2 CORPORATE GOVERNANCE Corporate governance at Romande Energie is guided by the core values of transparency and fairness as we seek to inspire confidence in all our stakeholders. Our principles of corporate governance aim to sustain profitability in the long run while safeguarding the interests of our shareholders, customers and business partners.

1 GROUP STRUCTURE AND SHAREHOLDERS

Most of the Group’s business consists of the generation, distribu- 1.1.2- Legal structure of Romande Energie Group 1.1.3 tion and marketing of electricity, together with energy services. Romande Energie Holding SA, whose head office is located at rue de Lausanne 53, CH-1110 , , is the 1.1.1 Operational structure of Romande Energie Group top holding company of Romande Energie Group. Its securities As at 31 December 2017, the operational structure of Romande are listed on the SIX Swiss Exchange in Zurich under security Energie Group was comprised of four business units: number 2.560.733 and ISIN code CH 0025607331. It was Networks, Energy, Romande Energie Commerce and established in 1901 under the corporate name Compagnie Romande Energie Services (the final two being incorporated), Vaudoise des Forces Motrices des Lacs de Joux et de l’Orbe supported by four head-office departments: Finance, Human and was originally listed on the Lausanne Stock Exchange. Resources, Legal and Administrative Affairs, and Corporate Excluding holdings of own shares, market capitalisation Communications (which reports to the Corporate Secretary). amounted to CHF 1,217m as at 31 December 2017. Romande The diagram opposite illustrates the Group’s organisational Energie Holding SA has no actual operations, and it is the only structure. Group company whose shares are listed on the stock exchange. The list of companies that are part of the consoli- dation of Romande Energie Holding SA as at 31 December 2017 is shown under Note 36 of the Notes to the Consolidated Financial Statements.

Romande Energie Group fulfils the statutory and regulatory provisions on corporate governance that are applicable in Switzerland. This report complies with the Directive on Information relating to Corporate Governance, issued by SIX Exchange Regulation on 1 September 2014, and uses the numbering system thereof. Additionally, it takes into account the Swiss Code of Best Practice for Corporate Governance (2014 edition). Supplementary information is contained in the Remuneration Report (see page 39). Unless stated otherwise, the information contained herein relates to business as at 31 December 2017.

16 Romande Energie Group 2017 Annual Report Group’s organisational structure As at 31 December 2017

Chairman of the Board of Directors Guy Mustaki

Strategy and Corporate GOVERNANCECORPORATE Development Committee Guy Mustaki

Appointments and Corporate Secretary Compensation Committee Wolfgang Martz

Finance and Audit Committee Christian Budry

Chief Executive Officer Pierre-Alain Urech1

HEAD-OFFICE DEPARTMENTS Internal Audit

Finance Human Resources Denis Matthey1 Jean-Daniel Habegger 1 Deputy CEO

Legal and Administrative Affairs Daniel Hammer 2

Corporate Communications Michèle Cassani

BUSINESS UNITS

Romande Energie Romande Energie Networks Energy 1 1 Commerce SA Services SA Patrick Bertschy Christian Frère Philippe Durr 1 Oliviero Iubatti 1

1 Member of the Executive Board 2 Member of the Management Committee

Romande Energie Group 2017 Annual Report 17 Group’s legal structure ROMANDE ENERGIE As at 31 December 2017 HOLDING SA

100% 100% 73.93% ROMANDE ENERGIE ROMANDE ENERGIE ROMANDE ENERGIE SA SERVICES SA COMMERCE SA

100% 100% 100%

Neuhaus Energie SA PolyTech SA** PolyForce SA**

41.14% 29.71% 36% 27.98% Forces Motrices Forces Motrices du Forces Motrices 11.02% EOS Holding SA* Hongrin-Léman SA Gd-St-Bernard SA de l’Avançon SA

31% 1.51%

DransEnergie SA

100% Effitec SA 3.86% 71.99% Bas- Energie SA Energie Renouvelable 51% de l'Avançon SA 49.99% DransGrid SA 50.01% Brent Energia SA 65% 45% CISEL Informatique SA Eoliennes de 7.6% HYDRO Exploitation SA 60% Provence SA 48.88% neo technologies SA Société Electrique des St-Gingolph 36.6% 25% Forces de l' SA Energia SA 30% Spontis SA

9.53% vo énergies holding SA 50% VO RE-Nouvelable SA 50% 33.34% SITEL SA Forces Motrices 20.6% Agrogaz Lignerolle SA 40% de Sembrancher SA 8% B-Valgrid SA Energie Renouvelable 40% ThermorésÒ SA 35% SA 34% Energie Solaire SA

25% EnergeÔ SA Avançon Energie SA 35%

3.12% SIRESO 2.52% Holdigaz SA 50% Gazobois SA 50%

12.89% Cadcime SA Société électrique 1.05% intercommunale 15.74% AGEPP SA de la Côte SA

100% Meyronnes SAS

Romande Energie 100% 100% REF Eolien SAS France SAS

Sté Icaunaise 5% d'électricité SAS

* EOS Holding SA has a 31.44% interest in Alpiq Holding SA ** With effect from 1 January 2018

Equity interest exceeding 50% Equity interest equal to or less than 50%

18 Romande Energie Group 2017 Annual Report ROMANDE ENERGIE HOLDING SA SPONTIS SA Top holding company of Romande Energie Group, shares of which are Joint venture between Romande Energie, BKW, Groupe E and Lausanne listed on SIX Swiss Exchange in Zurich; owns equity interests, real property City Council; provides standardisation, supply-chain and logistics services and intellectual property rights for business partners ROMANDE ENERGIE SA SITEL SA Group’s operating company; generates hydropower using conventional Company controlled by UPC Cablecom Sàrl; owns TV, internet and multi- methods; owns and manages distribution grids; manages energy portfolios; media networks and provides services to Group companies DRANSGRID SA ROMANDE ENERGIE COMMERCE SA Owns and operates distribution grids in the Dranse region Joint venture; markets power and manages customer bases of partner FORCES MOTRICES DE SