innovation, staying power and digitalisation Further acquisitions Under our strategic plan, we pushed ahead during 2020 with our reorganisation and the Despite the unparalleled circumstances, Romande Energie has continued to pursue a policy overhaul of our units to make renewable energies, innovation and digitalisation the central of expansion and geographical development in Switzerland and France. We established focus of our business. Romande Energie Services SA underwent a radical shake-up. a new office in Martigny covering the network and energy service activities in the Lower

6 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 7 TO OUR SHAREHOLDERS OUR TO

Oliviero Iubatti, its Chief Executive Officer, expressed a desire to take the service company’s While 2020 provided a stern test for us, it also brought into relief our ability to rise to the development in a more entrepreneurial direction, and he was given the chance to buy a 20% various challenges posed by such unparalleled times. Through a year of reorganisations stake and join its Board of Directors. This change in ownership structure has made the unit and modernisation, we demonstrated our resilience and our agility and saw a number of more independent and opens the way towards further gains in market share. Its expansion development projects reach fruition, despite the unprecedented situation. Many challenges in the cantons of Valais, Geneva and, most recently, Neuchâtel reflect this new growth lie ahead for us in 2021, as the pandemic is again bound to have an impact. Even so, we are momentum. As part of this reorganisation, all its production assets (district heating plants) looking to the future with composure and confidence, drawing strength from the support we were transferred to the Energy Solutions business unit, with Romande Energie Services SA received from our employees, our customers, and our shareholders. We are truly grateful retaining responsibility for development, construction and operations. We also reorganised for the trust they continue to place in us. the Energy Solutions business unit into two separate divisions during 2020. The Energy division now houses the production and supply activities for electricity and heating services, while the Markets division is built around our three new customer segments – households, businesses, and municipalities and property professionals. Christian Frère, who leaves us in 2021, will be replaced by two senior managers. Guillaume Fuchs, who already works for us, will lead the Energy division, while Aurore Amaudruz will head up the Markets division. The handovers take place on 1 March 2021. Lastly, we set up the Digital & Innovation support unit in 2020. It now encompasses our various IT and digital units (Lab, Data Factory, Digital Academy, Information Systems) and the Marketing and Communication departments, which merged with effect from 1 July 2020. Guy Mustaki Christian Petit This new unit will help to speed up the digital transformation of all our various units. Chairman of the Board of Directors Chief Executive Officer

“INNOVATION REMAINS THE CORNERSTONE OF OUR STRATEGY FOR GENERATING ENERGY AND DELIVERING SERVICES.” A WORD OF THANKS Three superbly executed pilot projects show that innovation continues to play a crucial The various strategies, decisions and projects of Romande Energie Group owe role in the way we generate renewable energy and how we foster new energy-consumption their success to the members of the Board of Directors and Executive Board, models. The project to build a floating solar farm on the Lac des Toules, which was awarded as well as to all of our employees. I would like to express my heartfelt thanks a Watt d’Or in early 2021 by the SFOE (Swiss Federal Office of Energy), has lived to them for their expertise, professional conduct and dedication – qualities which up to its promise. Not only is it the world’s first high-altitude floating solar farm; it has also pave the way for Romande Energie’s growth and ensure the satisfaction of our been outperforming its valley-floor counterparts. The Jardin Solaire concept is now giving customers. I am also grateful to the Vaud cantonal government, the tenants the chance to play their part in the shift to cleaner energies. The solution enables all municipalities we serve and all of our shareholders for their trust and support. our customers to acquire photovoltaic panels in the roof array of a building that they do not own and then to generate renewable energy locally. Lastly, the Click & Charge solution is a Guy Mustaki, Chairman of the Board of Directors ground-breaking concept in Western Switzerland consisting in pre-fitting residential car parks so they are immediately ready for use by tenants, owners, and future electric vehicle buyers.

8 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 9 VALUE CREATION DRIVEN BY PERSEVERANCE AND OUR CSR MODEL

Nicolas Conne, Chief Financial Officer

It’s now crystal-clear to finance departments that the direct correlation between TO OUR SHAREHOLDERS OUR TO financial performance and corporate social responsibility (CSR) should be a key element of their strategy for long-term value creation.

After moving in this direction for several years, the Romande Energie Energy Services at breakeven 1/3 growth-2/3 maintenance capex split currently reversing. Major Group has shifted into a higher gear over the past 18 months, with Romande Energie Services and its affiliated companies showed investments in renewable energies will come to fruition over the next further accelerations planned in the future. Our business model impressive resilience and perseverance in the services sector. few years. They will include ambitious plans to build wind farms in – underpinned by economic, social and environmental pillars – Facing the full brunt of the pandemic, they reacted swiftly by taking France, the large-scale deployment of photovoltaic installations and generates profitability in the short term and value creation over the the appropriate organisational measures to mitigate the operational district-heating networks in Switzerland, and the roll-out of smart long term, through sustainable and responsible investments combined and financial impact, without undermining customer relationships, meters across the areas Romande Energie serves to replace the with tight management of our cost base. so that they did not prejudice the chances of a rapid recovery. previous generation of analogue meters. Romande Energie Group has a solid base of regulated energy This approach proved highly effective. After sinking deep into activities (distribution network and sale of electricity to customers negative territory in the second quarter, the business unit’s EBIT We remain fully confident in our financing model consuming less than 100 kWh p.a.). In 2020, we showed that performance steadily improved despite the additional pandemic- Working together with our investors and lenders – we plan to develop perseverance holds the key to success, with the impact of the Covid- related restrictions towards the end of the year and uncertainties our infrastructure and design new sustainable solutions for our 19 pandemic compounded by margin pressure after the return on about how the situation would evolve. All in all, Energy Services customers, harnessing the benefit of our ability to innovate and each regulated customer was cut from CHF 95 to CHF 75 in January practically broke even over the year, having reached that milestone laying firm and enduring foundations for the business going forward. 2020. Fuelled by an impressive year-end in services and one-off land in its development for the first time in the previous year. Romande Energie’s clearly stated goal is to reward its shareholders sales, Romande Energie Group recorded EBIT of CHF 76 million in Over the longer term, we are targeting an EBIT margin of 5% of appropriately while pursuing ambitious CSR goals. Consequently, 2020, up 18% on last year. revenues, which is perfectly reasonable in view of the segment’s we are leaving our dividend unchanged at CHF 36 per share this recent development. Nicolas Conne, Chief Financial Officer year, a level of shareholder return we are looking to maintain over Renewable energies: the Group’s future powerhouse In parallel, Energy Services has continued to expand through the long term. Despite tough economic conditions in 2020, we pushed ahead the acquisitions of Frigo Service SA () and Toutelec SA Profitability boosted in 2020 through tight cost management Romande Energie has always sought to build trust with its investors with high-potential investments in renewable energies, perfectly in (Valais, to be consolidated from 1 January 2021) in 2020, then of During the strong expansion in our business activities, we have by acting transparently. This emphasis on a dialogue remains a priority keeping with the Federal Council’s Energy Strategy 2050. This will JM Lambelet SA (Neuchâtel) in January 2021. This drive reflects our focused on achieving tight control over our cost base, especially for us today as we aim to establish a clear position for ourselves in the contribute to our future earnings. goal of rolling out a full range of service activities across Western at our support units, as that is absolutely crucial in times of crisis. world of sustainable finance. We believe in the importance of clear, Our major expansion over recent years into the renewable Switzerland. Integrating teams and establishing strong local roots By finalising this savings programme, which will gradually produce effective communication and intend to communicate more with the energies sector in France powered a 3% increase in our 2020 to build close and attentive relationships with customers are top a positive impact out to 2023, keeping growth in our workforce investment community, building on the start we made in 2020, with EBIT in the solar and hydropower segments. In addition, we expect priorities for us. carefully under control and taking appropriate measures, we have the investor presentations and meetings in April and September, plus to deliver earnings growth in the wind sector from 2021 onwards increased our resilience and laid foundations for the future as a lean efforts to enhance our transparency policy. under the large-scale partnership we established in 2020 with organisation renowned for its expertise and collaborative ethos. We are seeking to raise the Group’s profile and boost the liquidity Calyce, covering wind farms with 646 MW in total potential capacity. of its shares by focusing on our ESG (environment, social and Likewise, the Group’s business grew through the acquisition and Perseverance to face the challenges of the future governance) credentials, as we indicated for the first time last construction of district heating networks in Switzerland and closer “OUR MAJOR EXPANSION OVER Our rigorous business management and the targeted allocation of September. The environmental and social information in chapter 2 of partnerships with local authorities. Examples of this include the our human and capital resources generated very healthy cash flow of this report now forms an integral part of how we assess our Group’s purchase of the Bussigny and Romanel-sur-Lausanne distribution RECENT YEARS INTO THE RENEWABLE CHF 138 million in 2020, practically the same level as in the previous performance, alongside the financial results we present in chapter 5. grids and the the recent launch of the Commune Rénove programme ENERGIES SECTOR IN FRANCE year, with consistent year-on-year growth since 2017. That means we We will present our new strategy to investors in September, to speed up the vital renovation of the housing stock. These various have kept pace with the investments the Group originally planned long together with our interim results. We plan to update and announce developments in Western Switzerland and France illustrate the POWERED A 3% INCREASE IN OUR ago, but which have taken time to complete. the Group’s targets, as well as its economic, environmental and effects of our more rapid investments over the past few years. 2020 EBIT IN THE SOLAR AND In parallel, the Group was able to repay the CHF 100 million social indicators, with a view to forging an even stronger dialogue All in all, we invested no less than CHF 210 million in 2020, up loan it arranged in 2010. Its future borrowing ability thus remains with our investors, who will then be able to make better informed 71% on the previous year. HYDROPOWER SEGMENTS.” intact for both maintenance and growth capex, with the traditional decisions over the long term.

10 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 11 CORPORATE SOCIAL RESPONSIBILITY (CSR) 2 THE THREE CSR PILLARS OF ROMANDE ENERGIE’S BUSINESS

INTRODUCTION In 2019, Romande Energie anchored CSR firmly at the heart of its organisation. Its approach is underpinned by the social, environmental and economic pillars of sustainable development, each overseen by a separate senior manager.

For several years, Romande Energie Group has been investing in a Corporate Social Responsibility (CSR) programme that is fully aligned with the Federal Council’s CSR 2020-2023 action plan to promote responsible business conduct. Romande Energie has stepped up its CSR efforts in recent years under the leadership of committed Executive Board members. It now specifically devotes resources to achieving its aspirations of becoming one of Switzerland’s trailblazers SOCIAL PILLAR in this area and one of its soundest and most responsible businesses. In keeping with its core values, Romande Energie’s responsible and sustainable managerial vision aims to make the Responsibility for the social pillar

Group into a “difference-maker leading the vital decarbonisation of our region”. sits primarily with the Human Resources SOCIALCORPORATE RESPONSIBILITY support unit. It has put a cultural and people-centric transformation at the heart of its: “Combining Our Energy!” SWISS AND INTERNATIONAL POLICY OVERVIEW corporate plan.

As a responsible Swiss energy producer, Romande Energie strives to align all its activities and the actions it takes with the federal framework. The Company carefully monitors measures under discussion, such as the amended Energy

Supply Act (ESA), containing provisions on security of supply, the partial revisions of the CO2 Act and the 2030 Sustainable Development Strategy, the primary goal of which is to identify ways of delivering on the United Nations’ 17 Sustainable Development Goals. ECONOMIC PILLAR ENVIRONMENTAL PILLAR The Digital & Innovation support unit The 193 UN Member States adopts the 2030 Agenda for sustainable development. The environmental pillar, overseen directly oversees the economic pillar. In an industry 2015 This roadmap is built around 17 Sustainable Development Goals (SDGs) broken down into by the Chief Executive Officer, aims to find at long last waking up to the importance of 169 targets that provide a practical and effective response to the major economic, ways in which the Group can tread more customer experience, the economic pillar social and environmental challenges facing the world out to 2030. lightly on its natural environment by taking supports a culture of innovation extending to action at three levels – our employees, stakeholders and resolutely focused on its Switzerland ratifies the Paris Agreement on the Climate, which aims to curb global 2017 the Group, and the products and services customers, using digital technologies, an warming to 2°C, or preferably 1.5°C relative to the pre-industrial era. we provide to our customers. agile approach, design thinking and collective intelligence.

2017 The 2050 Energy Strategy, passed by a majority of 58% of Swiss voters, aims to bring about a gradual shift to renewables in the Swiss power industry.

2018 Switzerland publishes its preliminary report on delivery of the 2030 Agenda. ALIGNMENT WITH THE UN'S SUSTAINABLE DEVELOPMENT GOALS

The 2020-2023 CSR plan is adopted by the Federal Council and confirms 2020 its commitment to ensuring businesses act in accordance with CSR principles Romande Energie, with its business model underpinned by the three pillars of CSR, has demonstrated its resolve (continuation of the 2017-2019 plan). to play a leading role in Western Switzerland’s energy transition. To bed in its approach and align itself enduringly with the United Nations’ 2030 Agenda, Romande Energie has embarked on the process of signing up to the Sustainable Development Goals, by adopting the framework of 17 SDGs, five of which lie are central to our strategy. The SFOE publishes its 2050+ energy outlook targeting 2020 The Group is confident in its ability to make progress through innovation and constructive dialogue and is ready for zero net emissions by 2050. the challenge. It is grateful to its employees, customers, suppliers and investors for supporting this endeavour.

In January, the Swiss government adopted Switzerland’s Long-Term Climate 2021 Strategy laying down the guidelines for climate policy out to 2050 and setting strategic goals for individual sectors.

2021 Partial overhaul of the CO2 Act.

https://www.un.org/sustainabledevelopment

14 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 15 STAKEHOLDER-CENTRIC APPROACH

Stakeholders are involved in the internal processes and procedures to help us spot the latest trends, promote discussions and find 1. SOCIAL PILLAR improvements in every area. Our stakeholders are entered into the ARIS (Architecture of Integrated Information System) system, a modelling tool used by leading groups. It helps us design and analyse our activities and our processes to achieve higher reliability standards and more transparent communication. What’s more, stakeholders’ interests have been mapped out formally in ARIS so that we better meet their needs and expectations. The social pillar is highly developed at Romande Energie, a company that places people right at the heart of its “Combining our Energy” corporate project. It is overseen by Human Resources. Internally, employee initiatives illustrate management’s determination to harness collective intelligence and cultivate greater engagement Internal and external stakeholder mapping and responsible commitment among employees to achieving the Group’s strategic priorities. The primary goal is employee well-being (safety and security, flexible working hours, office upgrade, manager training), skills development (CSR training programme, management coaching, etc.) and psychosocial risk prevention (avoiding burn-out).

Externally, Romande Energie has a positive influence on society in Western Switzerland and beyond by virtue of its activities as an SOCIALCORPORATE RESPONSIBILITY Public authorities energy company. The Group endeavours to satisfy its customers and other external partners, to pick responsible suppliers acting from a Institutions long-term perspective, to create jobs, train apprentices and interns, and to raise public awareness about renewable energies. Regional administration Certification bodies General public ESG rating Media industry ACTING RESPONSIBLY WITH EMPLOYEES agencies

Romande Energie came fourth in the top 15 ranking of Western Switzerland’s employers according to Jobup.ch, which based its analysis on surveys by the Reputation Institute, Bilan and Glassdoor. In the Handelszeitung 2021 survey, it was picked as Western Switzerland’s top employer in the energy sector. These studies applied a wide range of criteria, such as training, promotion, fair and equal Employees selection and treatment, support for personal development and sustainability. These rankings reflect only some of the Group’s actions as Employee Training a responsible employer benefiting its employees and society at large. representatives Suppliers organisations Subcontractors Academia Improved working conditions Bringing working conditions into line with the latest standards • Romande Energie provides a healthy work environment and excellent working conditions. After a complete overhaul of our • Romande Energie has joined the Work Smart initiative, which EXTERNAL Morges and Préverenges offices to accommodate staff in the aims to modernise working conditions and relationships between Board of Management INTERNAL Directors Committee latest, more collaborative facilities and working environ- colleagues, reduce CO2 emissions by encouraging homeworking ment, we have launched similar programmes at our and up to three days per week, and to boost the motivation and lift Noville sites and are planning to establish a new unit in the northern the productivity of its staff in a manner that accommodates each part of the canton of Vaud to replace the Moudon and Yverdon employee’s natural working pattern and preferred place to work. facilities. • The Group also provides unparalleled flexibility, offering employees Banks Associations In addition, a in Morges run by a collective catering the option of adjusting their working hours and switching to part- Insurers • work canteen NGOs Shareholders company with a healthy eating certification serves employees time work so they are able to work stress-free. In addition, Investors a varied and balanced selection of healthy food options, as well Romande Energie’s employees can take between five and seven as local produce. To make life easier for employees at other sites, weeks’ paid and additional unpaid leave a year. the company offers a CHF 7 contribution that can be used at a number of approved restaurants. Rapid adjustment to the pandemic • To provide a better work-life balance, the company built a public and support for employees nursery in Morges where employees’ children enjoy priority • Well before the pandemic struck, the Group had aligned working Local access. It had already offered two-weeks’ paternity leave, even conditions with current standards, introducing homeworking, job authorities Financial markets Municipalities and Investors before this became a requirement under the Swiss legislation. flexibility and part-time working. Romande Energie was quick to adapt to the conditions necessitated by the pandemic, with Electricity homeworking introduced across the board and a corporate social- users media platform launched. The HR department also organised Customers seminars and webinars on topics such as confidence-building, participatory management and well-being, to support executives and managers during the crisis.

16 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 17 Encouraging training, personal development Diversity and equal opportunities Sharp focus on safety issues Psychosocial risk prevention and shared governance • As a result of its structured recruitment, hiring and appointment • The Group introduced an OHSAS 18001, then in 2021 an ISO • Romande Energie held several stress management and burn- • Romande Energie spends an average over one million Swiss process, Romande Energie does not discriminate in the pay it 45001-compliant Occupational Health and Safety Management out prevention workshops and also arranged back-massage francs on employee training every year. The Group has its own offers to new employees. Salaries are checked using a biannual System (OHSMS) to prevent accidents of all kinds and also sessions for employees. Given the increased risks as a result training department, organising courses for employees tailored regression curve. The Group holds L&M-AbA-R diversity and equal occupational illness. A safety specialist and two safety officers of the pandemic, we introduced the Parenthèse programme to their needs. It includes general, qualification-based, business- opportunities accreditation (pay equality was confirmed by Landolt oversee all activities related to occupational health & safety. In for managers and employees to address the substantial erosion specific and bespoke courses. The business also has around 20 & Maechler, an external firm, by means of multiple regression accordance with the current OHSAS 18001 standard, a follow-up in social ties caused by the enforced period of homeworking. occasional trainers in its ranks who mainly deliver IT, technical and analysis based on the variables of age, salary, and an evaluation audit and over 140 safety audits covering all sectors of activity To prevent psychosocial risks, the Group introduced organisa- health & safety sessions, as well as part of the apprentice training of all the functions on the Abakaba analysis system). were conducted at the Romande Energie Group’s worksites in tional methods supportive of our employees’ physical and men- programme. Organisations with expertise in the relevant areas 2020, plus another hundred or so audits of compliance with tal health, such as working in teams, using employees’ skills, handle the rest. In addition, every new employee is given access Demographics, promotion, low absenteeism pandemic-related protection rules. All activities conducted by leaving them with sufficient room for manoeuvre, and involving to their own online training system to smooth their onboarding and employee turnover Romande Energie are catalogued in the new safety handbook, them in decisions that affect them directly. This collective process. • The Romande Energie Group currently has 1,022 employees with which summarises the risks and relevant preventative measures approach to prevention was backed up by an employee survey • Romande Energie has invested heavily in apprenticeship training an average length of service of nine years. It hired 204 new for each of them. The Gameo app was introduced to protect lone identifying risk factors to facilitate effective and enduring risk CORPORATE SOCIALCORPORATE RESPONSIBILITY and currently runs 13 training courses, offering around 50 appren- employees, and 164 existing employees moved to a new job workers. Cutting the number of occupational accidents is a prevention. It is established in the cantons of Valais, Fribourg ticeships – double the level three years ago. internally in 2020. The absenteeism rate was 3.43%, of which Group-wide priority. and Geneva, as well as in Neuchâtel now. • In 2020, the Group offered a diverse selection of training illness accounted for 2.44 points, occupational accidents for 0.28 • The Group actively raises awareness among its employees in a courses to develop collective intelligence, help managers to act points and non-occupational accidents 0.63 points. Employee bid to reduce non-occupational accidents and prevent Championing sport as coaches, strengthen various forms of leadership and educate turnover stood at 7.07%. addictions. • Our Health & Safety programme encourages sport through pre- employees about the ins-and-outs of CSR. • No assaults, incidents or harassment were recorded in 2020, but ferential-rate gym membership packages and discounted sports • Three departments decided to pilot a shared governance pro- the number of workplace accidents sadly increased. The number equipment. The buildings’ facilities, which include showers and ject, working with an external coach and Human Resources to of occupational accidents rose to 29 in 2020 from 23 in 2019. This changing rooms, together with flexible working hours make it make sure everyone understands the approach and applies the unacceptably high number reflects the growth in the number of much easier to organise sports activities. same practices. employees and apprenticeships and the addition of new construc- • The Agir Maintenant (Act Now) programme raised employees’ tion-related business lines. None of our employees suffered Satisfaction surveys and role of employee representatives awareness about climate change and helped them find ways of serious accidents (disability or after-effects) in 2020. Tragically, • Romande Energie regularly carries out employee satisfaction and reducing their environmental impact. however, a subcontractor’s employee lost his life while working engagement surveys. The response rate is always close to 80%. on our installations. After these surveys, measures are formulated for every aspect • Lastly, an absence management system helps us to manage of the organisation that can be improved. An action plan is then personal issues at an early stage. drawn up to implement the proposed improvements. A Net Promoter Score reflecting employees’ willingness to recommend Romande Energie as an employer was achieved in 2020. In the future, we will include this among our strategic goals. • Employee representatives are regularly briefed on business AVERAGE NUMBER OF EMPLOYEES AND DISTRIBUTION BY AGE AND GENDER trends and are involved in and consulted on changes to the HR policy. Management’s goal is to reap the benefit of collective intelligence and empower every employee by involving them as Women account for just 21% of the workforce, a fairly low level for a listed company, but in line with the energy sector average and much as possible in the decisions affecting them. What’s more, stable relative to 2019. The age pyramid reflects a healthy balance between the various generations: 25% are 30- to 40-year-olds, Romande Energie’s Employee Representative Body, the Group’s 23% are 40- to 50-year-olds and 23% are 50 or over. Young people under 30 account for 22% of the workforce, and senior employees key labour partner, is consulted whenever the HR policy or job 60 or over make up almost 6%, demonstrating that the business creates jobs for the younger generation and keeps older employees conditions are amended. Negotiations take place every year until retirement age. concerning changes to job conditions and pay, and meetings with the Executive Board are held throughout the year. Breakdown by age bracket and gender FTE (full-time equivalent) workforce

15 to 25 19 97 Romande Energie SA 584 “GIVEN THE INCREASED RISKS AS 26 to 30 17 95 Romande Energie Services SA 351 A RESULT OF THE PANDEMIC, WE 31 to 35 19 96 Romande Energie France SAS 1 36 to 40 36 108 INTRODUCED THE PARENTHÈSE Total 937 41 to 45 33 80 PROGRAMME FOR MANAGERS AND 46 to 50 37 86 51 to 55 33 88 EMPLOYEES TO ADDRESS THE 56 to 60 20 97 SUBSTANTIAL EROSION IN SOCIAL TIES Over 60 4 57 CAUSED BY THE ENFORCED PERIOD OF Total 1,022 Women 218 Men 804 Figures at 31 December 2020 HOMEWORKING.”

18 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 19 ACTING RESPONSIBLY WITH SOCIETY Supplier Charter to achieve standards compliance • Every year, the Company hosts around 15 unpaid interns, who • Romande Energie’s Supplier Charter is currently being finalised. are given the chance to learn about Romande Energie’s various It aims to secure a commitment to standards from suppliers, who jobs over periods ranging from a few days to several weeks. Ten are asked to commit to a higher level of social and environmental or so paid interns were involved in business projects running for Given the nature of its business activities generating 100% renewable Satisfying our customers responsibility in their activities and to deliver services of a high around six months on average. The Group also offers three energy, distributing electricity and delivering innovative turnkey energy • Customer satisfaction is tremendously important to Romande calibre. Romande Energie treats its suppliers as long-term par- interns an internship opportunity as part of their business school services, Romande Energie positively impacts society in Western Energie. It regularly measures the satisfaction levels of household tners and gives priority to businesses that make commitments training. Switzerland, supporting mobility and the upgrade of its housing stock. customers and of its other main stakeholders. We intend to make and live up to their social and environmental responsibilities. The The Group also works alongside its external stakeholders – sub- sure the way we do business is completely consistent. That will Purchasing department is constantly raising the bar in terms of Raising public awareness about renewable energies contractors, suppliers, customers, interns and apprentices – to only be possible only if we pool all our knowledge and expertise the environmental and social standards it applies. • Romande Energie runs the Explorateurs de l’Énergie (energy broaden the reach of its CSR policy. to create customer-focused products and services. Romande • To build a constructive and practical dialogue, a workgroup incor- explorer) challenge, a game which annually teaches some 2,500 Energie’s Net Promoter Score has held up at a high level of porating suppliers will be set up. Several workshops have been pupils about Western Switzerland’s key energy challenges. The Delivering universal access to energy, 22 (Swiss average in the energy sector: 20), reflecting a high scheduled for 2021 to involve our suppliers in shaping this educational programme for the region’s teachers and students energy services and fibre optics recommendation rate. The NPS takes the pulse of the market workgroup. is organised as a competition to select the top ten classes (over • Romande Energie is Western Switzerland’s leading electricity and helps the Group to fine-tune programmes to achieve its SOCIALCORPORATE RESPONSIBILITY • Romande Energie works directly with its suppliers and seeks to 250 students) in terms of the knowledge they have gained about supplier. In 2020, the Group generated around 580 million KWh, strategic goal of continuously improving its customer satisfaction make its supply chain more secure by entering into framework renewable energies during the year and to award prizes to the serving close to 300 municipalities and almost 300,000 direct by providing solutions that genuinely deliver added value for agreements. To maintain a high-quality supplier base, the Group top three. customers. Its operational footprint extends to the cantons of users. Various customer pathways are studied as part of this chooses the partners it works with carefully, soliciting references • Romande Energie arranges visits to three of its generating faci- Valais, Fribourg, Geneva and now Neuchâtel. analysis, with feedback from users taken on board continuously and at times conducting audits. The supplier or service provider lities. Over 2,000 people have taken up the opportunity to visit • It provides innovative turnkey services helping to cut households’ as we strive to achieve constant improvements in customer audit is a cornerstone of the quality assurance process covering these power plants in recent years (except in 2020 when visits power consumption. In an average year, the Group installs or experience. At the same time, the Group is actively working on the products and services Romande Energie buys in. Not only is had to be cancelled owing to the pandemic) to gain a better carries out: developing measures to satisfy its customers in real time after it it a useful source of information that goes beyond the normal understanding of the various types of renewable energy genera- - 100 residential photovoltaic units has completed installations or grid connections. scope of administrative and business discussions; it also helps tion – i.e. solar, hydro and biomass. - 30 heat pumps to forge closer ties and build partnerships. - 700 district lighting projects Encouraging tenants to generate their own electricity - 10 building renovation plans. Apprenticeships and job creation • The recently introduced Jardin Solaire (solar garden) project has • Every year, the Group expands its fibre-optic network, which is • Every year, Romande Energie takes on approximately ten new provided a way for all the Group’s customers – including tenants now over 750km long. “THE GROUP ALSO WORKS ALONGSIDE ITS EXTERNAL STAKEHOLDERS – apprentices, grid electricians and commercial employees and – to invest in photovoltaic installations not located on their own Charging point installations for electric vehicles assigns them to one of 13 apprenticeship schemes. The grid elec- roof. The Jardin Solaire project was set up in March 2019 and trician apprentices are given 116 days of hands-on training at the became operational in 2020. This innovative formula providing • With the growth in sales of electric vehicles, the number of char- SUBCONTRACTORS, SUPPLIERS, specialised CIFER (grid electrician training community) training co-ownership of solar power plant (at Mont-sur-Rolle on the roof ging points installed in homes, at businesses and in municipal CUSTOMERS, INTERNS AND centre as well as in-house. The commercial apprentices work in of Favez Energie) will now be expanded to other locations. areas has surged. An agreement was reached with Migros Vaud six different departments to gain a broad vision of the options to equip a dozen supermarket car parks with 48 self-service APPRENTICES – TO BROADEN THE available to them. In 2020, the Group had around 50 apprentices, charging points. REACH OF ITS CSR POLICY.” with its goal being to train more. Pursuing digitalisation to meet our customers’ needs even more effectively • Digitalisation is gaining tremendous traction across all listed businesses, including in the world of energy. In 2019, the entire Maintaining employees’ and subcontractors’ satisfaction process of pricing solutions for business customers switched over and safety “AS ALL THESE SOCIETY-FOCUSED INITIATIVES to a new digital platform. Initially, the system was used only inter- • Romande Energie endeavours to inform and train its employees nally – until in 2020 the entire contracting and invoicing chain was to keep them safe in the workplace. The duties of every DEMONSTRATE, ROMANDE ENERGIE IS A PROACTIVE automated, paving the way for customers to be offered a higher- employee are laid down, and department memos documenting standard service at lower cost. The energy questions blog was the potential hazards are prepared and made available to staff. AND PEOPLE-FOCUSED EMPLOYER OFFERING JOBS launched with a view to supporting customers with their own These memos are reviewed at regular intervals. What’s more, WITH THE POTENTIAL TO EVOLVE, CAREFULLY energy transition, providing a valuable collection of expert audits and training courses take place regularly on the front line. insights, consultants’ videos, tutorials and customer Individuals directly affected are asked to join in workgroups MONITORS ITS GENDER BALANCE, FOSTERS THE testimonials. devising safety rules, as well as various company bodies (health DEVELOPMENT OF INTERNAL SKILLS TO PROMOTE & safety, live working, low-voltage working), to put employees’ right to have a say into action. COLLECTIVE INTELLIGENCE AND RESPONSIBILITY TO SOCIETY, AND ENCOURAGES ALL ITS INTERNAL AND EXTERNAL STAKEHOLDERS TO GET INVOLVED AND WORK TOGETHER WITH IT.”

20 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 21 GREENHOUSE GAS FOOTPRINT

2. ENVIRONMENTAL PILLAR SCOPES 1 AND 2 8.5% of total emissions The environmental pillar, overseen directly by the Chief Executive Officer, aims to find ways in which the Group can tread more lightly on its natural environment and everyone can play a part in the shift to cleaner energy. The ultimate goal is to generate and distribute 100% renewable energy and carefully select suppliers under a charter currently being finalised that enshrines environmental protection as a core value. 23% | 1,553 tonnes The Group measures and find ways to cut its own greenhouse gas emissions (GGE) and has published its second GGE footprint. Movements by RE-owned vehicles It urges its employees to adopt greener ways of working and living, and provides relevant training and briefings. 8% | 534 tonnes

Fugitive emissions (climate control, SOCIALCORPORATE RESPONSIBILITY refrigeration, circuit breakers OUR OBJECTIVES 52% | 3,475 tonnes 6,719 District heating (fossil fuel) tonnes 3% | 234 tonnes Building heating systems and project Romande Energie Group has published its second GGE (greenhouse gas emissions) equipment (fossil fuel) 2% | 118 tonnes footprint setting future targets for lowering such emissions. Wood and pellet combustion

Romande Energie tirelessly seeks to make it easier for its customers from 8,341 tonnes in 2019 to 6,719 tonnes. This reduction reflects SCOPE 2 to adopt cleaner energy solutions. Correspondingly, it transparently lower heating consumption figures at our buildings in 2020 with the 12% | 805 tonnes endeavours to assess the carbon footprint of its own efforts to widespread switch to homeworking and district heating upgrade Grid losses (direct and indirect) achieve that goal. The Group published its second greenhouse gas during the autumn and winter period. emission report covering its activities in 2020, which demonstrated The Group’s activities thus account for the equivalent of the how far we have come. average emissions of 1,022 people in 2020. Scopes 1 and 2 do not SCOPE 3 The report was based on the international GHG (Greenhouse take into account all emissions generated upstream and downstream Gas) standards in force for 2020. The scope of emissions generally of the Group’s activities, however. 68% | 50,000 tonnes 91.5% 27% | 19,521 tonnes analysed by businesses are scopes 1 and 2. These show the direct Romande Energie has made the second estimate of these so- Purchases of total emissions Electricity sold to customers emissions from fixed or mobile sources and indirect emissions from called Scope 3 emissions in 2020 and intends to gain a clearer the generation of purchased electricity, steam, heating and cooling picture of the upstream and downstream emissions caused by its 5% | 3,697 tonnes consumed by the reporting company. The Group’s activities gene- activities. This first evaluation of the impact of our activities has Other

rated 6,719 CO2-equivalent tonnes across these two scopes, i.e. prompted Romande Energie to make progress and to pledge it will for all companies in which Romande Energie Holding owns an take measures to cut greenhouse gas emissions across the Group interest of at least 50%. This outcome was highly encouraging as over the medium to long term.

our greenhouse gas emissions fell by 1,622 CO2-equivalent tonnes,

Scopes 1 and 2 in 2020 Equivalent of the average emissions of 73,218 6,719 1,022 tonnes CO2-equivalent tonnes people in 2020

For 2020, Romande Energie set itself a target of reducing its carbon intensity by 5% per CHF of revenue generated. The same target will be set for 2021 following its successful achievement in 2020.

22 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 23 OUR COMMITMENT TO ENVIRONMENTAL PROTECTION • Offering customers products and services • Waste management, recycling and recovery to unlock energy savings Administrative and industrial waste is selectively sorted. With oil, Our solutions empower consumers by tracking their consumption for example, we are required to abide by our ESTI permit checking Products and services contributing to decarbonisation A new Supplier Charter incorporating these audits is currently online so they can reduce their environmental impact. We compliance with the standards in force. In offices, we collect The services provided by the Group help to decarbonise our ways being drafted to help drive constructive engagement with suppliers. endeavour to develop and market products and services enabling paper separately from other forms of waste. We have special of life. We tirelessly look for new ways to help our customers reduce This genuine dialogue aims to increase their commitment to positive customers to save energy and become more self-sufficient. To containers collecting waste glass, PET and batteries. Central

the CO2 emissions associated with their energy consumption by action alongside Romande Energie for the environment and society. achieve this, we are constantly making new additions to our range services are responsible, under a partnership with Spontis SA, marketing practical solutions. For example, our contracting packages In its current form, the document maps out how Romande Energie of solutions, such as heat pumps, heat-pump boilers, photovoltaic for disposing of all waste. Collection and sorting containers for simplify the switch to a heat pump or the installation of solar panels. and its suppliers should interact, and includes a presentation of the panels, solar thermal panels, storage batteries, end-of-life project waste have been set up in our plants, supported by an In addition, Romande Energie strives to deliver 100% renewable Group’s activities and its CSR-led, safety-oriented sourcing policy, dismantling and recycling services for installations. In addition, information campaign for our employees. hydro and solar energy (100% of Swiss origin from 2021) to all its as well as a Code of Business Conduct for suppliers, which have to our goals in energy services are to offer end-to-end solutions captive customers. reduce their environmental impact as far as possible. tailored to meeting our customers’ expectations and be the • Positive impact on biodiversity Romande Energie regularly studies satisfaction levels among its leading provider in the marketplace, through a combination of Since 2019, Romande Energie has undertaken various activities

Own generation facilities 100% renewable and local suppliers through anonymous surveys. In 2020, they gave us an organic growth and acquisitions. We are also pushing ahead with to protect biodiversity. We completed projects protecting SOCIALCORPORATE RESPONSIBILITY The energy generated by the Romande Energie Group is 100% outstanding first Net Promoter Score of 50. various ground-breaking infrastructure projects, such as solar biodiversity in a flood plain by renaturing the Grand Canal at renewable and comes from our local region. Its share of our elec- arrays on car park roofs and district heating powered by energy and implementing mitigation measures at Vionnaz. tricity mix is steadily growing and currently stands at around 20%. Our solutions supporting lower-carbon energy consumption recovered from a wastewater treatment plant. As we optimise the performance of generating facilities and pursue The Group also guides and supports its customers seeking greener • Volunteering our development strategy, further increases will follow. In addition energy options by providing solutions decarbonising their energy • Raising public awareness about energy and Our employees spent an afternoon weeding out invasive plant to our largely hydro and solar generation facilities, we also develop consumption (heat pump contracting and solar energy contracting) environmental issues species and removing waste from the lakeside at the Maison de district heating and cooling solutions, helping users of these services and to raise their energy efficiency. The Déclics energy efficiency programme is a participatory la Rivière nature education centre. to move away from fossil fuel-powered systems and to lighten the energy savings and efficiency platform set up to raise public load on the environment, especially in terms of its greenhouse gas • Facilitating decarbonisation by designing products and awareness about energy and environmental issues linked with Our internal employee-focused campaigns emissions. services that can deliver a smaller carbon footprint our modern lifestyles and to help minimise our footprint. The Group’s policy is to maximise the use of renewable energy Romande Energie wants to have a genuine impact on society’s Over the years, we have also established the Explorateurs de sources for its own needs. Romande Energie employs renewable Our responsible sourcing policy is geared decarbonisation in the areas where it operates. It designs its l’Énergie (energy explorer) educational game for schoolchildren in energies and consumption-reduction systems at all its new and to reducing our environmental impact products and services to smooth the energy transition across its Western Switzerland. It has been a massive hit, with 2,500 pupils renovated buildings. Our Rolle building was fitted with heat pumps, Romande Energie’s Purchasing department builds in supplier selec- various customer segments: municipalities and industrial taking part in recent years. Lastly, we attend business events as a and it uses the renewable energy generated locally at the Terre tion requirements to help promote sustainable development. companies, via solar energy contracting. Romande Energie partner promoting a greener vision of the future. For example, we Romande facility, while the Yverdon office has solar panels and a Wherever possible, the Group works with suppliers and service invests on customers’ behalf in fitting solar panels and guarantees were involved in the Forum des 100 debate focusing on solutions heat pump, and the Morges facility is connected up to a district providers who have embraced a green approach to the environment a fixed electricity price over the subsequent years. for the future of Western Switzerland, and our CEO addressed the heating network. – provided they are competitive. For households, Romande Energie covers the cost of investing opening event of Global Entrepreneurship Week 2020 held by the The Agir Maintenant programme was introduced in 2020. Its goal Romande Energie regularly assesses its suppliers based on an in a new heating system to replace an existing heating-oil boiler University of Lausanne, speaking about the 2030 Sustainability is to promote measures minimising our environmental impact. audit schedule listing all the tasks performed and the outcomes. with a heat pump, for example. The customer then pays a fixed Target and a new responsibility-based vision for entrepreneurs Employees were also able to attend training and given information Various types of audit are carried out, including for the start of a amount over a given period for heating their home. and businesses. about climate change. partnership, for a major supplier, for the sole supplier of a product, or for resolving a failure. Our actions to protect the environment and biodiversity • Supporting soft modes of transport within the Group • Lower water consumption and measures Romande Energie supports soft modes of transport by giving all to protect the environment its employees a voucher every year covering the cost of the Romande Energie systematically fits low-flow taps in its annual half-fare CFF Swiss railways pass. Since 2020, employees installations, and our Rolle facility has settling systems at all critical have been able to use a fleet of electric bikes for journeys points and a rainwater recovery tank. Relevant measures are taken between the Group’s various facilities, for example. Commuting wherever an installation carries a potential pollution risk, such as journeys have been reduced substantially with adjustments to those implemented at stations without an impermeable base. The company rules, allowing employees to work from home for up to “ROMANDE ENERGIE STRIVES TO DELIVER Enerbois biomass generating facility has established a closed three days, where their jobs permit. Lastly, Romande Energie’s 100% RENEWABLE HYDRO AND SOLAR ENERGY circuit for industrial water processes that returns clear water to the fleet is gradually switching over to electric vehicles. natural environment via run-offs. The system includes a retention (100% OF SWISS ORIGIN FROM 2021) TO ALL container and a specially equipped pond. ITS CAPTIVE CUSTOMERS.”

24 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 25 Four stakeholder commitments Inclusive approach to creating new solutions Romande Energie has made the following commitments to its various for stakeholders internal and external stakeholders: Romande Energie belongs to various workgroups alongside AES, 3. ECONOMIC PILLAR 1. inform (reports, brochures, website, press releases, events) Elcom, SwissGrid and ESTI Collaborateurs to help it address the 2. listen (evaluations, media, online surveys, discussions, letters, diverse views of its internal and external stakeholders. It has also customer area, investor area, supplier area, hotline) set up a public-private partnership with the Haute Ecole d’Ingénierie 3. involve (meetings, workshops, forums, intranet, social media) et de Gestion, an engineering school in the canton of Vaud, to 4. work collaboratively (partnerships, idea sharing platform) advance the energy transition. Romande Energie’s footprint in the Romande Energie’s mission as an energy company is to support the decarbonisation of Western Switzerland in line with the federal government's local area is substantial since it delivers services to 300 municipal- strategy for 2030. The economic pillar underpins the Group’s expansion in renewable energies and places innovation at the very heart of its Ongoing stakeholder dialogue ities and works together with the regional authorities. Its custom- approach. The pillar is overseen by the Digital & Innovation unit to ensure that these priorities are met as effectively as possible. Romande Energie’s divisions have established a regular, high-qual- er-focused Integrated Management System (IMS) aims to achieve Romande Energie is expanding its investments in renewable energies, developing new products and solutions, and establishing itself as a ity dialogue with all the Group’s stakeholders. They are identified at complete satisfaction. All customer complaints are considered care- major local force which can help businesses, local authorities and households in Western Switzerland embrace the energy transition. an early stage for major projects and certain sensitive projects, and fully, and several investigations are carried out every year. In addi- In an industry at long last waking up to the importance of customer experience, the economic pillar supports a culture of innovation extending a dialogue is nurtured (e.g. for the Sainte-Croix wind farm project tion, Romande Energie held a workshop in 2020, attended by rep- to stakeholders and resolutely focused on its customers, using digital technologies, an agile approach, design thinking and collective SOCIALCORPORATE RESPONSIBILITY and the Clées substation). Stakeholders’ views are sought as a resentatives of all its stakeholders, on 'how to decarbonise Western intelligence. matter of course. Switzerland by 2040'.

DEVELOPMENT CHAMPIONING RENEWABLE ENERGIES

Expansion in business activities promoting renewable • Purchase of the Romanel-sur-Lausanne INNOVATION POWERING THE ENERGY TRANSITION energies and the shift to cleaner energies in Western and Bussigny electricity grids Switzerland Romande Energie acquired the Bussigny electricity grid in 2019 Romande Energie aims to meet the changing needs of its customers followed by the Romanel-sur-Lausanne electricity grid in 2020, Innovative and responsible projects innovation is a means of reshaping or adjusting the value propo- and to build up its capabilities right across Western Switzerland. It which it had already operated for several years. These two power Romande Energie encourages its employees – whatever jobs they sition of a business and to boost its market capacity. Employees provides a broad range of innovative added-value, turnkey solutions, grids needed substantial investments, which Romande Energie do – to use their collective intelligence to pursue new or contribute to can actively contribute to it. chiefly as a supplier of electricity from renewable sources, electrical will carry out to maintain the highest supply and service standards the Group’s existing innovation-led projects. → Examples: Smart City, solar energy contracting, Asset PV installations and heating (including heat pumps and district heating), for the local population on a cost-effective basis. Longstanding and energy efficiency. ventilation, sanitation, climate control, refrigeration, electrical ties were a key factor in the municipalities’ decision to sell their Three types of innovation cleanrooms, and solar photovoltaic and thermal solutions. The Group grids to Romande Energie. Romande Energie has been actively involved for many years in These types of innovation provide a degree of novelty for customers, pressed ahead with its national and international expansion in • Romande Energie’s expansion in the French renewable innovating to create value and accommodate environmental drivers. for Romande Energie and for our sector of activity, as illustrated below. renewable energies, by acquiring several companies, electricity grids energies sector It employs three types of innovation: and wind farms in 2020. Following the purchase of several hydro, solar and wind facilities • Acquisition of Toutelec SA in Monthey (Valais), to be integrated since 2013, Romande Energie France established a partnership 1. Disruptive innovation will form the bedrock of future growth Innovation and degrees of technological novelty, within the Group with effect from 1 January 2021 with the Calycé group in November 2020 to co-develop a portfolio and aims to explore and release the potential of new business areas market and customer After Geneva and the , the Group has of 16 wind farm projects in the Grand Est, Hauts-de-France and for Romande Energie. This type of innovation identifies the busi- expanded its operations into the Chablais region of the canton of Pays de la Loire regions of France. These projects have a total nesses of the future, so the Group can adapt and rise to the tech-

Valais where Toutelec has operated since 1991. The company’s power rating of 646 MW. This deal gives substance to Romande nology, economic, social and environmental challenges it faces. activities encompass electricity, telecoms and security services. Energie’s goal of speeding up the energy transition in the areas it → Examples : Décarbonons and REél (Locally balanced network).

With effect from 1 January 2021, all Toutelec SA’s employees supplies. New for sectorour of activity

joined Romande Energie Services SA, which is thrilled to be 2. Adjacent innovation leverages the Group’s existing key skills Disruptive playing its part in the economic development of the Lower Valais and assets to build new value propositions for our business par- region. Romande Energie Services’ goal is to build up its tners. The purpose of this type of innovation is to transform and presence in electrical installations in the canton and to boost accelerate the development of the business and its ability to bring uptake of cleaner energy solutions by marketing a whole range new solutions to market. Adjacent innovation is a way of moving New for us

of services supporting decarbonisation. into new areas of value creation while taking less risk than with Adjacent disruptive innovation. → Examples: HaaS (Home as a Service) and Click&Charge.

Known but improved Incremental 3. Incremental innovation supports the Group’s existing business DEGREE OF MARKET AND CUSTOMER NOVELTY models as they move along their development or transformation New for trajectory. This type of innovation aims to assist existing business Known but New for us our sector lines with their future development and provide tools for them to improved of activity innovate on their own to meet the constantly changing needs and requirements of customers and other stakeholders. Incremental DEGREE OF TECHNOLOGICAL AND SOLUTION NOVELTY

26 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 27 3 CLICK & CHARGE: EXPANDING ACCESS TO CHARGING FOR ELECTRIC VEHICLES INNOVATION AND RESPONSIBILITY AT THE HEART OF OUR PROJECTS → Background: electric and hybrid vehicles account for a steadily growing share of new

vehicle sales in Switzerland. Romande Energie is offering a ground-breaking concept in

Western Switzerland helping to overcome barriers to electric vehicles for property tenants Romande Energie endeavours to embed the 'triple bottom line' approach with the three pillars of CSR into how every project is managed. and owners by installing charging infrastructure in car parks. In the following section, we present several examples of our innovative and responsible projects. → Characteristics: Romande Energie markets an innovative solution enabling any owner or manager of a building with a car park to pre-equip their property with charging points. This flexible and responsive approach helps them to meet the needs of car park users, 1 THE SWISS FEDERAL OFFICE OF ENERGY (SFOE) BESTOWED THE WATT D’OR 2021 who already own or are planning to buy an electric vehicle. The property owner signs up AWARD ON THE WORLD’S FIRST HIGH-ALTITUDE FLOATING SOLAR FARM to the recharging service at no cost. Romande Energie covers the full cost of fitting the → Background: working closely with the Bourg-St-Pierre municipal authorities and the necessary equipment in advance, and then tenants and co-owners can sign up to the SFOE, Romande Energie has built the first high-altitude floating solar farm on the Lac Click & Charge service on a digital platform. Romande Energie installs a charging point des Toules. The results of the pilot phase are currently being analysed to decide on the directly serving their parking space, supplying the energy and handling troubleshooting.

financial, environmental and technical criteria for the future extension of the facility to → Impact on stakeholders: this solution directly addresses the needs of property tenants SOCIALCORPORATE RESPONSIBILITY cover around one-third of the lake so electricity covering the consumption of around and owners, and indirectly helps to encourage sales of electric and hybrid vehicles. 2,200 households can be generated. → Social and environmental impact: this project provides convenient access to recharg- → Project characteristics: the project is going ahead in three stages, the first two of which ing infrastructure in the car parks of residential buildings, removing a potential barrier to have already been completed: (1) feasibility studies, (2) entry into service of a pilot pro- purchases of electric and hybrid vehicles for tenants and owners, thus enabling them to ject to demonstrate the floating solar farm’s technical and financial feasibility, (3) if the adopt a greener way of life. results of stage 2 are positive, construction of the large-scale floating solar farm. The extreme conditions the installation faces at an altitude of 1,810 metres pose a major challenge. Romande Energie has established itself as a global pioneer in the area by taking on this challenge → Impact on society and the environment: this floating solar farm with panels covering an area of 2,240m² generates around 800,000 kWh p.a. to cover the annual consump- tion of 2,200 households.

2 DIGITAL & INNOVATION: THE GROUP’S NEW INNOVATION DRIVER 4 REÉL (RÉSEAU EN EQUILIBRE LOCAL, LOCALLY BALANCED GRID)

→ Background: the Digital & Innovation unit established on 1 January 2020 now houses → Background: In line with the federal government’s Energy Strategy 2050, REél provides all the activities acting as a catalyst for and boosting innovation and the Group’s digital a solution integrating renewable energy sources into the electricity grid while helping to transformation. These include our digital factory – Information Systems, Data Factory, meet demand for electric-powered mobility. The project is backed by the Swiss Federal Digital Academy and Innovation Lab – marketing and communication activities, and the Office of Energy, Vaud Canton’s Environment department and the municipality of , oversight of our management systems and processes. which is looking to take its European energy award accreditation to the next level. The → Characteristics: this new organisational unit is tasked with leading the shift in the project began in 2017 and is set to run until 2022 at several Romande Energie sites. culture, technology and relationships necessitated by the Group’s digital transformation. → Characteristics: in 2020, Romande Energie and the SCCER-FURIES skills centre Greater value is now unlocked from data for both the Group and our customers following have installed an industrial-scale test storage battery at Aigle together with Leclanché. the transfer to a new data factory of the skills acquired since 2017 by the Smart Lab and Since solar energy production is variable by its very nature, this battery technology our IT teams, plus additional expertise. The lab located at the Swiss Federal Institute of will allow the surplus energy generated during the daytime to be used in the evening. Technology Lausanne (EPFL) became an incubator, catalyst and innovation evangelist This lithium-ion battery, which is 12 metres long, with a capacity of 2.5 MWh and a for the entire Group in 2020, The digital academy addresses the cultural dimension of power output of 2 MW, will deliver the benefit locally of the region’s abundant solar the paradigm change required to put our agile approach and design thinking into practice. power potential. What’s more, Swiss company Gofast will use this type of battery to → Impact on stakeholders: the Digital & Innovation unit functions as an ecosystem dis- create a rapid charging point for electric vehicles. Ultimately, it will provide 24 rapid tributing knowledge to key stakeholders. It provides targeted support and fresh ideas to charging points with a total output of 1.8 MW. anchor the Group’s digital practices and lay the foundations for its future plans. → Impact on stakeholders: the GOFAST rapid charging points compatible with all marques → Impact on society and the environment: the Digital & Innovation unit is a facilitator will enable users to power up their vehicles for journeys of up to 200km during a coffee that helps the Group to respond more rapidly to the new business opportunities arising break or similar period of time. What’s more, the project is important for researchers from renewable energies and thus to achieve a major environmental impact. Thanks to because it is expected to yield insights into how to improve the power grid management this project, the impact of innovation can now be felt across a broader range of busi- and monitoring system and on interactions between the various grid levels and generating nesses and is helping to drive internal changes within the Group to accommodate the installations. It will also help to raise public awareness about technologies driving the shift cultural transformation and greater openness to innovation. to cleaner energies. → Social and environmental impact: REél is a participation-based, environmental and social study that aims to establish the efficacy and future viability of the Energy-HUBs managed by their owners using smart control technologies. Lessons learnt from the project should optimise management of the second life of batteries recovered from the automotive industry (stage prior to the recycling of the mined resources).

28 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 29 5 JARDIN SOLAIRE: BREAKING DOWN BARRIERS TO PHOTOVOLTAIC ENERGY GENERATION

→ Background: Jardin Solaire is intended to be major solar farm open to everyone, open- ing the way for consumers themselves to become generators of local solar energy without installing panels on their rooftop. They can also set off the power they generate OUR DIGITAL RESPONSIBILITY against their electricity bill. Building on a successful initial trial at Mont-sur-Rolle in 2019, Romande Energie scaled up the venture in 2020 and now offers a project at Etagnières in the canton of Vaud. IN FOCUS → Characteristics: customers can purchase solar panels on a rooftop that does not belong to them to generate renewable energy locally. The solar power generated by these panels is injected into the local grid, and the equivalent number of kilowatthours (kWh) generated is deducted from the buyer’s electricity bill. Digital responsibility is part and parcel of our governance framework and dovetails with → Impact on stakeholders: Jardin Solaire provides a solution perfectly geared to property tenants and owners who want to play an active part in advancing the energy transition. our three CSR pillars. Romande Energie is actively overhauling all its services as part → Impact on society and the environment: Over 1,000 panels, equivalent to a surface of its digitalisation drive. SOCIALCORPORATE RESPONSIBILITY area of 1,700m², are expected to be bought up by spring 2021, paving the way for con- struction of a large solar farm at Domaine de la Petite Chamberonne, owned by Bertrand Pittet, a farmer in Etagnières.

6 HOME AS A SERVICE: ENERGY SOLUTIONS FOR DETACHED HOUSES

→ Background: detached houses account for 25% of homes in Western Switzerland, but 38% of electricity consumption. Making them more energy efficient is thus crucial for the success of the energy transition:

• A geothermal heat pump can reduce heating-related CO2-equivalent emissions by a factor of between 4 (compared with natural gas) and 6 (fuel oil) • The combined photovoltaic output from individual detached houses in Western Switzerland adds up to the equivalent of the power generated by a nuclear plant

• Electric vehicles can lower mobility-related CO2-equivalent emissions substantially • Thermal shell upgrades can also play an extremely important role for buildings aged over 30 years. → Characteristics: Romande Energie wants to speed up the energy transition of detached houses by providing their owners with a full range of services supporting them through- out their journey. Its online service makes comparisons easier, smoothing the process of deciding whether to replace standard heating with a heat pump. In just a few clicks, owners can get a free quote. To encourage these investments as much as possible, a leasing option is also available, significantly cutting the upfront capital required. By adding solar panels into the equation, detached homeowners can maximum their generation of clean energy and efficiently use heating from a renewable source. → Impact on stakeholders: this solution significantly streamlines for owners the com- plexities involved in switching over from fossil fuel-based heating to an efficient heating The Group’s goal is to offer its customers, employees and expertise in areas related to culture, methodology and technological source that can be 100% renewable with the right electricity mix. Owners are supported stakeholders as much digital agility as possible to ensure that the potential to address the complexities of our current era. and given simple solutions to the issues and questions they may have concerning the digital transition serves as a carefully considered, sustainable It provides the benefit of its knowledge to the Board of Directors home’s switchover to greener solutions and cutting their carbon footprint. innovation driver. Romande Energie has pledged that its digital and to employees so that they are all perfectly aware of the stakes → Social and environmental impact: by facilitating a switch from a fuel-oil boiler to a transformation should accommodate ethical, social and arising from data and the potential of new technologies. heating system powered by self-generated clean energy, this project represents a poten- environmental criteria clearly defined in terms of the transparent data The Digital & Innovation support unit also carefully builds and tial route for one-quarter of the homes in Western Switzerland to embrace the energy use by AI and eco-friendly management of data centres. maintains strong relationships with customers: they are the focus

transition. Each fuel oil boiler replaced cuts CO2 emissions and brings attainment of the Romande Energie is a trailblazer in digital ethics, and its experts of everything it does. Respect for customers and their interests federal government’s 2050 objectives a step closer. are part of research and analysis groups in Western Switzerland always guides the development of our products and services. The looking at these areas. In addition, the Group is currently in the unit, which is currently drafting its charter, factors ethical aspects process of drafting a digital ethics charter. into all its planning.

Our digital governance Our commitments to digital transparency Romande Energie has a Digital & Innovation support unit, which acts Romande Energie’s Digital & Innovation support unit worked hard as a digital transformation catalyst. It supports the Group’s businesses during 2020 on introducing an opt-in process (under which individuals with their digital transformation and brings to bear the relevant have to give their prior and express consent before their data may be

30 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 31 used) perfectly aligned with the requirements of the Swiss legislation Romande Energie firmly believes that trusted, responsible AI can (FADP and ESA). That review prompted the Group to make pledges deliver benefits for society. In many cases, the underlying intentions, concerning sensitive personal data. Romande Energie has undertaken rather than the technology per se, should be questioned. One key to protect data internally through pseudonymisation, to safeguard example of this are the algorithms used by certain universities in the ROMANDE ENERGIE GROUP’S secure and password-protected access for customers to their profile US to detect students with the least chance of completing their and to guarantee that their data cannot be manipulated without the studies successfully. Certain universities apply these algorithms to customer’s free and informed consent. weed out students at risk and maintain their ranking, whereas others CERTIFICATIONS use the same algorithm to provide the necessary assistance and • An opt-in document was drafted with the assistance of data-pro- stop them from failing. tection specialists and lawyers. It meets all the relevant legal requirements, such as lawfulness, proportionality and clarity of Managing our data centre’s environmental impact The Romande Energie Group and its subsidiaries have a long track record of operational excellence. To better meet the expectations of its purpose. The Romande Energie Group is mindful of its data centre’s environ- customers and partners, it is rolling out a management system encompassing all issues related to quality, employee health & safety, sustainable • For the time being, the opt-in document merely covers distribution mental impact. It has looked into ways of reducing its energy development and responsibility to society. Romande Energie adds value to its management system by applying for certifications to: network management activities. As a result, it targets enhanced consumption and raising its energy efficiency. Installing an air-condi- • Gain better access to markets by meeting customers’ expectations and requirements SOCIALCORPORATE RESPONSIBILITY network management and operation. tioned alleyway between servers and systematic integration of • Raise its internal performance through continuous improvement • The document expressly states that data should not be passed energy consumption as a factor in equipment tenders are practical • Demonstrate its commitment to advancing society through clear commitments to the economic, environmental and social pillars of on to third parties. examples of the measures put in place to lighten our impact on the sustainable development. • Physical data security is safeguarded by the application of an environment. ISO 27001-compliant information system security policy. In addition, Romande Energie has brought in the EPFL’s GreenIT unit and the Zero Emission Group to participate in a comparative To further enhance the process, the Digital & Innovation support European study and analyse our information system. This study will unit is actively involved in work on data anonymisation research. provide access to the GreenIT.fr club’s information, as well as a ACCREDITATIONS AWARDED detailed report and recommendations. This commitment is planned during 2021. Our commitment to responsible use of AI Likewise, Romande Energie supports the Ecole 42 Lausanne The Integrated Management System (IMS) has been deployed in Romande Energie Group’s businesses for several years. This scalable The legislation applicable to the ethical and social impact of AI and initiative, which teaches students ways of minimising the power system has gained OHSAS 18001 (ISO 45001 since 2021), eco-business, ISO 9001 and ISO 55001 certifications. It has been introduced algorithms is currently being pieced together in Switzerland and consumption of their computers together with novel learning at all the businesses in our Group since 2015, as illustrated by the following: across the Group. Romande Energie’s Digital & Innovation support techniques. unit was invited to join a Western Switzerland-based think tank called CODE_IA, consisting of lawyers and AI engineers, to discuss and L&M table proposals in this field. Aba-24

1 2

2006 2014 2015 2016 2017

EFFITEC SA ROMANDE ENERGIE SA ROMANDE ENERGIE SA ROMANDE ENERGIE SA ROMANDE ENERGIE SERVICES SA 1 ROMANDE ENERGIE SERVICES SA RISK MANAGEMENT NETWORKS B USINESS UNIT2

The principles of the risk management policy are established by the The Finance and Audit Committee issues recommendations to Board of Directors. The Management Committee has responsibility the Board of Directors concerning these two reports. Financial for controlling risk in accordance with this policy. The Risk risks, including those related to the energy portfolio, are managed Management department ensures the policy is implemented in day- using limits. to-day operations and submits half-yearly reports to the Executive Operational risks are monitored and tracked individually to reduce Board and annual reports to the Board of Directors, or more their probability of occurrence and mitigate their severity should they regularly, where risk trends so require. Risks are identified and materialise. These risks are measured using expert assessments catalogued jointly by the Board of Directors, the Executive Board, by specialists as well as historical data. the various departments and the Risk Management team. Specific risks related to energy management are handled by a special purpose committee that usually meets once a month and submits a quarterly report to the Board of Directors.

32 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 33 CORPORATE GOVERNANCE 3

34 Romande Energie Group 2020 Annual Report Corporate governance at Romande Energie is guided by the core values Group organisational structure of transparency and fairness as we seek to build trust among all our As at 31 December 2020 stakeholders. Our principles of corporate governance aim to sustain profitability in the long run while safeguarding the interests of our Chairman of the Board of Directors shareholders, customers and business partners. Guy Mustaki

Strategy and Corporate Development Committee

1 GROUP STRUCTURE AND SHAREHOLDERS Guy Mustaki GOVERNANCECORPORATE

Appointments and The Group’s main business activities are the generation, distribution in 1901 as Compagnie Vaudoise des Forces Motrices des lacs Remuneration Committee and marketing of electrical and thermal energy, together with energy de Joux et de l’, listed from the outset on the Lausanne Anne Bobillier services. Stock Exchange. Adjusted for shares held in treasury, its market capitalisation amounted to CHF 1,160 million as at 31 December Finance and Audit Committee 1.1.1 Operational structure of Romande Energie Group 2020. Romande Energie Holding SA has no operational activi- Stéphane Gard As at 31 December 2020, the operational structure of Romande ties and is the only Group company that has shares listed on Energie Group comprised three business units: Networks, Energy the stock exchange. The list of companies that are consolidated Solutions and Romande Energy Services, supported by three by Romande Energie Holding SA as at 31 December 2020 is Chief Executive Officer

support units: Finance & Services, Human Resources and Digital shown in Note 24 to the consolidated financial statements, on Christian Petit 1 & Innovation. The diagram opposite illustrates the Group’s orga- page 99 of this report. nisational structure.

1.1.2-Legal structure of Romande Energie Group 3 1.1.3 Internal Audit Romande Energie Holding SA, with its head office at rue de Lausanne 53, 1110 Morges, Switzerland, is the ultimate holding company of Romande Energie Group. Its securities are listed on the SIX Swiss Exchange in Zurich under security number SUPPORT UNITS 2.560.733 and ISIN code CH 0025607331. It was established Human Resources Finance & Services Jean-Daniel Habegger 1 Nicolas Conne 1

Digital & Innovation Philippe Durr 1

BUSINESS UNITS

Networks Energy Solutions Romande Energie Services Patrick Bertschy 1 Christian Frère 1 Oliviero Iubatti 2

Romande Energie Group fulfils the statutory and regulatory provisions on corporate governance applicable in Switzerland. This report complies with the terms of the Directive on Information relating to Corporate Governance, issued by SIX Exchange Regulation on 20 June 2019, and uses the numbering system thereof. Additionally, it takes into account the Swiss Code of Best Practice for Corporate Governance 1 Member of the Executive Board (2016 edition). Supplementary information is contained in the Remuneration Report (see page 62 and following pages). Unless otherwise 2 Member of the Executive Board until 30 June 2020 stated, the information contained herein relates to the situation as at 31 December 2020. 3 Internal Audit reports to the Finance and Audit Committee but is managed by the Finance & Services support unit

36 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 37 Group legal structure As at 31 December 2020 ROMANDE ENERGIE HOLDING SA

80% 100% 73.93% 3.86% ROMANDE ENERGIE ROMANDE ENERGIE Bas-Valais Energie SA 71.99% ROMANDE ENERGIE SA SERVICES SA COMMERCE SA Effitec SA 100% 33.33% GOVERNANCECORPORATE

enersuisse SA HYDRO Exploitation SA 7.6%

EnergeÔ SA 25% 11.04% AFCO Forces Motrices 1.51% 100% 27.98% Tayo SA 20% Management SA de l’Avançon SA

Demierre Forces Motrices 100% 36% 31% DransEnergie SA 50.01% DransGrid SA 49.99% Deschenaux SA du Gd-St-Bernard SA

Centrale Thermique 100% 50% VO RE-Nouvelable SA 50% VO énergies holding SA 9.53% de Gland SA

Romande Energie 100% Frigo Service SA 85.67% CEVM – Vallon de Morgins REF Hydro SAS 100% 100% France SAS

Société Centrale 60% Eoliennes de Provence SA 95% MBR SA 33,33 % hydroélectrique de Bar SAS

60% Arnon Energie SA REF Eolien SAS 100% neo technologies SA 48.88%

Energie Renouvelable 51% Calycé 2 SAS 100% Spontis SA 40% de l’Avançon SA

100% Eole de Piroy SARL 29.71% EOS Holding SA* SITEL SA 33.34% 100% Eole de la Joux SARL 100% Eole des Charmes SARL Forces Motrices 41.14% 100% Eole des Muids SARL B-Valgrid SA 8% Hongrin-Léman SA 100% Eole des Pinceaux SAS Energies Nouvelles 100% Eole des Vignottes SAS 35% Energie Solaire SA 34% Vionnaz SA 100% Eole du Barrois SAS 50% Calycé Rive Droite SAS 25% St-Gingolph Energia SA 50% Eole du Châtelier SAS SIRESO 3.12% 50% Eole d'Opale SAS 50% Eole du Génois SAS 40% Agrogaz SA Cadcime SA 21.99% 50% Eole de Fradier SAS 50% Eole de Saint Sébastien SAS Energie Renouvelable Forces Motrices 35% 50% Eole du Filaos SAS 20.6% SA de Sembrancher SA

Société Électrique Souffle d’Espoir SAS 100% 1.05% Intercommunale de la Côte SA

Les Mâts d'Eole SAS 80% AGEPP SA 15.74%

Groupement solaire Société Electrique des 36.63% Cestas 2 SAS 51% Forces de l’Aubonne SA

100% Centrale Solaire Constantin 7 SAS ThermorésÒ SA 40% 100% Centrale Solaire Constantin 8 SAS 100% Centrale Solaire Constantin 9 SAS Equity interest exceeding 50% * EOS Holding SA has a 33.33% interest 100% Centrale Solaire Constantin 10 SAS Equity interest equal to or less than 50% in Alpiq Holding SA

38 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 39 ROMANDE ENERGIE HOLDING SA ROMANDE ENERGIE SA ROMANDE ENERGIE COMMERCE SA ROMANDE ENERGIE SERVICES SA Top holding company of Romande Energie Group, Group’s operating company. Conventional hydroelectric Joint venture. Designs and installs heat pumps, shares of which are listed on the SIX Swiss Exchange power generation, other types of electricity and Markets power and manages customer bases thermal solar and PV solutions as well as in Zurich. Owns equity interests, heat production; owns and manages power and of partner distribution system operators (DSO); district heating, ventilation, climate control, real property and intellectual heating networks; manages energy portfolios provides marketing and sales services home automation, telecommunications, property rights and provides services to Group companies to Group companies IT and street lighting as well as marketing thermal energy

FORCES MOTRICES DE L’AVANÇON SA REF EOLIEN SAS SOCIÉTÉ DES FORCES MOTRICES

AFCO MANAGEMENT SA CALYCÉ 2 SAS DRANSGRID SA GOVERNANCECORPORATE DU GRAND-ST-BERNARD SA Plans, manages and conducts all types of Simplified company limited by shares under Owns and operates distribution grids in the Owns and manages distribution grids; owns Simplified company limited by shares under construction work and providing technical French law. Develops wind farms in France, Dranse region and operates La Peuffeyre-Sublin and French law. Holds interests in wind farms in Owns hydropower facilities on the Toules- services. Handles property development; held either partly or fully by the following com- Benjamine hydropower facilities Ploudalmézeau (Finistère) and Pluzunet Pallazuit lake (VS) property sales; project development and panies, each owning one wind-farm project: EFFITEC SA (Côtes d’Armor) FORCES MOTRICES DE SEMBRANCHER SA SOCIÉTÉ ELECTRIQUE INTERCOMMUNALE management • Eole de Piroy Sàrl Audits indoor electrical installations REF HYDRO SA DE LA CÔTE SA • Eole de la Joux Sàrl Owns hydropower facilities on the Dranse river AGEPP SA • Eole des Charmes Sàrl ENERGÉÔ SA Simplified company limited by shares under Owns and operates distribution grids; mar- • Eole des Muids Sàrl FORCES MOTRICES HONGRIN-LÉMAN SA Develops geothermal drilling projects, in French law. Owns a hydropower installations kets electricity and heating, indoor installa- • Eole des Pinceaux SAS Joint venture. Developing a deep geother- in Ubaye (Alpes-de-Haute-Provence) and particular in the Lavey area; operates geo- Owns pump-turbine facilities in Hongrin- tions and multimedia services • Eole des Vignottes SAS mal project in Vinzel. six hydropower installations in Burgundy, the thermal sources, most notably supplying the Veytaux • Eole du Barrois SAS Ardennes and the south of France SPONTIS SA Lavey spa; generates power and supplies ENERGIES NOUVELLES VIONNAZ SA • Calycé Rive Droite SAS heating to various customers FRIGO SERVICE SA Joint venture between Romande Energie, • Eole du Châtelier SAS Builds and operates the Vionnaz hydro- ROMANDE ENERGIE FRANCE SAS Groupe E and Lausanne City Council. • Eole d'Opale SAS power plant (with turbines fed by Avançon Sells, installs and provides services for AGROGAZ LIGNEROLLE SA Simplified company limited by shares under Provides standardisation, supply chain and • Eole du Génois SAS mountain river) and designs, builds and industrial refrigeration Owns power plant fuelled by wet biomass French law. Owns and acquires interests in logistics services for business partners • Eole de Fradier SAS operates green power installations GROUPEMENT SOLAIRE CESTAS 2 SAS companies generating power from renewa- • Eole de Saint Sébastien SAS ALPIQ HOLDING SA ble energy sources in France ST-GINGOLPH ENERGIA SA • Eole du Filaos SAS ENERGIE RENOUVELABLE Simplified company limited by shares under Operates turbines on St-Gingolph drink- Founded in 2008 from the merger between DE L’AVANCON SA French law. Holds interests in the following SIRESO SOCIÉTÉ D’INVESTISSEMENT DE Atel and EOS combined with EDF’s Swiss CADCIME SA ing-water network Builds and operates hydropower plant, solar power companies: SUISSE OCCIDENTALE SA assets. Generates power in Switzerland and Owns and operates district heating system • Centrale solaire Constantin 7 SAS in the locality of Le Glarey (with turbines fed Owns, manages and holds equity interests TAYO SA abroad; trades and markets energy; pro- • Centrale solaire Constantin 8 SAS by Avançon mountain river); develops a full in Swiss energy companies on behalf of vides energy services CENTRALE THERMIQUE DE GLAND SA • Centrale solaire Constantin 9 SAS Digital products and services, particularly in range of green power operations Western Switzerland, whereby it directly or • Centrale solaire Constantin 10 SAS the property sector in Switzerland and ARNON ENERGIE SA Operates a thermal energy plant indirectly represents the primarily public ENERGIE RENOUVELABLE VOUVRY SA abroad interests of the cantons of Geneva, Vaud, Active in the construction and operation of HYDRO EXPLOITATION SA CEVM COMPAGNIE ENERGÉTIQUE DU Owns Le Fossau hydropower facilities Fribourg, Valais, Neuchâtel and Jura and the Arnon Hydroelectric power plant; devel- THERMORÉSÔ SA VALLON DE MORGINS Offers maintenance services for hydropower their municipalities oping a full range of renewable energy ser- ENERGIE SOLAIRE SA installations Wholesale and retail marketing in Produces, distributes and markets energy vices SITEL SA Switzerland of thermal energy and other generated from waste wood and timber Solar thermal solutions and climate panels LE SOUFFLE D’ESPOIR SAS fluids (gas and other energies, telecommu- Company controlled by upc cablecom Sàrl. B-VALGRID SA nications, etc.) from renewable sources, in DEMIERRE DESCHENAUX SA ENERSUISSE SA Generates electricity from wind power Owns TV, internet and multimedia networks Owns and operates the high-voltage distri- particular from geothermal energy sites; Operates electrical, electronic and telecom- bution grid in the Lower Valais region Provides full range of CRM services LES MÂTS D’EOLE SAS SOCIÉTÉ CENTRALE HYDROÉLECTRIQUE marketing of renewable energy services munications installations; performs techno- DE BAR SAS BAS-VALAIS ENERGIE SA logical upgrades and a full range of control EOLIENNES DE PROVENCE SA Generates electricity from wind power VO ÉNERGIES HOLDING SA and conformity upgrade tasks in the fields Simplified company limited by shares under Formed in June 2012 through the merger Partnership with Zurich City Council (ewz, Owns and operates distribution grids and of electricity, electrical engineering, telecom- MBR SA French law. Hydropower concession located between Société Electrique du Bas-Valais the city’s energy provider). Developing a hydropower facilities on the Jougnenaz and munications and lighting. Joint venture set up by municipalities of in Massif Central region SA and Société Electrique de Champéry – wind farm in the Provence municipality in the Orbe rivers; markets electricity, natural-gas and Bex to harness hydropower Val-d’Illiez SA. Owns distribution grids and DRANSENERGIE SA canton of Vaud distribution pipelines, indoor electrical instal- from the Rhône. Construction of a hydropower SOCIÉTÉ ELECTRIQUE DES FORCES hydropower facilities on the Tanay-Vouvry lations and multimedia services dam and operation of related installations DE L’AUBONNE SA lake Offers maintenance services for hydropower EOS HOLDING SA installations and distribution grids. Provides Owns and operates distribution grids and VO RE-NOUVELABLE SA Manages interest in Alpiq. Owns interests in NEO TECHNOLOGIES SA services to outside parties wind-power and solar-power operations in hydropower facilities on the Aubonne river; Joint-venture with VOénergies holding SA. France, Germany and Portugal IT services provider owned jointly by markets electricity, indoor electrical installa- Owns and develops production installations Romande Energie, Lausanne City Council tions and multimedia services powered by novel sources of renewable and the municipality of Lutry energy

40 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 41 1.2 Significant shareholders 1.3 Cross-shareholdings 2.6.1 Limitations on transferability and nominee registration 2.6.2 Reasons for granting exceptions in the year under review 2.6.4 Vaud Canton, Banque Cantonale Vaudoise, 119 Vaud munici- Romande Energie Holding SA has no knowledge of cross-sha- The following rules apply: – Admissibility of nominee registrations – Procedure and palities and SIE SA (Service intercommunal de l’électricité) are reholdings exceeding 5% of the capital or all shares with voting • There are no transfer restrictions on registered shares conditions for cancelling privileges under the Articles of bound by a shareholders’ agreement giving them a pre-emption rights on both sides. It does not own shares in its significant • Natural persons and legal entities are registered with no limi- Association and limitations on transferability right on each other’s shares. Together these shareholders hold shareholders, namely Groupe E SA (Fribourg) and Banque tation on voting rights The Articles of Association do not contain any specific provisions 55.33% of the capital and total voting rights. Cantonale Vaudoise (Lausanne). Nor is there any cross-repre- • Nominee registrations carry no voting rights concerning these points. As at 31 December 2020, the significant shareholders sentation on the boards of directors of listed companies. It • General authorisations for registration are accepted entered in the share register of Romande Energie Holding SA should however be stated that Romande Energie SA, a sub- • The Company does not print registration applications 2.7 Convertible bonds and options were as follows: sidiary of Romande Energie Holding SA, owns a 29.71% inte- • The Company no longer prints paper certificates Romande Energie Holding SA has not issued any convertible rest in EOS Holding SA, which in turn owns 33.3% of Alpiq • Nominee SIS (NS): no entry in the share register bonds or options. as at 31 Dec. 2020 Holding SA. Guy Mustaki, Chairman of the Board of Directors • AREG-data compatible (electronic transmission) Vaud Canton* 440 047 shares* 38.60 % of Romande Energie Holding SA, also chairs the Board of The Articles of Association have been amended to comply with Romande Energie Holding SA Directors of EOS Holding SA. Stéphane Gard, a member of the the requirements of the Federal Act on Intermediated Securities, GOVERNANCECORPORATE Morges 113 685 shares 9.97 % Board of Directors of Romande Energie Holding SA, is also a which entered into force early in 2010. Groupe E SA, Fribourg 71 899 shares 6.31 % member of the Board of Directors of EOS Holding SA. Jean- Credit Suisse Investment Foundation SA, Zurich 45 247 shares 3.97 % Yves Pidoux, a member of the Board of Directors of Romande Movements in shareholders’ equity Legal Voluntary Reserve Total Share General retained retained for own Own Retained shareholders’ Banque Cantonale Vaudoise*/ ***, Energie Holding SA, also sits on the boards of EOS Holding Lausanne 34 731 shares 3.05 % CHF thousands capital reserve earnings earnings shares shares earnings equity SA and Alpiq Holding SA, representing Lausanne City Council. Lausanne City Council* 34 454 shares 3.02 % Equity as at 1 January 2018 28 500 5 859 986 289 -94 113 926 535 Christian Petit, CEO of Romande Energie Holding SA, is a Other shareholders*/** 399 937 shares 35.08 % Net profit 60 043 60 043 Total 1 140 000 shares 100.00 % member of the Board of Directors of EOS Holding. Dividend paid -37 125 -37 125 Equity as at 31 December 2018 28 500 5 859 1 009 207 -94 113 949 453 * Parties to an agreement providing for reciprocal pre-emption rights ** Of which 180,869 shares covered by reciprocal pre-emption rights Net profit 19 212 19 212 under the shareholders’ agreement Dividend paid -37 125 -37 125 *** Of which 9,900 shares covered by reciprocal pre-emption rights under Transactions on treasury shares and other 23 842 23 842 the shareholders’ agreement Equity as at 31 December 2019 28 500 5 859 991 293 -70 271 955 381 No disclosures relating to shareholdings were made in the year Net profit 17 476 17 476 under review. Any publications can be viewed on the website of Dividend paid -37 910 -37 910 the body responsible for such announcements: Treasury share transactions and other -29 253 -29 253 Equity as at 31 December 2020 28 500 - 5 859 970 859 - -99 524 - 905 694 https://www.six-exchange-regulation.com/en/home/publications/ significant-shareholders.html. 3 BOARD OF DIRECTORS

The Board of Directors of Romande Energie Holding SA, which acts concurrently as the Board of Directors of Romande Energie SA, sets out the Group’s strategy and has ultimate authority for ensuring this strategy is executed. It also has ultimate responsibility for overseeing management of the Group. Under its by-laws (Organisational Regulations),1 it has also set up three board committees. 2 OWNERSHIP STRUCTURE 3.1 Members of the Board of Directors The Board of Directors comprises nine members. All Board members are Swiss citizens. They have not performed any operational 2.1 Capital management role within the companies of Romande Energie Group at any time in the past three years. Furthermore, they have no The ordinary share capital of Romande Energie Holding SA cated by the Annual General Meeting as it sees fit subject to the close business ties with any of these companies. amounts to CHF 28.5 million and is divided into 1,140,000 provisions of Article 24 of the Articles of Association, which partly Expiry of registered shares with a nominal value of CHF 25 each. incorporate Article 671 of the Swiss Code of Obligations, accor- Name Year of birth Since term of office Functions Committee appointments Romande Energie Holding SA has no conditional nor authorised ding to which: Guy Mustaki * 1960 2005 2022 Chairman Chairman, Strategy and Corporate Development Committee capital. “1 5% of the profit for the financial year are allocated to the general Anne Bobillier ** 1965 2016 2021 Vice-Chair Chairwoman, Appointments and Remuneration Committee reserve until the reserve reaches 20% of the share capital. Stéphane Gard ** 1965 2020 2021 Director Chairman, Finance and Audit Committee 2.2 Authorised capital 2 The following items may also be allocated to this reserve even Paola Ghillani * 1963 2009 2022 Director Member, Finance and Audit Committee The provision in the Articles of Association relating to authorised if it has reached the statutory limit: Elina Leimgruber * 1968 2017 2022 Director Member, Appointments and Remuneration Committee capital was removed by decision of shareholders at the Annual Jean-Jacques Miauton ** 1951 1997 2021 Director Member, Strategy and Corporate Development Committee 1. after payment of issuance costs, the proceeds from the General Meeting of 29 May 2018. Jean-Yves Pidoux * 1956 2007 2022 Director Member, Appointments and Compensation Committee issuance of shares issued that exceed the nominal value, Alphonse-Marie Veuthey ** 1965 2011 2021 Director Member, Finance and Audit Committee 2.3 Changes in capital during the past three years inasmuch as they are not allocated to write-downs or to François Vuille * 1970 2019 2022 Director Member, Strategy and Corporate Development Committee None. pensions; Term expired in 2020 2. the balance of the payments made on cancelled shares, less 2.4- Shares, participation and dividend-right certificates Wolfgang Martz ** 1954 2003 2020 Vice-Chairman Chairman, Appointments and Compensation Committee 2.5 the loss that would have been incurred on shares issued in The share capital consists solely of registered shares. All shares Bernard Grobéty ** 1950 2002 2020 Director Member, Finance and Audit Committee their stead.” are vested with the same ownership and voting rights. There are 2 As Romande Energie Holding SA is a holding company, Article * Director appointed by the Vaud cantonal government (Articles 762 of the Swiss Code of Obligations and 16 of Articles of Association) no restrictions on the transferability of shares. The Company has The cantonal government has the power to decide when their terms of office should end 671(2) point 3 and Article 671(3) of the Swiss Code of Obligations ** Director elected by the Annual General Meeting no liabilities in regard to participation and dividend-right certifi- do not apply. 1 Organisational Regulations (art. 5.1 ss): https://investor.romande-energie.ch/about-us/governance.aspx?sc_lang=fr-FR cates, or concerning convertible bonds. Net profit may be allo- 2 Articles of Association: https://investor.romande-energie.ch/about-us/governance.aspx?sc_lang=fr-FR

42 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 43 3.1-3.2 Education, career, other activities and vested interests As at 31 December 2020 CORPORATE GOVERNANCECORPORATE

GUY MUSTAKI * ANNE BOBILLIER STÉPHANE GARD PAOLA GHILLANI * ELINA LEIMGRUBER * JEAN-JACQUES MIAUTON CHAIRMAN VICE-CHAIRWOMAN DIRECTOR DIRECTOR DIRECTOR DIRECTOR

Doctorate in law from University of MSc Computer Science, Geneva MBA, HEC (Lausanne) MSc Pharmacy from University of Lausanne; Commercial and management training Business education, Lausanne; admitted to the bar University, and business administration Swiss certified accountant degree in International General Management Swiss citizen specialising in steelworks in Italy. Swiss citizen diploma from CRPM, an in-service Swiss citizen for Executives from IMD; degree from the Swiss citizen Career experience training college International Programme for Board Career experience Career experience • 1995-2001, deputy head of the Africa Career experience Swiss/French citizen Management at IMD, Digital Transformation • Career: from 1991, practising barrister • 1988-1996, KPMG Switzerland, Audit Zone within the administration and • Until 2008, general manager of Miauton for Boards programme at IMD and professor at University of Lausanne Career experience • 1996-1998, KPMG USA, Consulting finance department of the International and CRH Gétaz Holding groups Swiss/Italian citizen (commercial law, company law and • 1988-2001, various management • 1999-2014, Partner KPMG, Audit & Committee of the Red Cross (Geneva) • Since 2008, director and general corporate governance) positions within IBM Consulting, in particular responsible for Career experience • 2001-2002, operations manager for manager of Swiss Madeness Solutions • 2001-2002, CEO of Ascom Autelca AG KPMG in French-speaking Switzerland • Began at Ciba/Novartis before joining events at Expo.02, Neuchâtel Arteplage Group SA (La Chaux-de-Fonds) Offices held at non-listed companies: • 2002-2018, general manager of Bechtle (2001-2014), member of the Executive other multinational companies • 2003, project coordinator for the World • Chairman of the boards of directors of Offices held at non-listed companies: Steffen Suisse SA, Geneva Board and Board of Directors • CEO, Max Havelaar Foundation, Electronic Media Forum (WEMF) (Geneva) EOS Holding SA (Lausanne), Yteqam • Member of the boards of directors • 2019-2020, Corporate Project Manager (2012-2014) of KPMG Switzerland Switzerland • 2004-2008, director of Genèveroule SA, (Lausanne) and DR Invest SA of Romande Energie Commerce SA at Bechtle Management SA, Rotkreuz • 2014-2018, CFO, Sicpa, • Board member of the FLO International (Geneva) (Lausanne) (Morges), Swiss Madeness Solutions an industrial security firm (Prilly) (Fairtrade Labelling Organisations), • 2009-2011, reception and events manager • Vice-chairman of de Rham SA Offices held at non-listed companies: Group SA (La Chaux-de-Fonds), • Since 2019, director and independent Chairwoman from 2001 to 2005 at the Alimentarium food museum (Vevey) (Lausanne) • Member of the boards of directors of Maison Planzer Transports SA (Satigny), consultant (M&A, governance and • 2005, incorporated as Paola Ghillani • July 2011 to June 2016, member of the Skyguide (Geneva), SkySoft-ATM Giovanna Holding SA (Chailly, Offices held at other legal entities: finance) & Friends SA Vevey local council (Geneva), Raiffeisen Switzerland until 30 June 2020), Patrimoine • Board member of the Foundation for the • Since July 2016, of Vevey (until 30 Sept. 2020), (St Gallen), Offices held at non-listed companies: Offices held at non-listed companies: Gérance SA (Neuchâtel) and Centre for Corporate Law (CEDIDAC) at Rolex Holding SA (Geneva) and • Member of the Board of Directors • Chairwoman of the Board of Directors Offices held at non-listed companies: (Covedis SA), Lausanne University of Lausanne Rolex SA (Geneva) of EOS Holding SA (Lausanne) of Paola Ghillani & Friends SA, Zurich • Member of the Board of Directors of (Chavannes-près-Renens) • Committee member of • Board member of the Vaud cantonal • Member of the boards of directors of VMCV SA (Clarens) • Board member of the Théodora SwissBoardForum, pension fund (Lausanne) the Migros-Genossenschafts-Bund/ • Member of the Board of Directors of Foundation (Lonay) • Member of the Board of Directors Fédération des coopératives Migros MVR SA (Montreux) • Board member of the Chassot et Guex Offices held at other legal entities: of Nice & Green SA () (Zurich) and Transitec Ingénieurs- • Member of Management Committee of Foundation for Medical Ethics • Member of the board of the Franco- • Member of the Board of Directors Conseils SA (Lausanne) SIGE (Vevey) (Lausanne) Swiss Chamber of Commerce and of Alteris Léman SA (Nyon) • Chairwoman of Zürcher Kantonalbank Industry (Geneva) Offices held at other legal entities: Other activities: advisory committees on sustainable • Member of the SwissBoardForum, Bern Other activities: • Chairwoman of the Vevey Ville d’Images • Member of advisory committee for investment funds (Zurich) • Founder and manager of Gard Foundation ACAD, a training centre for company & Partners SA (Lutry) Offices held at other legal entities: • Chairwoman of Revelation Prod, an NGO directors (Lausanne) • Honorary member of the International • Vice-Chair of Promove, a pro-business Committee of the Red Cross – ICRC body for the Riviera and Lavaux zones (Geneva) • Board member of Vevey Arts and Events • Board member of the Chênes Foundation and the Eglantines Foundation (Vandœuvres) and Aquatis Foundation (Vevey), and the Comtesse Foundation (Lausanne) Andrée d’Etchegoyen Foundation (Montreux)

44 Romande Energie Group 2020 Annual Report * Appointed by the Vaud cantonal government Romande Energie Group 2020 Annual Report 45 ACKNOWLEDGEMENTS

The Board of Directors would like to thank Bernard Grobéty and Wolfgang Martz, outgoing directors, for their contribution to the Board’s work since 2002 and 2003, respectively. Both have demonstrated a remarkable commitment to the Group over the years. Not only did they make a major contribution by unsparingly providing the benefit of their expertise and skills in a wide range of fields, but they were also much appreciated as colleagues.

We would also like to express our warmest gratitude to Daniel Hammer, who stepped down as Company Secretary

on 29 February 2020, and Valentine Maire, Acting Company Secretary between 1 March and 31 July 2020. GOVERNANCECORPORATE

JEAN-YVES PIDOUX * ALPHONSE-MARIE VEUTHEY FRANÇOIS VUILLE* CARINE MAALOUF DIRECTOR DIRECTOR DIRECTOR BOARD SECRETARY (NON-MEMBER)

PhD Sociology and Anthropology, Law degree from Fribourg University; MSc Physics, PhD Astrophysics and MSc Law degree from the University University of Lausanne (UNIL) admitted to the bar and licensed Energy Engineering of Fribourg, Diploma in Business Swiss citizen as a notary Swiss citizen Administration (IFCAM), training Swiss citizen in anti-money laundering Career experience Career experience Swiss citizen • Until 2006, associate professor at the Career experience • 1999-2000, post-doctorate in applied UNlL Faculty of Social and Political • Since 1994, barrister optics, Federal Institute of Technology Sciences • Since 1995, notary Lausanne (EPFL) • 2002-2016, member of Vaud cantonal • 2000-2001, executive director of the Offices held at non-listed companies: parliament International Academy of Sports • Chairman of the Board of Directors • 1996-2006, local councillor in Lausanne Science and Technology (AISTS) of Bas-Valais Energie SA (Vouvry) • Since 2006, member of Lausanne City • 2001-2005, senior consultant in • Committee member for the Chablais Council and responsible for the city’s transport, risks and energy, Geste Region (Aigle) public utilities department Engineering • Member of the boards of directors • 2005-2014, managing consultant in Offices held at non-listed companies: of Romande Energie Commerce SA energy, E4tech • Chairman of the boards of directors of (Morges) and Santé SA • 2010-2015, member of the Board of Boisy TV SA (Lausanne), SI-REN SA (Rennaz) Directors of Alternative Bank (Lausanne), LFO SA (Lausanne) and • Committee member for the Switzerland AGEPP SA (Lavey-Morcles) Riviera-Chablais Hospital (Rennaz) • 2015-2019, executive director of the • Vice-Chairman of the Board of Directors Offices held at other legal entities: Energy Centre, Federal Institute of of Alpiq Holding SA (Lausanne) • Member of the Fondation André Manzini Technology Lausanne (EPFL) • Member of the Boards of Directors (Aigle), the Riviera-Chablais Hospital • Since 2019, head of the Energy of EOS Holding SA (Lausanne), benevolent foundation (Rennaz), Department at Vaud Canton Gaznat SA (Vevey), Epura SA the Fondation Divisionnaire F. K. Rünzi (Lausanne), Cadouest SA (Prilly), Offices held at non-listed companies: Offices held at other legal entities: (Crans-Montana), the Fondation Forces Motrices de l'Aboyeu SA • Member of the Board of Directors of • Member of the Scientific Council of AEE Chablais Scope (Aigle) and the Radio (Collonges), Petrosvibri SA (Vevey) Société Electrique des Forces de Suisse (Bern) Chablais association (Monthey) and Transports Publics de la Région l'Aubonne SA (Aubonne), Société des • Member of the Strategic Committee Lausannoise SA (Renens) Other activities: Forces Motrices de l'Avançon SA (Bex), of the Solar Impulse Foundation • Chancellor of State for the Monthey Société des Forces Motrices Hongrin- (Lausanne) Offices held at other legal entities: district Léman SA (Château-d'Oex) and • Member of the Innovation Committee • Director of the cantonal insurance member of the Executive Committee of of Swisspower AG institution (Pully); board member of Cleantech Alps (Sion) • Founder and partner of Proxipel; founder the Foundation for Dramatic Arts and and President of Softcar SA; founder the Lausanne Chamber Orchestra and President of Tilt Global (US)

46 Romande Energie Group 2020 Annual Report * Appointed by the Vaud cantonal government Romande Energie Group 2020 Annual Report 47 3.3 Number of offices permitted (Article 12 (1) point 1 of Swiss 3.4 Elections and terms of office Strategy and Corporate Development Committee It has decision-making authority in the following areas: Federal Ordinance on Excessive Pay) Pursuant to Articles 762 of the Swiss Code of Obligations and The Committee consists of the Chairman of the Board and two 1. Appraising the expertise, independence and services of the Pursuant to Article 22a(1) of the Articles of Association,3 mem- 16 of the Articles of Association, five of the nine members of other members. Meetings are normally held six to eight times statutory auditors, and management of their appointment bers of the Board of Directors may each hold the following other the Board of Directors are appointed by the Vaud cantonal a year (eight times in 2020), and are chaired by the Chairman 2. Clarifying differences of opinion between the Management offices in the management and supervisory bodies of legal government, two of whom represent shareholding municipali- of the Board. Meetings last for four hours on average. The Committee and the statutory auditors in respect of the entities, which have to be registered in the Swiss commercial ties. The Vaud cantonal government is responsible for determi- Committee is responsible for providing the Board with recom- financial statements register or a comparable foreign register: ning the expiry date of their terms. mendations and opinions on the following strategic issues: 3. Approving the internal audit programme 1. no more than 5 offices as a member of a board of directors The other four members of the Board are elected individually • Economic climate, legal and regulatory conditions and It also has the terms of reference and authority conferred or as a member of a supreme governing or supervisory body by shareholders at the Annual General Meeting for a term of developments in energy markets upon it by the by-laws and Annex 2 pertaining thereto.* of companies considered as publicly traded companies, as one year, expiring after the conclusion of the following Annual • Corporate strategy, business strategy, information defined by Article 727(1) point 1 of the Swiss Code of General Meeting. These directors may be re-elected. However, technology (IT) strategy and developments, strategic In 2020, the Finance and Audit Committee examined Obligations; directors reaching the age of 70 in the calendar year in which targets and key performance indicators, and strategic amendments to the Articles of Association of Romande Energie 2. no more than 15 offices as a member of a board of directors the election takes place are no longer eligible for re-election. action plans Holding, which were approved by shareholders at the Annual GOVERNANCECORPORATE or member of a supreme governing or supervisory body of In addition, the Articles of Association contain no clauses • Corporate development General Meeting on 19 May 2020. It monitored the Group’s companies not considered as publicly traded companies deviating from the statutory provisions on the appointment of • Cooperation and strategic partnerships equity investments and developments in legislation affecting within the meaning of the Swiss Code of Obligations and the the Chair, members of the committee overseeing remuneration • Strategic acquisitions regulated and non-regulated sectors. The Committee also Federal Act on Collective Investment Schemes; and the independent proxy. • Shareholder base reviewed the tasks assigned to the statutory auditors and 3. no more than 10 offices as a member of the board of directors • Relations with cantonal authorities and the municipalities approved amendments to the Group’s audit charter. or member of a supreme governing or supervisory body of 3.5 Internal organisational structure served other legal entities not precisely meeting the above criteria. General considerations • Any other business that the Board may wish to assign to it Appointments and Remuneration Committee The Board of Directors meets for half-day sessions, usually at The Committee has three members and usually meets six to The restrictions stated in Article 22a(1) of the Articles of least five times a year. In 2020, the Board of Directors met ten In 2020, the Strategy and Corporate Development eight times a year (nine times in 2020). Meetings last for two Association do not apply in relation to legal entities controlled times for sessions lasting approximately four hours. In addition, Committee analysed the case for selling 2,000 HREN shares hours on average. In contrast, a half-day session was devoted directly or indirectly by the Company or which control the a seminar was held over one and a half days. Short meetings held in treasury and buying the 28,772 HREN shares held to the process – run jointly by the Committee and the Board of Company. Neither do they apply in relation to legal entities were also called, one to to discuss the replacement of Christian by Holdigaz SA. The 2018-2023 strategy and the ‘Défi 3V’ Directors – for selecting a new director to replace Christian which are the occupational pension funds covering the Budry and another to discuss the executive structure. Last year, project (aiming to save CHF 17-21 million by the end of 2020) Budry, who passed away in January 2020. employees of the Company or companies that it controls directly the Board monitored business trends, reviewed legal and regu- were central to the Committee’s deliberations. Other important The Committee is responsible for providing the Board with or indirectly. Furthermore, offices held in several non-Group latory developments, deliberated on strategy and looked into points were capital investments in renewable generation assets, recommendations and opinions on the following issues: legal entities among which there is direct or indirect control, or possible additional generation and procurement options to new business development and acquisitions. It also oversaw • Composition of the Board of Directors and Board Committees within occupational pension funds covering the employees of extend the Group’s existing capabilities. It also examined pos- establishment of the alliance between Romande Energie France • Oversight of rules in relation to effective corporate governance these companies, only count as one office within the meaning sible strategic alliances, energy management and the develop- and Calycé, to develop wind farms in France. • Code of conduct and business ethics of paragraph 1. ment of new lines of business. • Corporate governance and remuneration reports Members of the Board of Directors have a very good Finance and Audit Committee • Appointment of members of the Board of Directors and its attendance record at the meetings of both the Board and the The Committee has three members and usually meets six to Chair, members of Committees and their chairs, the Company committees of which they are members. Under the by-laws, eight times a year (eight times in 2020). Meetings last for three Secretary, the Group’s representatives on the boards of each Committee of the Board of Directors is given its own terms hours on average. The Committee is responsible for providing directors of Romande Energie SA, Romande Energie of reference, tasks and responsibilities. The Committees have the Board with recommendations and opinions on the following Commerce SA and EOS Holding SA, as well as the non- no decision-making powers (see exceptions hereinafter under issues: Group member(s) for Romande Energie Services SA Finance and Audit Committee, Appointments and Remuneration • Financial statements and the Annual Report • Appointment of the Chief Executive Officer and Executive Committee and under the special decision-making remit). They • The budget and medium-term financial plan Board members meet several times a year, depending on the matters at hand • Selection and dismissal of the statutory auditors • Remuneration scheme for members of the Board of Directors and opinions required by the Board. Committee members • Cash-flow management, financing and contingent liabilities and individual remuneration in regard to the latter, based on receive the necessary documents in good time for them to • Fundamental tax issues the maximum aggregate amount of remuneration approved prepare for deliberations. Committee meetings are attended • Notification to the competent court in the event of by shareholders at the Annual General Meeting by the CEO, relevant heads of department and, as needed, over-indebtedness • Pay scheme for members of the Executive Board and in-house or external experts who are called in to advise on • Internal control employees particular points. • Management of business and energy risks • Proposal (to the Board of Directors for submission at the • By-laws Annual General Meeting) of the maximum aggregate amount • Compliance of remuneration payable to the Board of Directors and the • Principles for implementation of stock exchange disclosure Executive Board in the coming financial year rules (ad hoc publicity and directors’ dealings) • Amendment of the Articles of Association in relation to the • Articles of Association, except provisions relating to remuneration policy for members of the Board of Directors remuneration for members of the Board of Directors and and the Executive Board the Executive Board • Relations with pension funds • Internal audit reports • Any other business that the Board may wish to assign to it

3 Articles of Association: https://investor.romande-energie.ch/about-us/governance.aspx?sc_lang=fr-FR * Organisational Regulations: https://investor.romande-energie.ch/about-us/governance.aspx ?sc_lang=fr-FR

48 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 49 Additionally, the Committee’s remit is to determine the 3.7 Information and control mechanisms with regard 4 MANAGEMENT COMMITTEE individual remuneration of the Chief Executive Officer and to the Executive Board members of the Executive Board, based on the maximum The Board of Directors is informed of current business trends aggregate amount of remuneration approved by shareholders at every meeting. Particular attention is paid each quarter to the The Management Committee comprises the members of the Executive Board. In principle, it meets every week, for half-day sessions. at the Annual General Meeting. It must also approve the total consolidated financial statements and the financial results and Every year, it holds three to five days of seminars devoted to current issues. payroll for the coming year in preparation for negotiations profit projections for the Group’s business units. At least once between labour and management, subject to the establishment a year, the financial statements are accompanied by a detailed of personnel expenses by the Board of Directors in connection projection of estimated annual results. Reporting on sharehol- 4.1 Members of the Management Committee with the annual budget. dings, which presents trends in businesses and companies in The Executive Board, whose members are appointed by the Board of Directors, consists of the following people: It also has the powers and authority conferred upon it by the which Romande Energie Group has financial interests, together by-laws and Annex 2 thereof.* with a risk management report covering all the Group’s activi- Name Position/Business unit Nationality Year of birth Member since In 2020, besides the process for selecting a new director ties, is also prepared by the Executive Board for the Board of Christian Petit CEO Swiss 1963 2019 to replace Christian Budry, the Committee also reviewed the Directors twice a year. Moreover, twice per year, the Board of Nicolas Conne CFO and Head of Services Swiss 1980 2019 GOVERNANCECORPORATE profile of the new director succeeding Jean-Jacques Miauton, Directors is given a progress report on strategic projects. Patrick Bertschy Head of Networks Swiss 1968 2014 whose appointment will be proposed at the Annual General The Executive Board submits its action plans to the Board of Philippe Durr Head of Digital & Innovation Swiss 1964 2013 Christian Frère Head of Energy Solutions Swiss 1959 2012 Meeting in 2021. It also conducted a self-assessment of the Directors. These documents are used by the Board of Directors Jean-Daniel Habegger Head of Human Resources Swiss 1965 2011 Board of Directors. to exercise its oversight, together with regular briefings on Oliviero Iubatti, CEO of Romande Energie Services SA, of Swiss nationality, born in 1972 and member of the Executive Board since 2016, the main projects undertaken by the Executive Board and on ceased to be a member of the Executive Board with effect from 30 June 2020. Special decision-making authority the Group’s business trends: revenues, margins by customer Mention should be made of special decision-making authority. segment, cash flow, capital investment, guarantees and So the Group may rapidly seize any opportunities that arise, the sureties, risks and workforce numbers. 4.2 Education, career, other activities and lobbying roles The restrictions of Article 22a(2) of the Articles of Association chairs of the three Committees have been granted authority to In addition to risk management, Romande Energie Holding SA None of the executives act as consultants for key lobbies in do not apply in relation to legal entities that are controlled make decisions about the acquisition of strategic business has an internal audit function. The latter is organised according to Switzerland or abroad. None of them worked for the Group or directly or indirectly by the Company or which control the assets or equity interests, provided that the outlay does not an internal audit charter based on international standards as set any of its companies before their current duties. The careers Company. Neither do they apply in relation to legal entities exceed CHF 10 million. These transactions may not exceed the forth by the Institute of Internal Auditors. Internal audit reports and appointments of Management Committee members are which are the occupational pension funds covering the sum of CHF 30 million per calendar year. This special decision- directly to the Finance and Audit Committee, which is a Board of presented on pages 52-54. employees of the Company or companies that it controls directly making authority was not exercised in 2020. Directors committee, and is fully independent from the Executive or indirectly. Furthermore, multiple offices held in several Board. Internal audits are regularly conducted with the help of 4.3 Number of offices permitted (Article 12(1) point 1 outside legal entities among which there is direct or indirect 3.6 Division of responsibility between the external specialists who are not the statutory auditors. of Swiss Federal Ordinance on Excessive Pay) control, or within occupational pension funds covering the Board of Directors and Executive Board The Board of Directors is kept regularly informed of the Pursuant to Article 22a(2) of the Articles of Association,** employees of these companies, only count as one office within The Board of Directors exercises the non-transferable and Group’s business developments and receives reports at each members of the Executive Board, with the agreement of the the meaning of Article 22a(2). inalienable duties set out under Article 716a of the Swiss Code of its meetings. Board of Directors, may each hold the following other offices in of Obligations. It defines corporate strategy and strategic tar- The minutes of Management Committee meetings are the management and supervisory bodies of legal entities which 4.4 Management contracts gets, establishes the annual budget and medium-term financial submitted to the Chairman and Vice-Chairman of the Board are required to be registered in the Swiss commercial register Romande Energie Holding SA has not entered into any roadmap, determines financial policy, defines risk policy – par- of Directors. or a comparable foreign register: management contracts. ticularly with respect to the wholesale energy sales and pur- A daily press review is sent to each member of the Board 1. No more than 2 offices as a member of a board of directors or chases – and is responsible for establishing or disposing of of Directors. as a member of a supreme governing or supervisory body of subsidiaries and for buying and selling of material sharehol- A description of the risk management procedures adopted companies considered as publicly traded companies, as defi- dings. Pursuant to Articles 716b of the Swiss Code of can be found on page 32 of this report. ned by Article 727(1) point 1 of the Swiss Code of Obligations. Obligations and 17 of the Articles of Association, the Board of 2. No more than 15 offices as a member of a board of directors Directors has delegated management of the Group to the Chief or member of a supreme governing or supervisory body of Executive Officer (CEO) under the terms of the by-laws. The companies not considered as publicly traded companies CEO is responsible for organising and exercising the powers of within the meaning of the Swiss Code of Obligations and the the Executive Board, in particular: making recommendations Federal Act on Collective Investment Schemes. on strategy; executing the business strategy and implementing 3. No more than 10 offices as a member of the board of directors plans and projects; defining missions; managing the Company; or member of a supreme governing or supervisory body of achieving the objectives, profitability and expansion of the other legal entities not meeting the above criteria. Company’s business, and enhancing its reputation; preparing operating, investment and cash budgets; hiring employees and setting remuneration; representing the Company in its dealings with third parties; and organising the flow of information within and outside the Company. The CEO chairs the Management Committee. The Chairman of the Board of Directors and the CEO maintain close contact with one another in order to coordinate their actions and review current business trends.

* Organisational Regulations: https://investor.romande-energie.ch/about-us/governance.aspx ?sc_lang=fr-FR ** Articles of Association: https ://investor.romande-energie.ch/about-us/governance.aspx ?sc_lang=fr-FR

50 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 51 CHRISTIAN PETIT PATRICK BERTSCHY CEO HEAD OF NETWORKS, DEPUTY CEO

Economist, MBA from ESSEC (Ecole Supérieure des Sciences Economiques MSc Electrical Engineering, HEIA, Fribourg et Commerciales), Cergy Pontoise, France Executive MBA, HEG, Fribourg Program for Executive Development (PED), Leadership, IMD, Lausanne Executive Certificate in Advanced Management, HEC, Paris Swiss/French citizen Swiss citizen

Career experience Career experience • 2000-2017, Swisscom, including 10 years in group management, • 1996-2000, project engineer and project manager at ABB first as head of residential then business customers • 2000-2001, technical director at Glas Troesch • 2017-2019, independent directorships • 2001-2006, in charge of energy customers,

• Since 1 July 2019, CEO of Romande Energie then head of sales at Gruyère Energie SA (Bulle) GOVERNANCECORPORATE

• 2006-2014, head of public utilities, Morat GOUVERNEMENT D’ENTREPRISE Offices held at non-listed companies: • 2014-2016, head of the energy services business unit of • Chairman of the Board of Directors of Romande Energie Services SA Romande Energie SA (Morges) and the Board of Directors of Romande Energie Commerce SA, Morges • From 1 April 2016, head of the Networks business unit of Romande Energie SA • Member of the Board of Directors of EOS Holding SA, Lausanne • Director, Bas-Valais Energie SA, Vouvry Offices held at non-listed companies: • Chairman of the boards of directors of Forces Motrices de l’Avançon SA (Bex), Spontis SA (Avenches) and SIRESO SA (Granges-Paccot) • Member of boards of directors of Bas-Valais Energie SA (Vouvry), B-Valgrid SA (Sion) and AGEPP SA (Lavey-Morcles) • Committee member of RegioGrid (Aarau)

NICOLAS CONNE PHILIPPE DURR CFO AND HEAD OF SERVICES HEAD OF DIGITAL & INNOVATION

Foundations for Business Leadership (FBL), IMD, Lausanne Master’s degree in microtechnology from the Swiss Federal Institute of Technology Swiss certified accountant (EPFL, Lausanne); executive management training from the European Institute of MSc Management, HEC (University of Lausanne) Business Administration (INSEAD), Fontainebleau, and IMD (Lausanne) Swiss citizen Swiss citizen

Career experience Career experience • 2003-2008, banking industry auditor, Ernst & Young SA, Geneva • Began career as a consultant and manager at Andersen Consulting (Accenture) • 2008-2013, internal and management controller, • 1995-2000, head of marketing at Landis & Gyr Communications supervisor of quality assurance unit, DSR Group • 2000-2008, sales director and member of senior management at Geneva public utilities • 2013-2019, head of accounting and risk management, • 2008-2010, general manager of Mistral Engines (CH/USA), an aviation company Romande Energie (interim CFO from 2017 to 2019) • 2011-2012, independent consultant – closely involved in the roll-out of electric mobility • Since 2019, CFO of Romande Energie solutions in Western Switzerland • 2013-2020, head of Romande Energie Commerce SA (Morges) Offices held at non-listed companies: • From 1 January 2020, Head of the Digital & Innovation support unit, • Member of the boards of directors of Romande Energie Services SA (Morges), Romande Energie SA Romande Energie Commerce SA (Morges), Bas-Valais Energie SA (Vouvry), Energie Solaire SA (Sierre), Spontis SA (Avenches) Offices held at non-listed companies: • Member of the boards of directors of neo technologies SA (Lausanne), enersuisse SA Offices held at other legal entities: (Dietikon), SEFA SA (Aubonne) and Romande Energie Commerce SA (Morges) • Head of the Investment Committee and board member of the Fondation de Prévoyance Romande Energie (Morges) Other activities: • Vice-president of the Crans-près-Céligny local council

52 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 53 CHRISTIAN FRÈRE HEAD OF ENERGY SOLUTIONS, ROMANDE ENERGIE SA CHANGES

MSc Physics, University of Essen, Germany; PhD, Natural Sciences Swiss, French and German citizen CHANGE TO COMPANY SECRETARY’S ROLE IN 2020 IMPORTANT CHANGES AFTER 31 DECEMBER 2020

Career experience After Daniel Hammer announced his departure in December Jean-Daniel Habegger, Head of Human Resources and • From 1989, various positions in industry as advisor and chief project engineer, 2019, analysis was carried out to identify the synergies that member of the Executive Board, has been appointed Group notably at Rheinmetall (Düsseldorf) and RWE (Essen) could be achieved by combining some of these tasks with Social Inclusion & Diversity Officer. He will continue to over- • 1998-2003, member of senior management, then general manager of Von Roll some operations by the Finance Department such as risk see his department until a successor can be appointed. Environnement management, management of holdings and M&A. Based on • 2004-2005, independent consultant its findings, a decision was made to reorganise the Company Philippe Durr, Head of Digital & Innovation and member of

• 2005-2012, head of business development and investment in power generation Secretary’s role. This resulted in the establishment of a new the Executive Board until 31 December 2020, on 1 January GOVERNANCECORPORATE and transmission facilities in Switzerland and abroad for EGL (Dietikon), Compliance and M&A team within the Finance & Services 2021 became Partnership & Alliance Officer. Christian Petit, seconded to various subsidiaries or associates of EGL Group Department. It comprises the responsibilities of the former CEO will head up the Digital & Innovation support unit on an • From 2012, head of the Energy business unit – Energy Solutions from 2019 – Company Secretary’s office and the above-mentioned remits interim basis. at Romande Energie SA (Morges) of the Finance & Services Department. The role of board secretary is therefore managed by this new team. Offices held at non-listed companies: • Chairman of Romande Energie France SAS (Paris) and Centrale Hydroélectrique de Bar SAS (Paris) • Vice-Chairman of Romande Energie Services SA (Préverenges) • Member of the boards of directors of Forces Motrices Hongrin-Léman SA (Château- d’Oex), MBR SA (Massongex), EnergéÔ SA (Vinzel) and Hydro Exploitation SA (Sion) • Executive officer, Bas-Valais Energie SA, Vouvry • Executive officer, Romande Energie Commerce SA, Morges

JEAN-DANIEL HABEGGER HEAD OF HUMAN RESOURCES Irène Roduit, a general Carine Maalouf, a corporate In January 2021 the Group welcomed Aurore Amaudruz barrister specialising in tax lawyer, joined Ms Roduit’s and Guillaume Fuchs, joint heads of the Energy Solutions Swiss VET certificate for business employees; degree in human resources management; law, has been Group Head new team on 1 August 2020 business units and members of the Executive Board. They advanced training in HR management at CRQP; business administration course at of Compliance and M&A as board secretary and legal are taking over from Christian Frère, who will leave the Centre Romand de Promotion du Management – CRPM since 1 July 2020. consultant. Group on 30 April 2021, after helping his successors during Swiss citizen their first months with the Group. Career experience • 1984, Société Romande d’Electricité (SRE) • From 1997, various positions in the Romande Energie HR department (personnel administration, head of recruitment and internal mobility) • 2002-2011, HR delegate and deputy Group human resources manager • From 1 December 2011, head of Human Resources

Offices held at non-listed companies: • Member of the Board of Directors of Forces Motrices de l’Avançon SA (Bex)

Offices held at other legal entities: • Chairman of Fondation de Prévoyance de Romande Energie and Fonds de prévoyance complémentaire de Romande Energie (Morges, basic and supplementary pension funds) • Committee member of CIFER industry training centre

54 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 55 5 REMUNERATION, SHAREHOLDINGS AND LOANS 8 STATUTORY AUDITOR

Please refer to Chapter 4, Remuneration Report, page 62. 8.1 Duration of the contract and term of office of the lead 8.4 Oversight and control of the statutory auditor auditor See Finance and Audit Committee, Section 3.5. The Annual General Meeting of shareholders in 2016 selected The Finance and Audit Committee annually checks the Deloitte SA, in Lausanne, as the new statutory auditor. The services, fees and independence of the statutory auditors and lead auditor is Fabien Bryois. As required by law, no lead reports this information to the Board of Directors. The auditors’ 6 SHAREHOLDERS’ PARTICIPATION auditor may be appointed for more than seven years. work is totally independent of the Board of Directors and the The selection and replacement of the auditors is the Executive Board. The Finance and Audit Committee assesses responsibility of the Board of Directors, upon advice from the the quality of reporting and the audit reports, the proposed audit 6.1 Voting-right and representation restrictions 6.3 Notice of Annual General Meetings

Finance and Audit Committee, following a periodic invitation approach and its implementation, concentrating on coverage of GOVERNANCECORPORATE All shares entitle the holder to one vote. There are no restrictions By law, one or several shareholders representing together no to tender. The auditors must hold all the relevant professional material risks, recommendations, timeframes and resources. It on voting rights. less than 5% of the share capital may also request a general qualification required to audit a listed company and have the also meets with the individuals performing the work to ensure Pursuant to Article 12(4 and 5) of the Articles of Association, meeting of shareholders to be called. The Annual General required resources to fulfil their mission. they have the requisite expertise. Specifically, it compares a shareholder may be represented by the independent proxy Meeting is called by giving notice in the Swiss Official Gazette the fees budgeted and invoiced by the statutory auditors and or a third party. of Commerce, at least 20 days prior to the appointed date, and 8.2-Audit fees and additional fees vets any additional services. Focusing on independence, it In 2010, the Articles of Association were amended to by sending invitations to shareholders entered in the share 8.3 The fees charged by Deloitte SA are as follows: checks the advisory services commissioned from the statutory comply with the Federal Act on Intermediated Securities, register. Prior notice is published approximately three months auditors (scope and fees). The Board of Directors previously which entered into force on 1 January 2010. before the date of the meeting. CHF ruled that extra support services would not be bought in for The Articles of Association contain no clauses deviating Audit of financial statements 330 256 Non-audit services 103 000 internal auditing purposes. from or supplementing the statutory provisions with regard 6.4 Inclusion of business on the agenda Total 433 256 The auditors receive all the documentation that is prepared to independent proxy instructions. Neither do they contain One or more shareholders representing shares with an for every meeting of the Finance and Audit Committee. In 2020, rules relating to participation in the Annual General Meeting aggregate nominal value of CHF 1 million or 5% of the share Audit services comprise the basic work required each year to the statutory auditors took part in two committee meetings. by electronic means. capital may request that an item of business be added to the audit the financial statements of individual Group companies Comments by the auditor are systematically submitted agenda. This request must be made to the Board of Directors and the consolidated financial statements of Romande Energie to the Finance and Audit Committee. The auditors’ work is 6.2 Quorum and majority voting requirements in writing no later than 30 days before the date of the meeting, Group. This includes the work performed by the auditors in totally independent of the Board of Directors and the Executive Shareholders at the Annual General Meeting pass resolutions indicating the purpose of the debates and the motions connection with pension plans and supervision of the Board. The auditors’ fees and services are also reviewed by and conduct elections by a simple majority of the voting rights submitted. implementation or updating of accounting methods. the Finance and Audit Committee, which submits a report cast. Abstentions and blank or spoilt votes are not taken into This work also covers examining this corporate governance to the Board of Directors. The auditors must possess all the consideration in the calculation of the majority. This does not 6.5 Entry in the share register chapter, reviewing the remuneration report and preparing relevant professional qualifications required for the audit of a apply to matters requiring two-thirds majority of the voting rights Shareholders must be registered in the share register no later auditors’ reports. listed company. They have the necessary resources available represented, pursuant to Article 704(1) of the Swiss Code of than eight to ten days before the appointed date in order to take With regard to Other advisory services, Romande Energie to fulfil their mission. Obligations. part in the Annual General Meeting or appoint a proxy. The commissioned two merger reports from Deloitte. Deloitte deadline is shown in the official notice of the meeting. was also appointed by Romande Energie and two non-Group partners for an organisational advisory project, beginning in 2019 and ending in 2020.

7 CHANGES OF CONTROL AND DEFENCE MEASURES

7.1 Duty to make an offer 7.2 Clauses on changes of control This is not covered by any clause in the Articles of Association.* This is not covered by any clause in the Articles of Association. There is no opt-out or opt-up clause. Vaud Canton, Banque Nor is there any agreement or programme benefiting the mem- Cantonale Vaudoise, 119 Vaud municipalities and SIE SA bers of the Board of Directors or the Executive Board in such (Service intercommunal de l’électricité) are bound by a sharehol- cases. The employment contract of the CEO can be terminated ders’ agreement providing for reciprocal pre-emption rights on by either party by giving one year’s notice as from the end of the each other’s shares. These shareholders hold 55.33% of the current month. The notice period for other Executive Board capital and total voting rights. members is six months as from the end of the current month.

* Articles of Association: https://investor.romande-energie.ch/about-us/governance.aspx?sc_lang=fr-FR

56 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 57 9 INFORMATION POLICY

Deloitte SA Romande Energie Group pursues a disclosure policy in keeping with A financial calendar containing the publication dates for the Rue Saint-Martin 7 its size and importance. The disclosures adopted are designed to annual and interim financial statements and the annual report, as 1003 Lausanne Suisse maintain public trust in the Company. Particular care is also taken well as the date of the press conference, is posted on the Group’s to ensure that executives are provided with timely, accurate infor- website early in the year. An events calendar for the current financial Phone: +41 (0)58 279 9200 mation to enable them to carry out their leadership responsibilities. year and contact addresses are shown on the penultimate page of Fax: +41 (0)58 279 9300 www.deloitte.ch Shareholders of Romande Energie Holding SA are kept informed of this report. the basic aspects of the Group’s business by the annual report, the half-yearly report and press releases. Sensitive data that may affect The following links can be used to subscribe to our Alert Service, the share price is disclosed on an ad hoc basis in accordance with where you can select the type of news you would like to receive: the relevant directives of SIX Swiss Exchange. GOVERNANCECORPORATE Report in relation to the Review of Corporate Governance Disclosures Information is compiled by the corporate communications and In French investor relations team. Information about the Group is also posted http://investor.romande-energie.ch/site-services/alert-service. on the internet at www.romande-energie.ch. aspx?sc_lang=fr-FR To the Board of Directors of Notices required pursuant to the Articles of Association are Romande Energie Holding SA, Morges published in the Swiss Official Gazette of Commerce; notices of the In English Annual General Meeting are sent personally to shareholders entered https://investor.romande-energie.ch/site-services/alert-service?sc_ You engaged us to review the corporate governance disclosures of Romande Energie Holding SA made in the share register. lang=en pursuant to the Corporate Governance Directive of the SIX Swiss Exchange for the year ended 31 December 2020. These disclosures are made in a separate section, on pages 36 to 58, of the annual report. The Board of directors is responsible for the content of these disclosures. Our responsibility is to issue a report based on our review.

10 ROMANDE ENERGIE GROUP DIRECTIVE ON THE FIGHT AGAINST CORRUPTION We conducted our review in accordance with the Swiss Auditing Standard 910 (SAS 910) “Engagements to Review”. This Standard requires that we plan and perform the review to obtain moderate assurance as to Romande Energie Group acts responsibly towards its customers, Giving or accepting reasonable gifts to or from public officials or whether the corporate governance disclosures are complete and free from material misstatement. A business partners, civil society and its employees. It strives to main- persons operating in the private sector is permitted, but care should review is limited primarily to inquiries of company personnel that participated in the preparation of the tain a climate of trust with its customers and business partners and be taken when giving or accepting gifts which could be perceived disclosures, to reviews of pertinent documents, and analytical procedures related to the corporate engage in free and fair competition, complying with the applicable as inappropriate or place the recipient under an obligation. Soliciting governance disclosures, and thus provides less assurance than an audit. In addition, we have requested a laws and regulations. gifts is forbidden. In particular, gifts include invitations to a meal, a representation letter. We have not performed an audit, and, accordingly, we do not express an audit Romande Energie Group has a zero-tolerance policy on corrup- show, or other forms of hospitality, in addition to presents. opinion. tion. The basic principles relating to this matter are set forth in the Whether or not a gift is permissible depends on the intention of Code of Business Conduct. the person offering it. If it is offered with the aim of influencing a Based on our review, nothing has come to our attention that causes us to believe that the corporate The has extended the notion of corruption decision or obtaining an advantage, this behaviour constitutes an governance disclosures are not complete or contain material misstatements. to employees of a private-sector company. If found guilty of this act of bribery. offence, not only they themselves but the company as well will be On the other hand, a reasonable gift offered with the intention of held responsible. Employees committing acts of corruption may also improving commercial relations or marking special occasions is not Deloitte SA be personally liable to serious criminal and civil penalties that may considered to be bribery. include substantial fines and even imprisonment. Consequently, an upper limit of CHF 200 has been set. The value Accordingly, the Board of Directors in early 2017 adopted the of a gift received from an outside party must therefore be below this Romande Energie Group Directive on the Fight against Bribery and amount. Gifts worth more must be turned down. Cash or gift vou- Fabien Bryois Jonathan Markus Corruption, which contains the associated basic principles. The chers may never be accepted. If in doubt, the employee or business Licensed Audit Expert Licensed Audit Expert Directive applies to all employees and business partners of partner should always consult their line manager. Auditor in-charge Romande Energie and must be provided to them at the start of the The Directive applies to all companies over which Romande employment or business relationship, and as often as necessary Energie Holding SA has majority control, either directly or Lausanne, 20 April 2021 thereafter. indirectly.

58 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 59 REMUNERATION REPORT 4 1 BOARD OF DIRECTORS 2 EXECUTIVE BOARD

1.1 Governance Remuneration is not set at any particular interval, and 2.1 Introduction a. Annual basic salary Pursuant to Article 21(3) point 2 of the Articles of Association*, no distinction is drawn between directors. Remuneration is The success of Romande Energie Group largely depends on The annual basic salary is the cornerstone of total remuneration the Board of Directors, acting upon the recommendation of the determined in keeping with Swiss private-sector standards. In the expertise and dedication of its employees. We aim to be a and serves as a reference for determining the variable salary. Appointments and Remuneration Committee, determines the this respect, the report by Ethos on the 200 companies making model employer, aiming to attract, retain and motivate the most Every year, the ARC examines the possibility of increasing the individual remuneration payable to the members of the Board up the Swiss Performance Index (SPI) is taken into account. talented employees at every level. total annual payroll on the basis of economic criteria and of Directors, bearing in mind the maximum aggregate Annual remuneration and attendance fees are as follows: The Group works to ensure that the remuneration policy fairly unchanged staff numbers. Executive Board members receive remuneration approved by shareholders at the Annual General considers the financial results of the Group and its constituent the same percentage increase as that granted to all the Group’s Annual remuneration and fees - CHF Meeting. Note that this maximum amount refers to the total undertakings and the dedication of its staff to producing employees. Adjustments are made depending on individuals’ Chairman 85 000 remuneration for the next financial year, in application of Article Vice-Chairman 37 500 successful results. job performance and interpersonal skills. REMUNERATION REPORTREMUNERATION 15 of the Articles of Association. Director 30 000 Chair of board committee, 2.2 Governance b. Variable salary in addition to basic remuneration 6 000 1.2 Under Article 15(1) point 2 of the Articles of Association,* the As with all Romande Energie eligible personnel, the variable Remuneration principles Attendance fees: The principles governing the remuneration of the Board of - Half day 1 200 Annual General Meeting must annually approve the amount that salary is determined by the achievement of individual and team Directors are laid down by Article 22c of the Articles of - Full day 1 800 the Board of Directors has set for the maximum aggregate targets. The level of performance therefore has a direct impact Association. Members of the Board of Directors receive a fixed remuneration payable to the Executive Board in the coming on variable salary. Individual and team targets are set and Board members receive an allowance of CHF 0.70 per kilometre annual allowance, which is not determined by the Group’s financial year. assigned coefficients at the start of the year, linked to the for the journey between their place of work or residence and financial results, and fees for attending meetings of the Board On the recommendations of the Appointments and implementation of corporate strategy. These targets are assessed the meeting venue. They also receive a fixed amount to defray of Directors and its committees, as well as outside or special Remuneration Committee (ARC), the Board of Directors at the end of the year, measuring the extent to which they have expenses. preparatory meetings. establishes the Group remuneration policy for the Executive been achieved. Barring extraordinary circumstances, the Directors’ bonuses are not paid, nor are shares or other Board, in keeping with the principles set out in Article 22d weighting of objectives is not reviewed. The target values for forms of profit-sharing allotted. of the Articles of Association. The ARC, which consists variable salaries are shown below. The level of performance may exclusively of non-executive directors, monitors application of affect these values as follows (as % of the annual basic salary): 1.3 Total remuneration the remuneration policy set, examines periodic proposals to Target Minimum Maximum In 2020, the remuneration, fixed allowances for expenses and social insurance costs for members of the Board of Directors were as follows: increase overall remuneration and determines the individual remuneration paid to Executive Board members, bearing in mind CEO 40 % 0% 48 % Other executives 30 % 0% 33% the maximum aggregate amount approved by shareholders at Total remuneration 2020 2019 the Annual General Meeting. Remuneration practices in other Remuneration Social Remuneration Social The variable salary is paid in cash in the month of April Total companies serve as a basis for comparison. The last full survey and fixed expense insurance Total and fixed insurance following the reference year. CHF allowances costs 2020 allowances costs 2019 was conducted in 2018, with remuneration benchmarked against The Appointments and Remuneration Committee, together Guy Mustaki Board Chair/SCDC chair1 131 800 11 227 143 027 133 000 11 237 144 237 a sample group of Western-Swiss companies operating in the 2 with the Chairman of the Board of Directors, assesses the Wolfgang Martz Board Vice-Chair/ARC chair 27 750 1 421 29 171 61 500 4 427 65 927 energy, banking, insurance and industrial sectors. Anne Bobillier Board Vice-Chair/ARC chair2 65 475 5 416 70 891 52 800 4 385 57 185 degree of achievement of objectives. No external consultants Christian Budry Director/FAC chair3 - - - 54 000 4 314 58 314 are used for this purpose. 2.3 Stéphane Gard Director/FAC chair3 45 000 3 763 48 763 - - - Remuneration principles Since 2010, overall remuneration has consisted of the Paola Ghillani Director 51 600 4 317 55 917 49 200 4 062 53 262 c. Profit-sharing Bernard Grobéty Director 29 900 725 30 625 63 600 3 218 66 818 following components: The share in Romande Energie Group profits allocated to all Elina Leimgruber Director 52 800 4 425 57 225 46 800 3 846 50 646 employees is determined every year by the Board of Directors Jean-Jacques Miauton Director 63 600 3 251 66 851 60 600 2 981 63 581 Components of overall remuneration Influence Jean-Yves Pidoux Director* 50 700 - 50 700 46 800 - 46 800 Profit-sharing based on Multi-year EBITDA and on the basis of EBITDA and the degree of achievement of the Group financial results corporate objectives Alphonse-Marie Veuthey Director 93 700 7 772 101 472 80 000 6 470 86 470 collective targets. The method of calculating the total amount François Vuille Director* 51 000 - 51 000 27 600 - 27 600 proposed applies provided that ordinary depreciation and Variable portion Performance relating Total 663 325 42 317 705 642 696 200 46 764 742 964 of compensation to personal targets amortisation are covered by EBITDA. In principle, there is no payment below this level, but the Board of Directors may decide 1 Strategy and Corporate Development Committee 3 Finance and Audit Committee otherwise. The profit-sharing amount payable to the members 2 Appointments and Remuneration Committee 4 Paid to Vaud Canton or the municipality represented Fixed portion of remuneration of the Executive Board falls within the following ranges (as % of annual basic salary): The above amounts include remuneration paid by Group subsidiary companies, i.e. in which the Group’s shareholding exceeds 50%.

The remuneration paid by third parties for offices held in associates (Group shareholdings of less than 50%) are not included in the Minimum Maximum above amounts. CEO 0 % 55 % Given that any transactions with directors in relation to products marketed by the Group are conducted at arm’s length, they are Other executives 0 % 37 % not included in the above amounts. At the Annual General Meeting of 28 May 2019, shareholders approved the maximum aggregate remuneration payable to the For profit-sharing to be seen from a long-term perspective, the 11 members of the Board of Directors, amounting to CHF 930,000 (CHF 820,000 in pay, a lump-sum allocation of CHF 60,000 to cover total amount generated by EBITDA for the reference year is sundry costs and CHF 50,000 in social insurance costs), for the period from 1 January 2020 to 31 December 2020. distributed as follows: two-thirds vests automatically; one-third * Articles of Association: https://investor.romande-energie.ch/~/media/Files/R/ is paid based on average EBITDA in the reference year and the Romande-Energie-IR/documents/french/romand-energie-holding-sa- two previous years (i.e. three years in total). This accounts for * Articles of Association: https://investor.romande-energie.ch/~/media/Files/R/Romande-Energie-IR/documents/french/romand-energie-holding-sa-statuts-2019.pdf statuts-2019.pdf

62 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 63 half the budget. The rest depends on the extent to which targets recommendation will be made to shareholders at the 2021 2.5 Other allowances 2.6 Retirement benefits have been achieved, based on an equal weighting of the Annual General Meeting to apply similar principles to the Entertainment expenses Members of the Executive Board join the Romande Energie following: Executive Board. Under this recommendation, the variable Entertainment expenses take the form of a fixed allowance of pension plan and receive benefits identical to those of other 1. Workplace health and safety salary of its members will change with effect from 1 July 2021. CHF 1,250 per member per month (CHF 1,500 for the CEO). In Romande Energie SA employees. There are no special benefits 2. Customer relations The individual performance-related portion will be cancelled return, members pay their recurrent out-of-pocket expenses them- such as top-hat schemes or purchases of additional insurance 3. Reduction in greenhouse gas emissions across the and each executive will receive up to CHF 50,000 (CEO selves up to an amount of CHF 50 per day (CHF 75 for the CEO). years. Group CHF 100,000) according to the Group’s financial results and The average rate of achievement these targets for 2020 achievement of its objectives. The previous variable salaries Company cars was 100%. cancelled by these recommendations would be folded into Members of the Executive Board are provided with a company The amount is paid in cash in the month of April following the basic salary, such that the overall amount payable to the car if they want one, and reimburse the company for any personal the reference year. Executive Board would not change. use of the vehicle. Those not availing themselves of a company Changes to the staff remuneration policy were introduced on car instead receive a fixed allowance. REMUNERATION REPORTREMUNERATION 1 January 2021 to provide a better fit with the corporate culture d. Summary and goals. Under the new approach to staff pay, the bonus The variable salary (letter b) and profit-sharing based on Group Allowances in connection with activities linked to individual performance targets has been replaced with results (letter c) together may not exceed 100% of the basic salary, on boards of directors additional fixed salary, with a standardised percentage bonus for the CEO, and 70% of the basic salary, for the other members All amounts (annual compensation and attendance fees) received now linked to the Group’s financial results and objectives. A of the Executive Board. by members in connection with directorships served representing Romande Energie are remitted in full to Romande Energie.

2.4 Total remuneration For 2020, total remuneration granted to members of the Executive Board, which comprised seven members, was as follows: 3 OTHER BENEFITS FOR MEMBERS OF THE BOARD OF DIRECTORS

Remuneration AND THE EXECUTIVE BOARD Variable Entertainment expenses + car Social Share ownership is as follows: As in previous years, no benefits in the form of shares, options, Individual Profit- Total Total allowance (if insurance additional fees, loans or other credit, repayment waivers, or other CHF Basic targets sharing variable remuneration applicable) costs Share ownership financial advantages or benefits in kind were granted to members of 2020 Shares held by Group companies the Board of Directors or the Executive Board or to parties closely Total remuneration 1 573 444 518 717 525 933 1 044 650 2 618 094 113 100 565 485 as at 31 Dec. 2020 113 685 shares 9.97% related to them in 2020. The municipality of Lausanne, where Jean- Highest remuneration: Other shareholders 1 026 315 shares 90.03 % Christian Petit, CEO 365 713 152 137 164 792 316 929 682 642 18 000 144 642 Yves Pidoux is a member of the executive, holds 34,454 shares. Of which: Total variable remuneration represented 86% of the basic salary for the CEO and 60% for the other members of the Executive Board. Christian Petit, CEO, owns ten shares. - Held by members of the Board of Directors 0 shares 0% - Held by members of the Executive Board 10 shares < 1 % 2019 Total remuneration 2 014 212 616 380 576 845 1 193 225 3 207 437 130 950 671 718 There were no management-level transaction in 2020 in which ten Highest remuneration: or more shares were purchased. Pierre-Alain Urech, CEO1 375 907 132 666 118 508 251 174 627 081 13 500 122 787 Christian Petit, CEO 231 418 85 167 88 264 173 431 404 849 11 900 83 599

Total variable remuneration represented 70% of the basic salary for the CEO and 55% for the other members of the Executive Board. 1 The remuneration of Pierre-Alain Urech corresponds to that received until 30 September, the date of his retirement. Remuneration for days of leave not taken is included under the basic salary.

Social insurance costs chiefly comprise state and occupational pension contributions. At the Annual General Meeting of 28 May 2019, shareholders approved the maximum remuneration payable to the seven members of the Executive Board, amounting to CHF 3,910,000 (CHF 3,080,000 in pay, CHF 660,000 in social insurance costs and CHF 170,000 in allowances), for the period from 1 January 2020 to 31 December 2020.

64 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 65 Deloitte SA Rue Saint-Martin 7 1003 Lausanne Suisse

Phone: +41 (0)58 279 9200 Fax: +41 (0)58 279 9300 www.deloitte.ch

Report of the statutory auditor on the remuneration report

To the General Meeting of

Romande Energie Holding SA, Morges REPORTREMUNERATION

We have audited the sections 1.3, 2.4 to 2.6 and 3 of the accompanying remuneration report of Romande Energie Holding SA for the year ended 31 December 2020 (pages 62 to 65).

Responsibility of the Board of Directors The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration report in accordance with Swiss law and the Ordinance against Excessive compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor's Responsibility Our responsibility is to express an opinion on the accompanying remuneration report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the remuneration report complies with Swiss law and articles 14 – 16 of the Ordinance. An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration report with regard to compensation, loans and credits in accordance with articles 14 – 16 of the Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the remuneration report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion In our opinion, the remuneration report for the year ended 31 December 2020 of Romande Energie Holding SA complies with Swiss law and articles 14 – 16 of the Ordinance.

Deloitte SA

Fabien Bryois Jonathan Markus Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Lausanne, 20 April 2021

66 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 67 FINANCIAL STATEMENTS 5

Main financial developments ROMANDE ENERGIE GROUP  Group revenues rose 9% to CHF 569m. FINANCIAL OVERVIEW  Operating profit was resilient despite the pandemic, with EBIT rising by 18% to CHF 77m partly thanks to a property sale

 Net profit totalled CHF 87m (+CHF 50m), reflecting strong combined profits from EOS Holding and Alpiq

Key consolidated figures  Capital expenditure increased to CHF 210m (+CHF 87m), fuelled by the wind-power alliance in France

and district heating in Switzerland STATEMENTS FINANCIAL as at 31 December 2020

In CHF thousands, unless otherwise stated 2020 2019 % restated Change Higher EBIT Firm grip on operating expenses INCOME STATEMENT Romande Energie Group generated an 18% increase in Personnel expenses increased by 3% as 68 new employees full-year EBIT to CHF 77m, compared with CHF 65m in 2019. Net revenues 569 292 522 236 9% joined Romande Energie Group in 2020. These new hires are This solid operating profit was achieved despite the atypical Gross profit 322 553 306 943 5% an embodiment of the Group’s growth strategy. They were business environment arising from the Covid-19 pandemic, primarily assigned to Energy Services and Networks teams. As % of net revenues 57% 59% which led to an estimated CHF 3m shortfall in energy services at 31 December 2020, the Group’s staff count for the first time Personnel expenses ( 116 583) ( 113 012) 3% EBIT. The EBIT figure was lifted by a non-recurring gain of exceeded the one thousand mark. Other operating expenses ( 56 970) ( 62 882) -9% CHF 18m from the sale of property at our Morges site. As an- The decrease in other operating expenses stemmed from EBITDA* 149 000 131 049 14% nounced previously, margins were impacted in 2020 by the prudent management of costs across the Group. Compared % of net revenues 26% 25% lower service charge per customer in the regulated market with the previous year, committed fixed costs decreased by 9% EBIT** 76 573 64 979 18% from 1 January 2020, cut from CHF 95 to CHF 75. Specifically, to CHF 57m. All in all, operating expenses edged down by % of net revenues 13% 12% this change to the Swiss regulations lowered EBIT by CHF 6m CHF 2m, which positively impacted Group EBIT. Share of profit from associates 23 186 ( 17 686) n/a relative to the previous year. Power tariffs were stable for our

Net profit for the year 86 720 36 430 138% customers despite the higher average supply cost for electric- Net profit boosted by EOSH and Alpiq results % of net revenues 15% 7% ity, which erased the shortfall from the lower service charge. The Group generated EBIT margin of 13% versus 12% in The share of profit from associates contributed generously to the bottom line in 2020, thanks to a profit of CHF 23m CASH FLOW STATEMENT 2019. Adjusted for the one-off items such as the property sale compared with a loss of CHF 18m in 2019. Alpiq’s return Net cash flow from operating activities 138 633 141 015 and the impact of the pandemic, EBIT for the year amounted to profitability (CHF 110m in 2020 versus CHF -268m in FINANCIAL REVIEW Purchase of property, plant and equipment, intangible assets to CHF 61m, which was 6% lower than in 2019. 2019) coupled with solid operating profit at EOS Holding and acquisition of subsidiaries and shareholdings in associates ( 181 133) ( 118 340) SA (CHF 34m) resulted in an aggregate contribution of Net cash flow used in financing activities ( 158 276) ( 17 524) Sharp increase in revenues CHF 20m to net profit in 2020. Revenues increased by 9%, or CHF 47m, to CHF 569m for the financial year. Aside from the property sale, a significant por- As a reminder, Romande Energie Group owns 29.71% of EOS

OTHER INFORMATION tion of this increase was attributable to higher revenues from Holding SA, which in turn owns a 33.33% stake in Alpiq Total dividend (proposed for 2020) per share (in CHF) 36 36 Energy Solutions, helped by higher sales volumes of forward following the change in the ownership structure and its Earnings per share (in CHF) 78 32 contracts in the wholesale market, acquisitions in France in the delisting in 2020. EOS Holding SA, representing Western Equity attributable to Romande Energie Holding SA shareholders 1 888 018 1 871 789 year under review and the expansion of district heating Switzerland, is a mainstay in clean-energy generation in % of total assets 83% 84% operations. Europe and invests heavily in non-traditional forms of renewa- ble energy. Its strategy dovetails with the Group’s vision to play Shareholders' equity per share (in CHF) 1 840 1 778 Starting from 2020, taxes collected on behalf of public author- a leading role in the energy transition without sacrificing returns Romande Energie Holding SA year-end share price (in CHF) 1 130 1 200 ities re-invoiced to customers are netted against purchases of for investors. Market capitalisation 1 159 736 1 263 522 energy, goods and services. In the consolidated financial Employees 1 022 954 statements for 2019 and previous years, these taxes were In 2020, the Group’s net profit more than doubled to CHF 87m, recognised under revenues. This change was made to reflecting solid EBIT and associates, as detailed above. Restatements are detailed in Note 2. enhance comparability of net revenue figures with other indus- try firms. Figures in the prior period have been restated, reduc- *EBITDA: earnings before interest, taxes, depreciation ing net revenues by CHF 71m. Purchases of energy, goods and amortisation and services were decreased by the same amount. This **EBIT: earnings before interest and taxes restatement has no impact on EBIT or net profit for the year.

This English version is based on the French original. In case of doubt the original French shall prevail.

70 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 71 Romande Energie Group 2020 Annual Report 71 70 Romande Energie Group 2020 Annual Report

Energy Solutions The Energy Solutions business unit spans the entire kWh Operating expenses rose by 15%, or CHF 7m, driven up by The power network and street lighting system for the munici- To encourage entrepreneurship, within Romande Energie and chain, operating through two divisions: generation and acquisitions in France and purchases of district heating instal- pality of Bussigny was integrated from 1 January 2020, follow- in society at large, the chief executive of Romande Energie power/heating distribution; and end-markets. lations during the year. These operating expenses directly ing an announcement in 2019. In 2020, the Group acquired the Services purchased a 20% stake in this unlisted public limited impacted EBIT, which fell sharply relative to the previous year In CHF thousands 2020 2019 % power network of Romanel-sur-Lausanne with effect from company (and business unit). The corporate goals are to (-35%) to CHF 20m. This was foreseen, especially considering restated Change 1 January 2021. Taken together, these newly integrated provide the necessary impetus to make market-share gains in the lower rate of return in the regulated market. businesses raise the prospect of strong growth in regulated this highly competitive industry, act with agility and stake out Net revenues 261 284 228 008 15% Amid the shift to clean energy and market deregulation, the activities. an independent future. Gross profit 95 422 92 969 3% reorganisation of the Energy Solutions business unit with effect In total, EBIT was up 3% at CHF 45m, lifted by business % of net revenues 37% 41% from 1 January 2020 placed the entire kWh value chain under development. Staff count at this business unit rose 4% to 386 Strong growth in Group capital expenditure -11% a single roof: from electricity and heat generation to supplying EBITDA 38 020 42 859 employees at year-end. Romande Energie Group’s finances remained in good shape % of net revenues 15% 19% end-customers. The Group is constantly striving to meet despite the halving of the net cash position relative to the customer expectations and for that reason has adopted an STATEMENTS FINANCIAL EBIT 19 749 30 295 -35% previous year. As at 31 December 2020, the Group had cash organisation focused on three segments: residential and Romande Energie Services % of net revenues 8% 13% and cash equivalents of CHF 104m and is thus in a strong individual homeowners; businesses; and public authorities and The Romande Energie Services business unit combines all Employees 58 71 services encouraging the shift to cleaner energy among house- position to meet both short- and long-term financial commit- property-industry partners. holds, businesses and local authorities. ments. This net cash position reflects repayment – in early Revenues at this business unit improved by 15% to CHF 261m Living up to its role as a responsible corporate partner in the July 2020 – of two borrowings totalling CHF 100m to compared with 2019. energy transition, Romande Energie is increasingly attentive to In CHF thousands 2020 2019 % CompenSwiss (the AVS/AHV equalisation fund) and the policy environmental issues. From 2021, customer energy plans in restated Change Sales of electricity forwards in the wholesale market totalled to mitigate the effects of negative interest rates. the regulated market will be sourced 100% in Switzerland and 447 GWh, on their own raising CHF 20m in additional revenue Net cash produced by operating activities in 2020 remained 100% from renewable energy. Net revenues 94 499 97 177 -3% but with an immaterial impact on margin. The continuation of 0% high, at CHF 139m. It has been rising steadily since 2014 and Gross profit 50 585 50 648 the acquisition-driven growth strategy in France in 2020 ena- % of net revenues 54% 52% increased in line with 2019. bled the Energy Solutions business unit to increase revenues Networks The Networks business unit builds, operates, maintains and EBITDA 1 512 3 110 -51% Business investment to develop networks and generation as- by CHF 7m. Revenues earned from thermal generation manages high, medium and low voltage installations for power % of net revenues 2% 3% sets using renewable energies rose by 10% to a record increased by CHF 8m, reflecting the transfer of the district distribution. It does the same for the Group's fibre-optic EBIT ( 368) 321 -215% CHF 124m. The Group also continued expanding, acquiring heating portfolio held by Romande Energie Services to Energy network. Most of this business is regulated, although non-mo- % of net revenues 0% 0% companies for a total amount of CHF 82m in 2020 (net of Solutions effective 1 July 2020. Across the Group, district heat- cash). nopoly services are also growing solidly. Employees 369 331 ing revenues grew by CHF 4m in 2020. The Group completed major acquisitions in France, most Power volumes supplied to regulated customers (chiefly In CHF thousands 2020 2019 % notably the acquisition of a shareholding in a first solar farm in households) rose by a marginal 7.3 GWh. Conversely, restated Change Total revenues fell by 3% relative to 2019 to CHF 94m. The early 2020, finalisation of plans to take over a network of small- volumes marketed to eligible customers fell by 3% (73 GWh), business shortfall caused by Covid-19 in the first half of 2020 Net revenues 235 582 224 238 5% scale hydropower installations towards the middle of the year, resulting in a figure far lower than budgeted at the start of the was only partly made up for in the second six months, despite Gross profit 184 013 174 506 5% and the acquisition of a portfolio comprising 16 wind-farm year. This was chiefly due to the pandemic, which produced a the speed of the recovery. Over the full year, the pandemic % of net revenues 78% 78% projects in the latter part of 2020, representing an installed FINANCIAL REVIEW CHF 3m revenue shortfall for this category – offset partially by caused a revenue shortfall of CHF 6m. Even so, gross profit EBITDA 90 828 87 998 3% potential capacity of 646 MW. Altogether, the Group invested selling energy on the wholesale market at a lower price. held steady at CHF 51m. % of net revenues 39% 39% CHF 210m compared with CHF 123m in 2019, marking an Broadly speaking, tariffs for 2020 were stable relative to the The business unit continued making inroads into various 3% annual increase of 71%. previous year. The expected increase in supply costs was EBIT 45 375 43 951 regions, in keeping with its growth strategy, making acquisi- % of net revenues 19% 20% In late 2020, Romande Energie Group and Holdigaz SA largely offset for end-customers in the regulated market by the tions in the cantons of Fribourg and Valais to strengthen local terminated their alliance, initiated in 2013, and unwound their drop in the service charge, from CHF 95 to CHF 75. This lower Employees 386 371 ties and offer its full range of services across Western cross-shareholdings in existence since that time. As a result, figure directly reduced EBIT in the Energy Solutions business Switzerland. The business unit grew organically, broadening the Group bought back 28,737 of its own shares, of which unit by CHF 6m. Revenues were up 5% relative to the previous year at its expertise, most notably in Technical Facility Management 2,000 actions were sold on to major shareholders and Power generation from the Group’s own facilities fell by 9% to CHF 236m. Of the CHF 11m revenue growth, some CHF 9m (TFM). It also scaled up its presence in Geneva and Valais. Its institutional investors. Factoring in the repayment of the above- 415 GWh, which was 46 GWh lower than in 2019. This was derived from higher grid usage fees, which do not generate year-end staff count was 369, compared with 331 at the end of mentioned borrowings and payment of the dividend in respect due to sparse rainfall in the spring and summer of 2020. additional profitability for the Group. Power tariffs for 2020 had previous year. The increase in hiring to fill positions in of 2019, net cash used by financing activities was negative at Offsetting this effect, energy costing an additional CHF 1m was already reflected some CHF 2m of this increment. The high-potential sectors reduced EBITDA by 1% relative in 2019 CHF -158m, compared with CHF -17m in 2019. purchased on the wholesale market. The increase recorded in remainder of the revenue growth stemmed chiefly from the amid the pandemic-driven decline in revenues. The transfer of

the cost of obtaining origin certificates reduced EBIT by expansion of existing lines of business and the stronger all district heating installations from this business unit to CHF 3m, although it should be noted that this amount will be regional position in Valais, following the opening of the Energy Solutions impacted both revenue and annual depreci- recouped in future tariff configurations. Martigny office, which is expected to boost EBIT from 2021 ation by around CHF 1m, resulting in a marginal impact on onwards. EBIT. The full-year negative effect of the pandemic can be quantified at CHF 3m at EBIT level. Although EBIT fell short of expectations, it was still a respectable figure, close to breakeven and similar to the previous year.

72 72 RomandeRomande Energie Energie Group Group 2020 2020 Annual Annual ReportReport RomandeRomande EnergieEnergie GroupGroup 20202020 AnnualAnnual ReportReport 73

No change to ordinary dividend Outlook Equity attributable to owners of Romande Energie Holding SA For 2021, Romande Energie Group expects a small dip in EBIT ROMANDE ENERGIE GROUP was stable at CHF 1.9bn as at 31 December 2020. The relative to 2020, barring non-recurring items and a further financial independence ratio was 83% at that date. impact from Covid-19. Romande Energie Group operates in a Encouraged by the strong balance sheet and promising out- highly unstable environment in terms of currency and energy CONSOLIDATED FINANCIAL look, the Board of Directors will seek approval from sharehold- markets or simply the economy in general. The pandemic and ers at the Annual General Meeting to pay an ordinary dividend its economic repercussions may therefore impact the Group’s of CHF 36 per share, unchanged from the previous year. This financial statements to an extent that is difficult to foresee. STATEMENTS dividend corresponds to a payout ratio of 43% in respect of the Regarding market liberalisation and implementation of the net profit for 2020 and a dividend yield of 3.2% based on the Energy Strategy 2050, the consultation exercise announced closing share price in 2020 (3.0% in 2019). for June 2021 on the new parliamentary bill consolidating the If this recommendation is adopted, a cash payment of Energy Act and the Energy Supply Act (under revision) is Consolidated income statement CHF 36.9m will be made in 2021, taking into account the expected to clarify the statutory framework in a yet-to-be- as at 31 December 2020 STATEMENTS FINANCIAL number of shares held by the Group in treasury. determined timeframe. On completion of the ongoing strategic review, the Group will In CHF thousands, except per share amounts Notes 2020 2019 make an announcement to the investor community later this Covid-19 pandemic restated The Group is convinced that it took the right measures during year concerning its future development priorities. the first wave of the pandemic and thereafter was able to prove Revenues 5 517 669 483 276 its resilience. Though material, the impact of Covid-19 on Other income 5 51 623 38 960 profits was contained and mostly affected the energy services sector. Romande Energie Group has the resources to weather Net revenues 569 292 522 236 the storm. Its finances are robust and it is financially independ- ent. Last but not least, it offers a vital service to householders Purchases of energy, goods and services 6 ( 246 739) ( 215 293) and businesses. Gross profit 322 553 306 943

Personnel expenses ( 116 583) ( 113 012) Other operating expenses ( 56 970) ( 62 882) EBITDA 149 000 131 049

Depreciation on property, plant and equipment 7 ( 66 862) ( 60 393) Amortisation of intangible assets 7 ( 5 565) ( 5 677) EBIT 76 573 64 979 FINANCIAL REVIEW FINANCIAL REVIEW Financial income 8 2 778 2 459 Financial expenses 8 ( 7 392) ( 3 870) Share of profit from associates 13 23 186 ( 17 686)

Profit before income tax 95 145 45 882

Income tax 9 ( 8 425) ( 9 452) Net profit 86 720 36 430

Attributable to: Owners of the parent 82 220 32 746 Non-controlling interests 4 500 3 684 86 720 36 430

Weighted average number of shares outstanding 1 054 914 1 032 808 Earnings per share (in CHF) 78 32

Dividend per share (proposed for 2020) 36 36

Restatements are detailed in Note 2. The accompanying notes form an integral part of the consoli- dated financial statements.

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Consolidated balance sheet Consolidated cash flow statement as at 31 December 2020 as at 31 December 2020

In CHF thousands Notes 31.12.2020 31.12.2019 In CHF thousands Notes 2020 2019 ASSETS Group net profit 86 720 36 430 Current assets Cash and cash equivalents 103 746 203 492 Non-cash items Securities and term deposits 35 550 101 166 - Income taxes 9 8 425 9 452 Trade accounts receivable 10 71 938 62 092 - Depreciation and impairment on property, plant and equipment 7 66 862 60 393 Current taxes receivable 2 350 8 298 - Amortisation and impairment on intangible assets 7 5 565 5 677

Prepaid expenses and accrued income 62 412 70 501 STATEMENTS FINANCIAL - Provisions 17 ( 601) ( 1 410) Other current assets 6 825 2 859 - Net profit from associates 13 ( 23 186) 17 686 Total current assets 282 821 448 408 - Net proceeds from disposal of non-current assets ( 16 056) ( 764) Non-current assets - Net result from fair-value adjustments 1 070 751 Property, plant and equipment 11 1 304 839 1 165 770 - Other financial income and expense 4 407 775 Intangible assets 12 109 107 14 538 - Other non-cash items 9 335 4 212 Investments in associates 13 523 074 500 626 Dividends received from associates 5 790 3 412 Other long-term financial assets 14 30 644 66 459 Interest received and other financial income 1 745 1 409 Assets from employer contribution reserves 15 24 788 24 788 Interest paid and other financial expense ( 6 943) ( 2 885) Total non-current assets 1 992 452 1 772 181 Income taxes paid ( 2 458) ( 4 918) Total assets 2 275 273 2 220 589 Cash flow before change in working capital 140 675 130 220 Change in receivables ( 3 359) 4 927 LIABILITIES AND SHAREHOLDERS' EQUITY Change in payables ( 849) ( 11 912) Current liabilities Change in prepaid expenses and accrued income ( 31 906) 24 847 Trade accounts payable 12 677 16 114 Change in accrued expenses and deferred income 34 072 ( 7 067) Accrued expenses and deferred income 84 514 80 116 Net cash flow from (used in) operating activities 138 633 141 015 Other short-term liabilities 18 385 3 539 Purchase of property, plant and equipment, and intangible assets 11, 12 ( 124 348) ( 112 853) Short-term portion of long-term borrowings 16 650 100 343 Disposal of property, plant and equipment 25 538 3 183 FINANCIAL REVIEW FINANCIAL REVIEW Current taxes payable 5 549 4 915 Acquisition of subsidiaries, net of cash ( 81 561) ( 9 039) Short-term provisions 17 2 678 516 Disposal of subsidiaries, net of cash 2 738 1 102 Total current liabilities 124 453 205 543 Acquisition of shareholdings in associates ( 3 500) ( 733) Proceeds from sale of investment securities and term deposits 65 616 32 244 Non-current liabilities Acquisition of other long-term financial assets ( 6 551) ( 1 000) Long-term borrowings 16 85 142 10 941 Disposal of other long-term financial assets 42 032 3 448 Deferred tax liabilities 132 301 101 103 Net cash flow from (used in) investing activities ( 80 036) ( 83 648) Long-term provisions 17 2 782 645 Income from change in subsidiaries controlling interest 1 419 - Total non-current liabilities 220 225 112 689 Repayment of borrowings ( 107 590) ( 4 979) Total liabilities 344 678 318 232 Proceeds from borrowings 18 505 1 670 Purchase/disposal of own shares ( 29 253) 25 839 Equity attributable to Romande Energie Holding SA shareholders Dividends paid to non-controlling interests ( 3 447) ( 2 929) Share capital 18 28 500 28 500 Dividends paid to owners of the parent ( 37 910) ( 37 125) Additional paid-in capital 13 111 13 111 Net cash flow from (used in) financing activities ( 158 276) ( 17 524) Retained earnings 1 945 970 1 900 488 Net effect of exchange variances on cash and cash equivalents ( 67) ( 93) Own shares ( 99 563) ( 70 310) Net change in cash and cash equivalents ( 99 746) 39 750 Total equity attributable to Romande Energie Holding SA shareholders 1 888 018 1 871 789 Non-controlling interests 42 577 30 568 Cash and cash equivalents at beginning of year 203 492 163 742 Total shareholders' equity 1 930 595 1 902 357 Cash and cash equivalents at end of year 103 746 203 492 Total liabilities and shareholders' equity 2 275 273 2 220 589 Variance ( 99 746) 39 750

The accompanying notes form an integral part of the financial The accompanying notes form an integral part of the financial statements. statements.

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Statement of changes in consolidated equity Notes to the consolidated financial statements as at 31 December 2020

NOTE 1 In CHF thousands Share Additional Retained Own Total Non- Total General information capital paid-in earnings shares shareholders' controlling equity capital equity interests Romande Energie Holding SA, a holding company Restatement of prior-year financial statements Balance at 1 January 2019 28 500 13 111 1 907 457 ( 94 090) 1 854 978 29 115 1 884 093 incorporated in Switzerland with its registered office in Morges, Starting from 31 December 2020, taxes collected on behalf of is the direct or indirect owner of all the companies belonging to public authorities re-invoiced to customers are netted against Change in shareholders' equity 2019 Romande Energie Group (the Group). The Group generates, purchases of energy, goods and services. Previously, these Dividends ( 37 125) ( 37 125) ( 2 929) ( 40 054) distributes and markets energy and provides energy services were recognised under net revenues. This change, which had

Change in own shares 2 059 23 780 25 839 25 839 via three business units. (see Note 4). no impact on the Group's net profit, was made to enhance STATEMENTS FINANCIAL Currency translation differences ( 1 098) ( 1 098) ( 21) ( 1 119) The Group’s consolidated financial statements for 2020 were comparability of net revenue figures with other industry firms. Goodwill adjustment ( 5 731) ( 5 731) ( 5 731) adopted by the Board of Directors of Romande Energie As a consequence, the figure in the preceding period has been Other changes 2 180 2 180 719 2 899 Holding SA on 20 April 2021. They will be submitted for restated to ensure comparability with the year under review. Net profit 32 746 32 746 3 684 36 430 shareholder approval at the Annual General Meeting The quantitativ e impact of this restatement is shown below: Balance at 31 December 2019 28 500 13 111 1 900 488 ( 70 310) 1 871 789 30 568 1 902 357 on 29 June 2021. In CHF thousands 2019 2019 % Change in shareholders' equity 2020 restated published Change Dividends (37 910) (37 910) (3 447) (41 357) NOTE 2 Change in own shares 8 (29 253) (29 245) (29 245) Net revenues 522 236 593 320 ( 71 084) Currency translation differences (980) (980) (222) (1 202) Summary of accounting policies Purchases of energy, goods and services ( 215 293) ( 286 377) 71 084 Goodwill adjustment (1 555) (1 555) (210) (1 765) Gross profit 306 943 306 943 - Change in controlling interest 3 699 3 699 11 388 15 087 Key accounting policies used in the preparation of the consol- Net profit 82 220 82 220 4 500 86 720 idated financial statements are described below or included in Net profit 36 430 36 430 -

Balance at 31 December 2020 28 500 13 111 1 945 970 ( 99 563) 1 888 018 42 577 1 930 595 the corresponding notes. Unless otherwise stated, these policies have been applied consistently to all the figures Change in accounting policies The accompanying notes form an integral part of the financial shown. No changes to Swiss GAAP FER were published or statements. announced during the year under review. There was no Basis of presentation change in accounting policy relative to the prior year. The consolidated financial statements are presented in CHF thousands and have been prepared under the historical Consolidation procedure cost convention, with the exception of some types of long-term The closing date for individual financial statements every year FINANCIAL REVIEW financial assets and financial instruments, which are measured is 31 December. at fair value. They comply with the Accounting and Reporting Recommendations of Swiss GAAP FER in their entirety and Subsidiaries the standards for presenting financial statements outlined The consolidated financial statements comprise the operations

below. The financial statements have been prepared to provide of Romande Energie Holding SA and those of directly and a true and fair view, in accordance with the core principles of indirectly owned subsidiaries through which the Group has a Swiss GAAP FER. claim on returns from its equity interest, and where the Group is able to influence such returns through its control. Outright Estimates and judgements control corresponds to the authority, exercised directly or indirectly, to govern the operating and financial policies of The preparation of financial statements under Swiss GAAP an entity so as to obtain benefits from its activities. Generally FER involves estimates and assumptions affecting the speaking, this is linked to the direct and indirect holding of reported amounts of assets and liabilities and disclosure of voting rights in excess of 50%. Subsidiaries are consolidated contingent assets and liabilities at the balance sheet date, and from the date on which control is transferred to the Group, and income and expense amounts for the period. Although are excluded from the scope of consolidation as soon as such estimates are based on the best knowledge available to control ceases. management regarding the Group’s present position and All intercompany balances, transactions and profits are future operations, actual results may differ from what has been eliminated on consolidation. anticipated. Non-controlling interests in shareholders’ equity and net profit are shown separately.

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Associates and joint ventures Securities and term deposits NOTE 3 An associate is an entity over which the investor has significant Investment securities consist of marketable equities and bonds Disposals, business combinations and influence. A joint venture is a joint arrangement whereby the and money-market investments with an initial term of more parties that have joint control of the arrangement have claims than 90 days. Investment securities are measured according other material transactions on its net assets. to the daily price. Joint ventures are accounted for using the proportionate Calycé - acquisition of a portfolio of wind energy projects consolidation method. The balance sheet and income state- Earnings per share in France ment items of controlled entities are recognised in proportion Earnings per share are calculated by dividing net profit by the On 4 December 2020, the Group finalised the acquisition of 16 The purchase price comprises the amount paid on the trans- to the Group’s ownership. No non-controlling shareholdings weighted average number of parent company (Romande wind-farm projects in France with a total installed capacity of action date and a future payment, under an earn-out arrange- are recorded in the balance sheet. Energie Holding SA) shares outstanding. Any potential 646 MW. ment. No goodwill was recognised on this transaction. Associates over which the Group exerts significant influence dilutive effects are stated. Via subsidiary Romande Energie France SAS, the Group Conversely, the Group has recognised operating permits (usually between 20% and 50% of voting rights) are accounted acquired 80% of the share capital of Les Mâts d'Eole SAS and shown under intangible assets (see Note 12) for a total amount

for using the equity method. Dividends 100% of Le Souffle d'Espoir SAS and Calycé 2 SAS. Calycé 2 of CHF 96 million as at 31 December 2020. Operating permits STATEMENTS FINANCIAL These holdings are carried on the balance sheet as invest- Dividends are recorded in the consolidated financial SAS owns the following companies outright: Eole de Piroy are amortised on a straight-line basis over 20 years. ments in associates. They are initially recognised at cost and statements once they have been approved by shareholders at Sàrl, Eole de la Joux Sàrl, Eole des Charmes Sàrl, Eole des Correspondingly, a CHF 23m deferred tax liability was recog- adjusted thereafter for the Group’s share of earnings the Annual General Meeting. Muids Sàrl, Eole des Pinceaux SAS, Eole des Vignottes SAS nised on the balance sheet. Property, plant and equipment as-

(or losses) and dividends reported after the acquisition date, and Eole du Barrois SAS; and 50% of the companies Eole du sets of the entities acquired in this transaction, on a consoli- as well as for any impairment charges. Foreign currency translation Châtelier SAS, Eole d'Opale SAS, Eole de Fradier SAS, Eole dated basis, totalled CHF 15.9m, the working capital including If the Group does not exert significant influence over a Transactions in foreign currencies are translated into the du Génois SAS, Eole de St-Sébastien SAS, Eole du Filaos cash CHF 1.2m and short- and long-term liabilities CHF 17.4m. company despite holding more than 20% of its shares, the functional currency at the exchange rate in effect at the time of SAS and Calycé Rive Droite SAS. Companies held on a 50/50 Each entity has entered into a development contract in the company is treated as a long-term financial asset. the transaction. Monetary assets and liabilities denominated in basis were consolidated proportionately to reflect the fact that framework of the partnership. Once a project has secured Any impairment is recognised directly through the income foreign currencies are translated at the year-end exchange they were jointly controlled by the Group and Calycé as provisional or final approval, or at the effective date of the statement. Losses incurred by an associate that exceed the rate. Exchange differences resulting from these operations are at 31 December 2020. The wind farms are valued by discount- power purchase agreement, an additional payment will be- Group’s equity in that company are not recognised. booked to the income statement. ing future cash flows generated once the asset is come due (earn-out). A provision of CHF 5m was recognised Balances and material transactions with investees and jointly The Group uses options and forward contracts to hedge the commissioned, adjusted for the estimated probability of each as at 31 December with no impact on the annual net profit (see controlled entities accounted for using the equity method are full impact of exchange rate risks and eliminate these project coming to fruition, based on the internal rate of return Note 17). shown separately as items relating to associates. Unrealised differences. forecast by the Group. Because of the uncertainties in devel- All acquired companies were assigned to the Energy Solutions gains arising from transactions between Group companies and The financial statements of foreign entities whose functional opment activities, they will be monitored annually, at the latest business unit. associates are eliminated in proportion to the Group’s stake in currency is not the Swiss franc are translated into Swiss francs by the balance sheet date, to identify any indication of impair- using the following procedure: the associate. Unrealised losses are eliminated in the same ment that could affect the consolidated financial statements in In 2020, the Group did not make any other significant acquisi- ‐ The balance sheets of foreign companies are translated at way, unless the transaction involves a transfer of assets the future. tions. the exchange rate prevailing at balance sheet date. requiring an allowance for impairment. In 2019, the Group did not make any significant acquisition.

‐ The income statements of these companies are translated at FINANCIAL REVIEW The financial statements of associates are adjusted to ensure The Group did not make any significant disposals in either the average exchange rate for the period. consistency with the Group’s chosen accounting policies. 2019 or 2020. ‐ Cash flows from these same companies are translated using NOTE 4 the average exchange rate for the period unless it has varied Changes in scope Segment reporting The scope of consolidation of Romande Energie Group under- significantly during the year or the cash flows had a negligible

went several changes in 2020. These are detailed under impact on the consolidated financial statements. Note 24. ‐ Any exchange differences resulting from the translation of Operating segments are determined on the basis of the busi- The same accounting principles are applied in all the business foreign companies’ financial statements are taken to equity ness units, which are required to submit regular reports to units. No single client accounts for more than 10% of the Basis of recognition and measurement under Exchange differences. relevant Group departments. Group’s revenues. Until 31 December 2019, the Group was divided into four Cash and cash equivalents 2020 2019 business units (BU). From 1 January 2020, the Group The Networks business unit distributes electricity sustainably Cash and cash equivalents comprise cash at banks and in overhauled its structure, resulting in the formation of three and efficiently, in accordance with applicable rules and postal accounts, as well as money-market deposits and Exchange rates used at year-end BUs: regulations. Operations include managing and developing EUR/CHF 1.082 1.093 investments with an initial term of 90 days or less.  Networks distribution infrastructure for electricity and fibre optics. Most of  Energy Solutions this business unit’s operations are subject to regulation. Its Average monthly exchange rates  EUR/CHF 1.070 1.113 Romande Energie Services revenues chiefly consist of the remuneration received for mak-

ing the grid available to end-customers and resellers. This These three business units are managed as separate entities remuneration is governed by the provisions of the Electricity even though they all engage in energy-related activities. Supply Act (ESA). The remainder of its revenues stem from As the Group operates almost exclusively in Switzerland, no services provided to other distribution grid managers and geographical segments have been adopted. The Energy industrial customers. Solutions BU oversees the generation and marketing of energy in France. Transactions between business units are carried out at arm’s length, except for activities where transfer prices are determined by law.

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The Energy Solutions business unit spans the entire kWh The Group’s various support units are housed under the NOTE 5 T chain, operating through two divisions: generation and Corporate label. They encompass digital, finance & services Net revenues power/heating distribution; and end-markets. The Energy divi- and human resources. Attributable expenses are costs sion’s main mission to ensure security of supply for clients. It incurred in connection with the activities of the Group’s head also develops new installations fuelled by renewable energy office. This item also includes income and expense that cannot Net revenues include all income (excluding VAT) from the sale The revenue received between the date of the last reading and sources. The Markets division offers innovative turnkey be allotted specifically to a given business unit as well as of electricity (electrical KWh and thermal energy, and grid 31 December is booked on the basis of the energy distributed, solutions to clients, which it classifies as: households; start-up costs for new activities. usage fee), energy services after the deduction of rebates, measured at an average price less the estimated grid losses. municipalities and property professionals; and business Reporting by segment is prepared on the basis of Swiss GAAP discounts, other agreed deductions as well as provisions for The figure thus obtained may differ from the actual values. clients. It also houses operations linked to electricity marketing FER financial statements. doubtful accounts and bad debt expense. Revenues are Revenues include the estimated volume of energy consumed, and related services such as invoicing and call-centre Restatements are detailed in Note 2. recognised when goods are delivered or services are but not yet billed, between the date of the last meter reading operation, through enersuisse SA, an associated company. rendered. Customer meters are read periodically. and the balance sheet date. Equipment charges collected from Many customers have their electricity consumption readings customers when they are connected to the grid are recognised taken once a year; this applies to approximately 60% of all kWh as income when the connection is installed. The Romande Energie Services business unit is responsible STATEMENTS FINANCIAL for the Group’s entire palette of energy services. Until supplied by the Group. A large proportion of energy revenues Taxes collected on behalf of public authorities re-invoiced to 31 December 2019, this business unit was still referred to is generated by residential customers, who are invoiced annu- eligible end-customers are shown net of purchases of energy, simply as Energy Services. This BU embodies the Group’s ally on the basis of meter readings throughout the year. goods and services. (see Note 2).

determination to offer customers cross-disciplinary expertise to help usher in the transition to clean energy. It does this by In CHF thousands 2020 2019 supporting homeowners, businesses and municipalities restated in making the jump to renewable energies, offering advice, Energy revenues 234 709 205 121 energy audits, innovative products and attractive services. Grid usage revenues from own distribution grid 143 062 134 971

Services revenues 81 494 84 226 In CHF thousands Networks Energy Romande Corporate Elimi- Total Solutions Energy nations VHV grid usage revenues and off-grid revenues 41 934 41 993 Services Equipment financing and third-party contributions 16 470 16 965 2020 Total revenues 517 669 483 276 Net revenues of business units 235 582 261 284 94 499 72 343 ( 94 416) 569 292 Gross profit 184 013 95 422 50 585 71 719 ( 79 186) 322 553 Other income* 13 847 15 319

% of net revenues 78% 37% 54% 57% Internally generated asset additions 30 503 25 561

EBITDA 90 828 38 020 1 512 18 640 - 149 000 Net income from disposal of fixed assets 18 428 697 % of net revenues 39% 15% 2% 26% Change in work in progress ( 10 221) ( 1 060) EBIT 45 375 19 749 ( 368) 11 817 - 76 573

% of net revenues 19% 8% 0% 13% Change in guarantees, losses on bad debts and provision FINANCIAL REVIEW for onerous contracts ( 934) ( 1 557) 2019 (restated) Net revenues of business units 224 238 228 008 97 177 54 727 ( 81 914) 522 236 Total other income 51 623 38 960 Gross profit 174 506 92 969 50 648 53 927 ( 65 107) 306 943 Net revenues 569 292 522 236

% of net revenues 78% 41% 52% 59% Restatements are detailed in Note 2. EBITDA 87 998 42 859 3 110 ( 2 918) - 131 049 % of net revenues 39% 19% 3% 25% * Comparative figures for 2019 under the line items Services The restated amount is CHF 18.4m. There is no impact on EBIT 43 951 30 295 321 ( 9 588) - 64 979 revenues and Other income have been restated. This restate- either Total revenues or Net profit. % of net revenues 20% 13% 0% 12% ment concerns services booked under Other income in the 2019 financial statements.

NOTE 6 Purchases of energy, goods and services

In CHF thousands 2020 2019

restated

Energy purchases 155 480 126 464 HV & VHV grid usage costs and off-grid costs 44 371 43 991 Grid dues, system services and Swissgrid 319 217 Concessions and fees 5 638 5 900 Purchases of goods, services and others 40 931 38 721

Total purchases of energy, goods and services 246 739 215 293 Restatements are detailed in Note 2.

Romande Energie Group 2020 Annual Report 83 82 Romande Energie Group 2020 Annual Report 82 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 83

NOTE 7 NOTE 9 Breakdown of depreciation and amortisation Income taxes and deferred taxes

The amount of the provision for deferred taxes is determined Depreciation and amortisation as presented in the consoli- intangible assets held at the balance sheet date (Notes 11 and Current taxes are determined on the basis of taxable income on the basis of known tax rates at the balance sheet date which dated income statement comprises both the scheduled 12), and the net residual value of divestments following their for the year and charged to the income statement. are likely to be applied when the timing differences are depreciation or amortisation of property, plant and equipment, scrapping. Income taxes are recorded in the same period as the revenues and expenses to which they relate. eliminated. Deferred taxes under each line item of the balance In CHF thousands Notes 2020 2019 Deferred taxes are calculated using the liability method, i.e. sheet are recognised as gross values then offset to provide a based on the timing differences between the value of assets net position for each company. Depreciation of property, plant and equipment 11 ( 64 222) ( 57 148) and liabilities recognised by the tax authorities and their book Loss carry-forwards deductible from future taxable income and Purchase costs relating to divestments ( 9 024) ( 8 350) value recorded in the consolidated financial statements. other deferred tax assets are only recorded as assets if it is probable that they will be recovered subsequently. Accumulated depreciation relating to divestments 6 384 5 105 FINANCIAL STATEMENTS FINANCIAL Net residual value of disposals of property, plant and equipment ( 2 640) ( 3 245) In CHF thousands 2020 2019 Depreciation of property, plant and equipment as shown in the consolidated income statement ( 66 862) ( 60 393) Profit before income tax 95 145 45 882

Amortisation of intangible assets 12 ( 5 565) ( 5 677) Current income taxes 8 226 10 508 Purchase costs relating to divestments Deferred income taxes 199 ( 1 056) Accumulated amortisation relating to divestments Income taxes 8 425 9 452 Net residual value of disposals of intangible assets - - Amortisation of intangible assets as shown Income taxes before use of loss carry-forwards 8 425 9 452 in the consolidated income statement ( 5 565) ( 5 677) Tax loss for which no deferred tax asset was recognised ( 8) ( 28) Tax effect for use of unrecognised loss carry-forwards 232 69

NOTE 8 Income tax after use of loss carry-forwards 8 649 9 493 Net financial income (expense) Weighted applicable tax rate 11.7% 13.8% Dividends from investments are accounted for when the right Deferred tax rate 13.7% 13.7% to distribution is clearly ascertained.

In CHF thousands 2020 2019 FINANCIAL REVIEW

Interest income 1 027 1 373 Exchange rate gains 1 186 311

Other financial income 565 775 Total financial income 2 778 2 459

Interest on borrowings, mortgages and bank borrowings ( 3 346) ( 3 048) Exchange rate losses ( 1 449) ( 709) Other financial expenses* ( 2 597) ( 113) Total financial expenses ( 7 392) ( 3 870) Net financial income (expense) ( 4 614) ( 1 411)

* See Note 20.

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NOTE 10 NOTE 11 Trade accounts receivable Property, plant and equipment

Trade accounts receivable are recorded at nominal value less This provision, made on the basis of past loss data, represents Land, buildings, machinery and equipment are recorded at If the Group has to dismantle power plants or other non-current an adjustment for doubtful accounts. A provision for doubtful 75% of receivables overdue by more than 180 days. The cost less accumulated depreciation. Leasehold improvements assets and rehabilitate the property owned by third parties on accounts is set aside when there are objective signs that the measurement of the provision also considers the impacts of are depreciated over their estimated useful life or the remain- which these assets are located, the corresponding costs are Group will not be able to recover what it is owed. A debtor’s Covid-19, determined on the basis of a management estimate. ing term of the lease, whichever is shorter. Repairs and mainte- added to the initial cost at the acquisition date and depreciated financial difficulties, default or overdue payment are Losses on this position are booked to the provision account. nance are charged directly to the income statement, while over the useful life of the assets. considered as reliable indicators for reducing the value of the Losses on accounts receivable are recognised on the basis of major renovations and refurbishments are capitalised as Assets held with a view to obtaining a return or increasing their receivable. certificates of unpaid debts as well as bankruptcy adjudications property, plant and equipment and depreciated over their capital value are classified as investment property. Investment The Group sets aside a lump-sum provision for accounts that or any other document which can establish the debtor’s estimated useful life. The main components of a single item of property is recorded at cost less accumulated depreciation and are more than 180 days overdue. default. property, plant and equipment are recognised and depreciated are included under land and buildings. FINANCIAL STATEMENTS FINANCIAL separately. At each financial year-end, an impairment review is carried out Depreciation is calculated using the straight-line method based to identify any factors indicating a loss in value of an asset. In CHF thousands 2020 2019 on the remaining term of the concessions or the estimated A loss in value is immediately recognised if the carrying useful life of the asset (presented below), whichever is shorter: amount of an asset is higher than its estimated recoverable Trade receivables 111 379 107 354 amount. The recoverable amount is defined as an asset’s net Downpayments ( 34 506) ( 40 595) Useful life in years selling price or its value in use, whichever is higher. Value in use is the present value of estimated future cash flows Total gross trade accounts receivable 76 873 66 759 Group premises 20-40 Provision for doubtful trade receivable ( 4 935) ( 4 667) expected to be derived from this asset or the smallest identifi- Investment properties 20-40 able group of assets to which it belongs, and whose continuing Total net trade accounts receivable 71 938 62 092 Power plants 25-80 use generates cash inflows which are independent of those Electricity distribution grids 15-40 Changes in the provision for doubtful trade receivables arising from other assets or groups of assets. Consequently, Machinery, equipment, installations the Group must assess the overall economic conditions Balance as at 1 January ( 4 667) ( 3 918) and tools 6-15 expected during the useful life of its assets. These estimates Additions ( 1 063) ( 861) Vehicles 3-8 may deviate considerably from the actual values. Charge-offs 802 173 IT hardware 3-5 An impairment review is carried out annually or whenever there Change in the scope of consolidation ( 7) ( 61) is reason to suspect a loss in value. These reviews are Balance as at 31 December ( 4 935) ( 4 667) performed on the basis of estimated future cash flows resulting Land is only depreciated in the event of a loss in value, or if it from the use of the assets, or market value if the assets are is handed back in connection with the expiry of a concession sold. However, actual cash flows may differ significantly from contract. initial estimates. Work in progress is treated as plant, property and equipment

and depreciated beginning in the month it is brought into FINANCIAL REVIEW service.

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In CHF thousands Land and Power Power Other capital Construction Total NOTE 12 L buildings generation distribution assets work in Intangible assets and goodwill plants installations progress

2020 Intangible assets are measured at cost and amortised using An impairment review is carried out where there are indications Acquisition costs the straight-line method over their estimated useful life as that the recoverable amount may be less than the carrying Balance as at 1 January 141 773 497 454 1 655 222 47 499 125 970 2 467 918 follows: amount. An analysis is carried out at each balance sheet date. Acquisitions and additions 3 581 2 989 34 808 5 277 74 270 120 925 - Operating permits are capitalised if it is clear that they can A loss in value is recognised if the carrying amount of an asset Change in the scope of generate future economic benefits and if the costs can be is higher than its value in use. Value in use is the discounted consolidation 116 408 172 2 132 118 712 reliably measured. They are amortised over 20 years. present value of estimated future cash flows expected to be Disposals and decreases ( 13 814) ( 3 384) ( 8 178) ( 1 550) ( 26 926) - Software includes purchased licences and internally derived from this asset or the smallest identifiable group of assets to which it belongs, and whose continuing use Transfers 8 362 7 901 50 480 1 635 ( 58 845) 9 533 developed applications. They are amortised over 5 years. - Other intangible assets include concessions and customers. generates cash inflows which are independent of those arising Exchange difference ( 1 366) ( 4) 28 1 ( 1 341) STATEMENTS FINANCIAL They are amortised either over the term of the concession or from other assets or groups of assets. Consequently, the Balance as at 31 December 139 902 620 002 1 732 328 53 061 143 528 2 688 821 over their useful life (no more than 5 years). Group must assess the overall economic conditions expected during the useful life of its assets. These estimates may Accumulated depreciation deviate considerably from the actual values.

Balance as at 1 January 73 784 224 621 967 163 36 580 - 1 302 148 In CHF thousands Operating permits Software Other intangible Total Depreciation* 3 124 15 969 41 841 3 288 64 222 assets Change in the scope of consolidation 19 928 49 19 977 2020 Disposals and decreases ( 9 002) ( 442) ( 6 395) ( 1 335) ( 17 174) Acquisition costs Transfers ( 2) 14 112 932 15 042 Balance as at 1 January - 55 683 4 416 60 099 Exchange difference ( 228) ( 4) ( 1) ( 233) Acquisitions and additions 1 978 1 445 3 423 Balance as at 31 December 67 906 259 846 1 016 717 39 513 - 1 383 982 Transfers 1 590 4 1 594 Net carrying value Change in the scope of as at 31 December 71 996 360 156 715 611 13 548 143 528 1 304 839 consolidation 96 051 96 051 Disposals and decreases ( 94) ( 94) 2019 Exchange difference ( 963) ( 963) Acquisition costs Balance as at 31 December 95 088 59 157 5 865 160 110

Balance as at 1 January 135 418 475 392 1 589 730 44 163 126 338 2 371 041 Accumulated amortisation Acquisitions and additions 6 417 7 348 30 743 4 563 61 757 110 828 Balance as at 1 January - 44 061 1 500 45 561

Change in the scope of FINANCIAL REVIEW Amortisation* 372 4 611 582 5 565 consolidation 216 3 797 503 4 516 Disposals and decreases ( 95) ( 95) Disposals and decreases ( 884) ( 1 482) ( 8 746) ( 1 797) ( 12 909) Transfers ( 32) ( 32) Transfers 606 14 531 43 507 81 ( 62 117) ( 3 392) Exchange difference 4 4 Exchange difference ( 2 132) ( 12) ( 14) ( 8) ( 2 166)

Balance as at 31 December 376 48 545 2 082 51 003 Balance as at 31 December 141 773 497 454 1 655 222 47 499 125 970 2 467 918 Net carrying value as at 31 December 94 712 10 612 3 783 109 107 Accumulated depreciation 2019 Balance as at 1 January 70 302 214 754 933 338 35 681 - 1 254 075 Acquisition costs Depreciation* 2 444 12 434 40 632 1 638 57 148 Balance as at 1 January - 50 615 4 202 54 817 Change in the scope of Acquisitions and additions 1 809 216 2 025 consolidation 450 450 Transfers 3 259 3 259 Disposals and decreases 1 038 ( 7 208) ( 808) ( 6 978) Exchange difference ( 2) ( 2) Revaluation 350 350 Balance as at 31 December - 55 683 4 416 60 099 Transfers ( 2 245) 61 74 ( 2 110) Accumulated amortisation Exchange difference ( 772) ( 10) ( 5) ( 787) Balance as at 1 January - 38 769 1 117 39 886 Balance as at 31 December 73 784 224 621 967 163 36 580 - 1 302 148 Amortisation* 5 292 385 5 677 Net carrying value Exchange difference ( 2) ( 2) as at 31 December 67 989 272 833 688 059 10 919 125 970 1 165 770 Balance as at 31 December - 44 061 1 500 45 561 * The reconciliation of the annual amount of depreciation and The net value of investment property, classified under Land Net carrying value as at 31 December - 11 622 2 916 14 538 amortisation on the income statement is shown in Note 7. and buildings, amounted to CHF 1.6m as at 31 December 2020 and CHF 1.7m as at 31 December 2019. * The reconciliation of the annual amount of depreciation and No vacant land was owned as at 31 December 2020 or amortisation on the income statement is shown in Note 7. 31 December 2019.

88 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 89 88 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 89

Goodwill generated by business combinations or investments Goodwill is offset against equity at the acquisition date, as al- NOTE 13 P in associates represents the difference between the acquisition lowed under Swiss GAAP FER. The theoretical capitalisation cost and the present value of the identifiable net assets of the and the amortisation of this goodwill over 5-20 years would Investments in associates acquired company at the acquisition date. have the following impact on shareholders' equity and net profit: This item mainly consists of the interest in EOS Holding SA Financial statements of associates that are prepared in accord- (29.7%), which in turn owns 33.33% of Alpiq. It is sensitive both ance with different accounting standards from those used by In CHF thousands to changes in the euro exchange rate and energy prices on the the Group are adjusted to make them comparable. The share wholesale market. Alpiq is extremely active in trading on of equity of EOS Holding SA shown below corresponds to the Theoretical capitalisation of goodwill: 2020 2019 cross-border power exchanges. equity interest. Acquisition costs The Group has significant interests in the following associates, accounted for using the equity method:

Balance as at 1 January 32 540 26 839 Acquisitions and additions 1 765 5 731

Exchange difference ( 41) ( 30) STATEMENTS FINANCIAL In CHF thousands EOS Holding SA Other associates Balance as at 31 December 34 264 32 540 2020 2019 2020 2019 Changes in carrying value Accumulated amortisation 1 January 439 338 460 058 61 288 60 190 Balance as at 1 January 17 247 14 619 Share of profit from associates 20 442 ( 20 720) 2 744 3 034 Theoretical additions 3 454 2 628 Dividends received ( 1 485) ( 3 095) ( 2 937) Acquisitions 2 702 1 355 Balance as at 31 December 20 701 17 247 Disposals ( 36) Theoretical net book value at year-end 13 563 15 293 Change in the scope of consolidation 1 176 ( 354) 31 December 458 295 439 338 64 779 61 288 Theoretical impact on equity: Condensed balance sheet of EOS Holding SA 2020 2019 Equity as per balance sheet 1 930 595 1 902 357 Theoretical capitalisation of net book value of goodwill 13 563 15 293 Current assets 225 741 145 275 Theoretical equity including net book value of goodwill 1 944 158 1 917 650 Non-current assets 1 704 227 1 609 552 Current liabilities 47 773 44 924 Theoretical impact on net profit: Non-current liabilities 339 380 230 461 Aggregate net assets 1 542 815 1 479 442 Net profit as per income statement 86 720 36 430 Theoretical amortisation of goodwill ( 3 454) ( 2 628) Share of equity of EOS Holding SA 458 295 439 338 FINANCIAL REVIEW Theoretical net profit after goodwill amortisation 83 266 33 802

NOTE 14

Other long-term financial assets

Investments in companies in which the Group holds less than Fair-value adjustments are recognised in the income 20% of voting rights, or over which it does not exert significant statement. Loans issued are carried at cost less any impair- influence or have joint control, are recorded on the balance ment due to non-recoverable amounts. sheet at cost and subsequently carried at fair value.

In CHF thousands 2020 2019

Miscellaneous financial investments 9 120 19 801 Loans to associates 19 917 45 930 Loans to third parties 1 607 728 Total other long-term financial assets 30 644 66 459

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NOTE 15 NOTE 16 Pension obligations Borrowings

Borrowings are recorded at their nominal value. The Borrowings or tranches of borrowings carrying an irrevocable Basis and organisation of occupational pension provision corresponding transaction costs are expensed in the income right to defer repayment for longer than 12 months are statement. classified under non-current liabilities; all others are shown The Romande Energy pension fund (hereinafter the “pension The pension fund itself manages coverage for risks relating to under current liabilities. fund”) is a legally independent occupational benefits institution old age, death and disability. As at 31 December 2020, the which operates under the mandatory pension regime intro- funded status, which is pension assets relative to liabilities In CHF thousands 2020 2019 duced by the Swiss Federal Act of 25 June 1982 on within the meaning of the OPA (which uses the static measure- Occupational Pensions (hereinafter "OPA"). The employers ment), stood at 112%, relative to 109.6% at the end of 2019. Due to banks and other financial institutions 84 532 110 224 affiliated with the pension fund are: If a plan becomes underfunded, several remedial measures Other long-term financial commitments 1 260 1 060 Romande Energie SA are provided for under the terms of the OPA. FINANCIAL STATEMENTS FINANCIAL Romande Energie Services SA Total borrowings 85 792 111 284 - Effitec SA Management of investments Short-term portion of borrowings ( 650) ( 100 343) - The Pension Board, which is the highest authority in the - Total long-term borrowings 85 142 10 941 Pension plans pension fund, has responsibility over investing. It comprises The pension fund runs a separate pension scheme for each five employee and five employer representatives. The assets employer. Under Swiss legislation (OPA), all pension plans are of the pension fund serve solely to cover current and future The Group’s exposure to interest-rate and renewal risks at the defined-contribution plans, with funding based on predeter- liabilities. The investment policy aims to optimise capital balance sheet date was as follows: mined contributions paid by working insured members and management so as to attain the stated pension objectives. employers, calculated on the basis of pensionable income. Actuarial data and requirements must be consistently In CHF thousands 2020 2019 Each company has a specific basic plan for covering fixed represented in the investment policy objectives, which are remuneration. A supplementary plan covers variable remuner- liquidity, safety and income. Less than 1 year 765 100 343 ation; it is identical for each company. The Pension Board defines the strategic allocation of the Between 1 year and 5 years 2 000 7 441 pension fund’s assets together with authorised fluctuation Over 5 years 83 027 3 500

margins that are consistent with the pension objectives. Lastly, Total borrowings 85 792 111 284 it ensures compliance with the investment principles laid down

by legislation and its own investment guidelines. Borrowings at floating rate 63 027 -

Borrowings at fixed rate 22 765 111 284 Employer contribution Nominal Balance Balance Increase / reserves value Waiver sheet sheet decrease Income statement impact Total 85 792 111 284 In CHF thousands 31.12.2020 of use 31.12.2020 31.12.2019 2020 2019

Currency composition of borrowings: FINANCIAL REVIEW Patronage funds ------Pension plans 24 788 - 24 788 24 788 - - - 2020 2019 Total 24 788 - 24 788 24 788 - - - CHF 27% 100% The employer contribution reserve was not used in 2020 nor EUR 73% -

in 2019. Total 100% 100%

Borrowings have fixed due dates with no early repayment In conjunction with its purchase of Groupement Solaire Cestas Economic benefit and Surplus / Pension costs economic obligation deficit Group's economic share Change from Contributions in personnel expenses clauses. Bank borrowings are arranged at market terms. The 2 SAS and its subsidiaries, the Group assumed a floating-rate In CHF thousands 2020 2020 2019 previous year for the period 2020 2019 average interest rate paid on borrowings was 0.98% versus debt to be repaid in 2037. As at 31 December 2020, this 2.12% in 2019. borrowing amounted to EUR 49.4m. Patronage funds ------Pension plans - - - - - 9 149 8 494 Total - - - - - 9 149 8 494

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NOTE 17 NOTE 18 S Provisions Share capital and outstanding shares

A provision is a liability of uncertain timing or amount of which Provision for decommissioning As at 31 December 2020, the issued share capital amounted down mutual pre-emptive rights in the event of the sale of the outcome is uncertain. They are recorded when the Group The provision for dismantling concerns wind farms owned by to CHF 28.5m, consisting of 1,140,000 fully paid-up registered shares held by any of these parties. Signatories of this is under a legal or constructive obligation arising from a past REF Eolien SAS. The provision for each wind farm was shares with a nominal value of CHF 25 each. The amount agreement owned 55.33% of the share capital as at event, when it is probable that an outflow of funds will be nec- recalculated on the basis of forecast decommissioning costs at available for distribution as a dividend is based on the amount 31 December 2020. essary to settle the obligation and when the amount of the the target dates determined under French legislation. The shown under Voluntary retained earnings in the financial In the case of purchases of own shares, the total amount paid obligation can be reliably estimated. The provision amount is longest deadline is 2035. The discount rate used by the Group statements of the parent company, Romande Energie Holding and the costs directly related to the transaction (net of income estimated by the Executive Board at the balance sheet date on for this type of operation is 3.9%. SA. It is calculated in accordance with the provisions of the tax) are deducted from the Group’s equity until the cancellation the basis of the best possible estimate of the expenditure Swiss Code of Obligations. Consolidated equity includes or later sale of the securities. If own shares are sold, the required to settle the obligation. If an outflow of funds is unlikely Provision for restructuring statutory reserves of CHF 134m (CHF 104m in 2019), which proceeds from the sale, net of transaction costs (but including FINANCIAL STATEMENTS FINANCIAL or the amount cannot be reliably estimated, the obligation is Romande Energie Group established a new structure with are not available for distribution. the tax effect of income tax), are allocated to the Group’s shown not on the balance sheet but under contingent liabilities. effect from 1 January 2020, aimed at sustaining its long-stand- There is an agreement between Vaud canton, various Vaud equity. If the impact is significant, the cash flows expected in order to ing activities while developing new business models. During municipalities, SIE SA and Banque Cantonale Vaudoise laying discharge the obligation are discounted. The provision is the 2018 financial year, the Group put forward an official discounted at the current market rate, which is increased if detailed plan which specified the businesses and employees % 2020 2019 necessary by a rate reflecting the risks inherent in the liability. concerned and the projected impact out to 2021. The full cost was ultimately covered by the Romande Energie Group Vaud Canton* 38.60 38.60 Provision for onerous contracts pension fund. The remainder of the provision was used during Romande Energie Holding SA, Morges 9.97 7.64 The provision for onerous contracts separates out the business the 2020 financial year. Groupe E SA, Fribourg 6.31 6.29 profit earned on a price plan from the performance generated Credit Suisse Fondation de placement SA, Zurich 3.97 3.73 by a procurement strategy. The profitability of each price plan Provision for development contracts Banque Cantonale Vaudoise, Lausanne* / *** 3.05 3.05 is analysed on an annual basis. The provision is calculated on In connection with the acquisition of wind farm projects in Lausanne City Council * 3.02 3.00 the basis of the cash flows expected for the duration of each France, the Group signed several development contracts with contract. The discount rate used for this type of operation is Free float * / ** 35.08 37.69 a service provider specialising in the development of suitable 4.5%. The Group expects this provision to be cleared by 2022. sites for wind-power generation facilities. Once a project has Shareholders holding 3% or more of the share capital of Romande Energie Holding SA are considered significant secured provisional or final approval, or at the effective date of shareholders. the power purchase agreement, a payment will become due. * Bound by the shareholders' agreement on reciprocal pre-emptive rights The provision is calculated on the basis of an estimation of the ** Of which 180,869 shares (15.9%) held by the Vaud municipalities and SIE SA, which are bound by the shareholders' cash flows specified in the contract. The discount rate used by agreement on mutual pre-emptive rights the Group for this type of operation is 3.5%. The longest *** Including 9,900 shares (0.9%) bound by the shareholders' agreement on mutual pre-emptive rights

deadline is 2026. FINANCIAL REVIEW Issued outstanding shares 2020 2019

Development Onerous Dismantling Restructuring Total Issued shares 1 140 000 1 140 000 In CHF thousands contrats contracts Own shares held by the Group ( 113 685) ( 87 065)

2020 Outstanding shares 1 026 315 1 052 935 Balance as at 1 January - 236 513 412 1 161 Change in consolidation scope 4 621 177 4 798 During the year under review, Romande Energie Holding SA Discounting effect 2 107 109 acquired 28,737 registered shares and sold 2,117 registered Use ( 189) ( 412) ( 601) shares at an average price of CHF 1,100. Exchange difference ( 7) ( 7) Balance as at 31 December 4 621 49 790 - 5 460 Short-term portion of provisions ( 2 672) ( 6) ( 2 678) Total long-term provisions 1 949 43 790 - 2 782

2019 Balance as at 1 January - 297 509 1 752 2 558 Allocations 66 ( 127) ( 61) Discounting effect 10 20 30 Use ( 137) 1 ( 185) ( 321) Reversals ( 1 028) ( 1 028) Exchange difference ( 17) ( 17) Balance as at 31 December - 236 513 412 1 161 Short-term portion of provisions ( 188) ( 328) ( 516) Total long-term provisions - 48 513 84 645

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NOTE 19 I NOTE 20 NOTE 20 Derivative financial instruments Related parties

Derivative financial instruments held for hedging purposes are Conversely, forward energy-purchasing contracts entered into Entities with significant influence on the Group (Vaud Canton), Other related parties are entities of which one or more member measured using the same principles as the hedged for portfolio optimisation, or which are used for optimisation at the Romande Energie pension fund, members of the Board of of the Board of Directors or the executive of such an entity transaction. When a hedging operation has not yet impacted a later date, and any other financial instrument used for trading Directors and the Executive Board and companies related to holds a management position within the Group. This grouping the balance sheet (i.e. only future cash flows are being purposes are measured at fair value. They are recognised them, and associates are considered related parties. also includes municipalities of which the mayor or a council hedged), the hedging instrument is not recognised. Instead, its under assets or liabilities as soon as the Group becomes These parties are supplied with energy under terms set out in member holds a management position within the Group. fair value, and any gains or losses, is shown below. bound by contract to these instruments. Any remeasurement contracts. Vaud Canton collects fees for the use of Transactions with related parties are conducted under terms gains or losses are immediately recognised in income. hydropower. set out in contracts. Under the share sale agreement of 3 July Shareholders who own 20% or more of the share capital of 2020, Romande Energie Holding SA transferred 20% of the Value recognised on Romande Energie Holding SA, the parent company, are share capital of Romande Energie Services SA to a related Contract amounts Positive fair value Negative fair value balance sheet STATEMENTS FINANCIAL considered entities with significant influence. party, with retroactive effect from 1 July 2020. The interest was In CHF thousands 2020 2019 2020 2019 2020 2019 2020 2019 Associates are companies in which the Group owns more than sold at the equity carrying amount of the corresponding shares. Forward currency contracts: 20% of the equity. This transaction generated a non-cash loss of CHF 2.2m in the - Hedging instruments 1 499 19 600 5 43 30 308 consolidated financial statements as at 31 December 2020. - Portfolio optimisation 19 622 32 629 411 803 See Note 8.

Forward energy contracts: In CHF thousands Sales Purchases Amounts due Amounts - Hedging instruments 11 133 540 220 to related from related from related owed to - Portfolio optimisation 17 808 1 451 1 451 parties parties parties related parties Total derivative financial Related parties instruments 21 121 81 170 5 2 034 441 1 331 - 1 451 Entities with significant influence 2020 1 050 20 004 192 1 179

on the Group 2019 781 16 980 153 1 150

10 744 47 971 1 658 1 055 Associates 2020 2019 11 886 49 805 2 022 2 199 58 992 67 675 8 420 - Other related entites 2020 2019 35 534 70 861 4 027 149

NOTE 21 N Remuneration, expenses and social insurance FINANCIAL REVIEW costs of the Executive Board and the Board of Directors

In CHF thousands 2020 2019

Basic salaries paid to Executive Board members during the year 1 573 2 014 Variable salaries paid to Executive Board 1 045 1 193 Allowances for entertainment expenses 113 131 Social insurance costs (state pension, unemployment, occupational pension, etc.) 566 672 Total remuneration, expenses and social insurance costs - Executive Board 3 297 4 010

Compensation paid to Board of Directors (including expenses) 663 696 Social insurance costs (state pension, unemployment, etc.) 43 47 Total remuneration, expenses and social insurance costs - Board of Directors 706 743

In 2020, the Executive Board had 6.5 members on a full-time- equivalent basis (7.25 in 2019). Contributions paid into the pension fund for members of the Executive Board amounted to CHF 317K (CHF 328K in 2019). The Board of Directors comprised 9 members in 2020. (2019: 11 members).

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NOTE 22 NOTE 24 Other future commitments, contingent assets Subsidiaries, joint ventures and associates

and liabilities Main Cur- Share Ownership (%) business rency capital In CHF thousands 2020 2019 '000 2020 2019 Guarantee obligations in favour of third parties 27 000 28 474 Subsidiaries Romande Energie SA, Morges E CHF 36 150 100.0 100.0 Risks related to ElCom positions and their legal interpre- Romande Energie Services SA, Préverenges 1) 2) S CHF 25 000 80.0 100.0 tation Bas-Valais Energie SA, Vouvry E CHF 19 898 72.0 72.0 Romande Energie Group is exposed to legislative changes Romande Energie Group’s legal position is no weaker than it Romande Energie Commerce SA, Morges E CHF 15 294 73.9 73.9 that could impact its financial statements. In December 2017, was in the previous year. The Group has a solid case support- Eoliennes de Provence SA, Provence E CHF 6 000 60.0 60.0 the Federal Assembly passed the Federal Power System ing its position. Energie Renouvelable de l'Avançon SA, Bex 3) E CHF 3 000 51.0 51.0 STATEMENTS FINANCIAL Transformation and Extension Act, which amends Article 6(5) Since 2018 Elcom has issued Directives that define the returns CEVM Compagnie Energétique du Vallon de Morgins SA, of the Electricity Supply Act (ESA), which came into force on investments (WACC) in hydropower generating facilities for Troistorrents E CHF 1 500 85.7 85.7 on 1 June 2019. This legislative amendment would seem to the current year. Directive 3/2018 retroactively set the WACC Centrale Thermique de Gland SA, Gland 2) E CHF 1 000 80.0 100.0 confirm the decision of the Federal Supreme Court of 20 July levels for the years 2014 to 2017. Romande Energie is Arnon Ernergie SA, E CHF 1 000 60.0 60.0 2016 (ATF 142 II 451), which considered that the practice of challenging both the level of WACC and its retroactive applica- PolyForce SA, Bulle 1) S CHF 300 - 100.0 the regulatory authority (ElCom) was legal, but not the only one tion as well as whether these Directives themselves are Demierre Deschenaux SA, Oron 2) S CHF 240 80.0 100.0 applicable. This practice, which has hitherto been challenged capable of constituting a legal basis for deploying the afore- by the electricity industry and has yet to be clarified by the case mentioned effects. Therefore, the consolidated financial Effitec SA, Morges N CHF 200 100.0 100.0 law of the Federal Supreme Court, consists in using an statements do not reflect the potential impact of these PolyTech SA, Bulle 1) S CHF 100 - 100.0 average supply price to allocate energy purchases to the Directives for years prior to 2019. AFCO Management SA, Renens 2) S CHF 100 80.0 100.0 various customer segments. It should be noted that the In the light of the uncertainties concerning the interpretation of Frigo Service SA, Corminboeuf 4) 2) S CHF 100 80.0 - interpretation of Article 6(5) of the ESA and the elements used Article 6 of the ESA by ElCom and possibly by the various legal Romande Energie France SAS, Paris D EUR 7 700 100.0 100.0 in the calculation of the average price method were challenged authorities in the context of a possible appeal following an Centrale Hydroélectrique de Bar SAS, Paris E EUR 2 091 95.0 95.0 in an appeal to the Federal Supreme Court against a decision administrative procedure, these full-year financial statements REF Eolien SAS, Paris E EUR 600 100.0 100.0 rendered on 28 June 2018 by the Federal Administrative do not reflect the potential impact of this change as it is not REF Hydro SAS, Paris 5) E EUR 150 100.0 100.0 Court (see Decision A-1344/2015). The proceedings before quantifiable. Romande Energie Group will continue to monitor Groupement Solaire Cestas 2 SAS, Paris 6) D EUR 8 51.0 - the Federal Supreme Court are currently pending. developments concerning this issue over the coming months Centrale Solaire Constantin 7 SAS, Paris 6) E EUR 3 100.0 - Romande Energie Group applies a method that deviates from and the potential impact on its activities. Centrale Solaire Constantin 8 SAS, Paris 6) E EUR 3 100.0 - the model that the ElCom wishes to apply. However, the Centrale Solaire Constantin 9 SAS, Paris 6) E EUR 3 100.0 - method implemented since 2009 by Romande Energie has Centrale Solaire Constantin 10 SAS, Paris 6) E EUR 3 100.0 - FINANCIAL REVIEW been applied consistently, regardless of electricity price changes. In addition, this method had also been presented to Calycé 2, Paris SAS 7) D EUR 1 100.0 - ElCom in the past. Eole de Piroy Sàrl, Paris 7) E EUR 1 100.0 - Eole de La Joux Sàrl, Vitry-la-Ville 7) E EUR 1 100.0 - Eole des Charmes Sàrl, Vitry-la-Ville 7) E EUR 1 100.0 - NOTE 23 E Eole des Muids Sàrl, Vitry-la-Ville 7) E EUR 1 100.0 - Post-balance sheet events Eole des Pinceaux SAS, Vitry-la-Ville 7) E EUR 1 100.0 - Eole des Vignottes SAS, Vitry-la-Ville 7) E EUR 1 100.0 - Eole du Barrois SAS, Vitry-la-Ville 7) E EUR 1 100.0 - Approval of the consolidated financial statements Le Souffle d’Espoir SAS, Vitry-la-Ville 7) E EUR 1 100.0 - The consolidated financial statements of Romande Energie Group for 2020 were approved by the Board of Directors Les Mâts d’Eole, Vitry-la-Ville SAS 7) E EUR 1 80.0 - on 20 April 2021. A dividend of CHF 36 per share will be submitted for approval by shareholders at the Annual General Joint ventures Meeting. Eole du Châtelier SAS, Vitry-la-Ville 7) E EUR 1 50.0 - If this recommendation is adopted, the total dividend payment Eole d’Opale SAS, Vitry-la-Ville 7) E EUR 1 50.0 - will amount to CHF 36.9m, taking into account shares held by Eole de Fradier SAS, Vitry-la-Ville 7) E EUR 1 50.0 - the Group in treasury. Eole du Génois SAS, Vitry-la-Ville 7) E EUR 1 50.0 - Eole de Saint Sébastien SAS, Vitry-la-Ville 7) E EUR 1 50.0 - Eole du Filaos SAS, Vitry-la-Ville 7) E EUR 1 50.0 - Calycé Rive Droite SAS, Vitry-la-Ville 7) E EUR 1 50.0 -

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Main Cur- Share Ownership (%) 1) Under the agreement of 14 May 2020, Romande Energie 7) Under the share transfer agreement of 6 November 2020, business rency capital Services SA merged PolyForce SA and PolyTech SA into Romande Energie France SAS acquired 80% of the share itself, with retroactive effect from 1 January 2020. As the capital of Les Mâts d'Eole SAS and 100% of Le Souffle '000 2020 2019 surviving company held all the shares of the transferring d'Espoir SAS and Calycé 2 SAS, with effect from 4 December Associates companies, the merger did not give rise to an increase in 2020. Calycé 2 SAS owns the following companies outright: EOS Holding SA, Lausanne D CHF 324 000 29.7 29.7 capital nor a grant of shares. Eole de Piroy SARL, Eole de la Joux SARL, Eole des Charmes SARL, Eole des Muids SARL, Eole des Pinceaux SAS, Forces motrices Hongrin-Léman S.A. (FMHL), Château-d'Oex E CHF 100 000 41.1 41.1 2) Under the share transfer agreement of 3 July 2020, Eole des Vignottes SAS and Eole du Barrois SAS; and 50% of Sitel SA, Morges N CHF 20 850 33.3 33.3 Romande Energie Holding SA transferred 20% of the share the companies Eole du Châtelier SAS, Eole d'Opale SAS, Société des Forces Motrices du Grand-St-Bernard SA (FGB), capital of Romande Energie Services SA to a related party, Eole de Fradier SAS, Eole du Génois SAS, Eole de Bourg-St-Pierre E CHF 8 000 36.0 36.0 with retroactive effect from 1 July 2020. St-Sébastien SAS, Eole du Filaos SAS and Calycé Rive Droite Forces Motrices de l'Avançon SA (FMA), Bex E CHF 7 095 39.0 39.0 3) As resolved by the Extraordinary General Meeting of SAS. The purpose of these companies is to design, build and Forces Motrices de Sembrancher (FMS) SA, Sembrancher E CHF 6 000 20.6 20.6 Shareholders on 25 June 2020, Energie Renouvelable de operate wind farms.

Société Electrique des Forces de l'Aubonne SA, Aubonne E CHF 5 000 36.6 36.6 l'Avançon SA increased its capital by CHF 2,900K to STATEMENTS FINANCIAL 8) As resolved by the General Meeting of Shareholders Cadcime SA, Eclépens 8) E CHF 4 325 22.0 12.9 CHF 3,000K. The Group has a 51% stake in this company. on 1 July 2020, Cadcime SA increased its capital by CHF 825K Spontis SA, Avenches N CHF 2 650 40.0 40.0 4) Under the share transfer agreement of 6 April 2020, to CHF 4,325K. The Group has a 22% stake in this company. ThermorésÔ SA, Vinzel 9) E CHF 8 500 40.0 40.0 Romande Energie Services SA acquired the entire share 9) As resolved by the General Meeting of Shareholders neo technologies SA, Lausanne N CHF 2 000 48.9 48.9 capital of Frigo Service SA. It has a share capital of CHF 100K. on 4 May 2020, ThermorésÔ SA increased its capital by The company is active in commercial and industrial EnergeÔ SA, Vinzel E CHF 2 000 25.0 25.0 CHF 6,000K to CHF 8,500K. The Group has a 40% stake in refrigeration, climate control and heat pumps. Energie Solaire SA, Sierre N CHF 1 600 34.0 34.0 this company. DransGrid SA, Orsières E CHF 1 200 50.0 50.0 5) Under the purchase agreement of 30 July 2020 and 10) Through an amendment to its articles of association 13 November 2020, Centrale Hydro électrique de Meyronnes Energies Nouvelles Vionnaz SA, Vionnaz 10) E CHF 1 000 35.0 35.0 on 3 December 2020, Avançon Energie SA changed its legal SAS acquired Icaunaise d'électricité SAS outright. The VO RE-Nouvelable SA, Orbe E CHF 1 000 50.0 50.0 name to Energies Nouvelles Vionnaz SA. purpose of this company is to build and operate hydropower MBR SA, Massongex E CHF 1 000 33.3 33.3 plants in France. Under the merger agreement of 20 November 11) As authorised by the General Meeting of Shareholders on Agrogaz Lignerolle SA, Lignerolle E CHF 800 40.0 40.0 2020, Centrale Hydro électrique de Meyronnes SAS merged 3 September 2019 and as resolved by the Board of Directors enersuisse SA, Dietikon N CHF 600 33.3 33.3 subsidiary Icaunaise d'électricité SAS into itself, with on 11 May 2020, Tayo SA increased its capital by CHF 15,500 Tayo SA, Ecublens 11) N CHF 140 20.0 10.0 retroactive effect from 30 July 2020. As the surviving company to CHF 139,800. The Group has a 20% stake in this company. Gazobois SA, Cossonay-Ville 12) E CHF 120 - 50.0 held all the shares of the transferring company, the merger 12) Under the share transfer agreement of 31 March 2020, did not give rise to an increase in capital nor a grant of shares. Energie Renouvelable Vouvry SA, Vouvry E CHF 100 35.0 35.0 Romande Energie SA sold its entire equity interest in Concurrent with the merger, the company changed its legal St-Gingolph Energia SA, St-Gingolph E CHF 100 25.0 25.0 Gazobois SA. name to REF Hydro SAS.

Main business 6) Under the purchase contract of 27 March 2020, Romande E) Generation, distribution and marketing of energy The percentage of voting rights is systematically identical to Energie France SAS acquired with effect from 30 March 2020 D) Holding company the equity interest with the exception of Forces Motrices de a stake of 51% in Groupement Solaire Cestas 2 SAS, which FINANCIAL REVIEW S) Energy services l'Avançon SA and Société Electrique des Forces de l'Aubonne wholly owns the solar-farm operators Constantin 7, 8, 9 and 10 N) Other SA, for which the share of voting rights is 37.3% and 24.7%, SAS. The purpose of these companies is to operate a solar respectively. farm in the Gironde administrative department in France.

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FINANCIAL STATEMENTS FINANCIAL FINANCIAL REVIEW FINANCIAL REVIEW

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FINANCIAL STATEMENTS FINANCIAL FINANCIAL REVIEW FINANCIAL REVIEW

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ROMANDE ENERGIE HOLDING SA FINANCIAL STATEMENTS

Income statement FINANCIAL STATEMENTS FINANCIAL as at 31 December 2020

In CHF thousands 2020 2019

Income Financial income 22 578 23 901 Other income 3 147 2 740 Total net income 25 725 26 641

Operating expenses Other operational expenses ( 1 654) ( 1 708) Depreciation, amortisation and impairment on non-current assets ( 2 634) - Financial expenses ( 3 415) ( 5 117) Total of operating expenses ( 7 703) ( 6 825)

Profit before income taxes 18 022 19 816

Income taxes ( 546) ( 604)

Net profit 17 476 19 212

FINANCIAL REVIEW FINANCIAL REVIEW

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Balance sheet Notes to the parent company financial statements as at 31 December 2020

In CHF thousands Notes 31.12.2020 31.12.2019 NOTE 1 Accounting principles applied ASSETS

Cash and cash equivalents and securities listed on a stock exchange 116 595 254 644 These full-year financial statements have been drawn up Dividends are recorded in the consolidated financial Trade receivables 21 45 in compliance with the principles of Swiss law, especially the statements once they have been approved by shareholders at Receivables and other current assets from related parties 247 012 161 244 articles covering commercial accounting and financial the Annual General Meeting. Other current receivables 25 219 41 771 statement presentation (Art. 957 to 962 of the Swiss Code of Investments in subsidiaries and financial assets are measured Accrued income and prepaid expenses 450 53 Obligations). Because it has prepared consolidated financial individually. Total current assets 389 297 457 757 statements as at 31 December 2020, i.e. including its subsidi- STATEMENTS FINANCIAL

Long-term financial assets 330 441 381 650 aries, Romande Energie Holding SA is not required to present

Investments in subsidiaries 241 776 249 961 a cash-flow statement, provide a full set of notes to its financial statements, or publish a management report. The company Property, plant and equipment 21 859 17 722 has no employees. Total non-current assets 594 076 649 333 Property, plant and equipment is depreciated over the Total assets 983 373 1 107 090 following periods: LIABILITIES AND SHAREHOLDERS' EQUITY Group premises: 20-40 years Trade payables 256 46

Payables and other current liabilities due to related parties 57 364 29 972 -

Short-term interest-bearing liabilities 5 - 100 000 Other current liabilities 3 970 4 307 NOTE 2 Deferred income and accrued expenses 89 1 384 Shares held in treasury Total current liabilities 61 679 135 709

Long-term interest-bearing liabilities 5 4 000 4 000 2020 2019 Provisions and similar items required by law 12 000 12 000 Number of CHF 000 Number of CHF 000 shares shares Total long-term liabilities 16 000 16 000 Total liabilities 77 679 151 709 Balance as at 1 January 87 065 70 271 108 740 94 113 Changes 26 620 29 253 ( 21 675) ( 23 842) Share capital 28 500 28 500 FINANCIAL REVIEW Balance as at 31 December 113 685 99 524 87 065 70 271 Statutory retained earnings 5 859 5 859

Voluntary retained earnings 970 859 991 293 With effect from 17 December 2020, Romande Energie As a result, the Group bought back 28,737 of its own shares, Own shares 2 ( 99 524) ( 70 271) Holding SA and Holdigaz SA terminated their alliance, formed of which 2,000 actions were sold on to major shareholders and

Total shareholders' equity 905 694 955 381 in 2013, by unwinding their cross-shareholdings. institutional investors.

Total liabilities and shareholders' equity 983 373 1 107 090

NOTE 3 E Exchange rate used and functional currency

The Company's financial statements are drawn up in CHF. The exchange rate applied is as follows: Foreign currency transactions are revalued as at 31 December EUR 1 = CHF 1.082 of the year under review. USD 1 = CHF 0.889

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NOTE 4 NOTE 8 NOTE 8

Contingent liabilities Major shareholdings

Main Currency Share capital Ownership (%)* The Company is part of a VAT group and is therefore jointly When Agrogaz Lignerolle SA was formed, the Group – through business and severally liable to the Swiss Federal Tax Administration for Romande Energie Holding SA – issued several guarantees VAT debts incurred by the other members. totalling CHF 4.6 million (the same amount as in 2019) to cover '000 2020 2019 loans granted to the company for funding the construction of The Group, through Romande Energie Holding SA, issued a Romande Energie SA, Morges 1) CHF 36 150 100.0 100.0 guarantee of EUR 19.7m (the same amount as in 2019) to generation plants. These loans originated from a bank as well Bas-Valais Energie SA, Vouvry 1) CHF 19 898 72.0 72.0 cover payments agreed between its subsidiary Romande as from federal and cantonal agricultural funds. Romande Energie Services SA, Morges 2) CHF 25 000 80.0 100.0 Energie SA and a supplier of power-generation equipment. Further guarantees were issued for a total amount of CHF 1.8m (CHF 5.5m in 2019). Romande Energie Commerce SA, Morges 1) CHF 15 294 73.9 73.9 Romande Energie France SAS, Paris 2) EUR 7 700 100.0 100.0

Sitel SA, Morges 2) CHF 20 850 33.3 33.3 STATEMENTS FINANCIAL NOTE 5 Forces Motrices de Sembrancher (FMS) SA, Sembrancher 1) CHF 6 000 20.6 20.6 Borrowings Société Electrique des Forces de l'Aubonne SA, Aubonne 1) CHF 5 000 36.6 36.6 ThermorésÔ SA, Vinzel 1) CHF 8 500 40.0 40.0

In CHF thousands Rate Period Maturity 31.12.2020 31.12.2019 Main business 1) Generation, distribution and marketing of energy * The percentage of voting rights is systematically identical to AVS 2.12% 2010-2020 07.07.2020 - 50 000 2) Other the equity interest with the exception of Société Electrique des AVS 2.12% 2010-2020 07.07.2020 - 50 000 Forces de l'Aubonne SA, for which the share of voting rights Banque Cantonale de Fribourg 2.25% 2019-2023 07.05.2023 500 500 is 24.7%.

Banque Cantonale de Fribourg 2.27% 2019-2025 30.09.2025 1 500 1 500 NOTE 9 Banque Cantonale de Fribourg 1.75% 2019-2027 30.06.2027 2 000 2 000 Significant shareholders Total borrowings 4 000 104 000 % 2020 2019 Vaud Canton 38.60 38.60 NOTE 6 Romande Energie Holding SA, Morges 9.97 7.64

Fees paid to auditors Groupe E SA, Fribourg 6.31 6.29

Credit Suisse Fondation de placement SA, Zurich 3.97 3.73 In CHF thousands 2020 2019 Banque Cantonale Vaudoise, Lausanne 3.05 3.05

Lausanne City Council 3.02 3.00 FINANCIAL REVIEW Payments for auditing services 66 67 Fees paid to auditors 66 67 Shareholders holding 3% or more of the share capital of Romande Energie Holding SA are considered significant shareholders.

NOTE 7 7

Remuneration and social insurance costs of

members of the Board of Directors and the Executive Board

The remuneration and the social insurance costs of the Board Share ownership is as follows: of Directors and the Executive Board are shown in the remuneration report, pursuant to the provisions of the Held by members of the Board of Directors 0 share 0% Ordinance against Excessive Remuneration by Listed Held by members of the Executive Board 10 shares < 1% Companies Limited by Shares (ERCO). No option or conversion rights were held by the Board of Directors or the Executive Board as at 31 December 2020 or 31 December 2019.

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Recommended appropriation of retained earnings As at 31 December 2020

In CHF thousands 31.12.2020

Balance carried forward from previous year 950 253 Dividend retained on own shares (Art. 659a CO) 3 130 Net profit for the year 17 476 Retained earnings 970 859 Own shares ( 99 524) Available earnings at the disposal of the AGM 871 335 FINANCIAL STATEMENTS FINANCIAL Dividend of CHF 36 per share 41 040 Balance carried forward 929 819 Total 970 859

As the general reserve has attained 20% of the share capital, further allocations thereto are not recommended.

On behalf of the Board of Directors

Guy Mustaki, Chairman

Christian Petit, Chief Executive Officer

FINANCIAL REVIEW FINANCIAL REVIEW

112 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 113 112 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 113 NOTES FINANCIAL STATEMENTS FINANCIAL

114 Romande Energie Group 2020 Annual Report 114 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 115 CALENDAR CONTACTS

2020 financial results: Media relations 22 April 2021 Michèle Cassani, spokesperson T +41(0)21 802 95 67 Closure of share register: [email protected] 15 June 2021 Investor relations 119th Annual General Meeting: René Lauckner 29 June 2021 T + 41(0)21 802 95 24 [email protected] Ex dividend date: 1 July 2021 Corporate governance Carine Maalouf, Board Secretary (non-member) Record date: T +41(0)21 802 96 46 2 July 2021 [email protected]

Dividend payment: 5 July 2021

H1 2021 financial results: 9 September 2021

Publication of 2021 Annual Report: PUBLICATION CREDITS May-June 2022

120th Annual General Meeting: Romande Energie Holding SA May 2022 Rue de Lausanne 53 Case postale 1110 Morges

T+41(0)21 802 91 11 F +41(0)21 802 95 95 www.romande-energie.ch

Project manager: Michèle Cassani

Design: François Dumas (Dreamaxes.ch)

Photos: Pedro Ribeiro

Publishing: Dynamics Group

Romande Energie would like to thank all employees who were instrumental in the production of this Annual Report

Printed on responsibly-sourced paper

116 Romande Energie Group 2020 Annual Report ROMANDE ENERGIE GROUP

Romande Energie SA Rue de Lausanne 53 P.O. Box CH-1110 Morges 1 T +41 21 802 91 11 F +41 21 802 95 95 www.romande-energie.ch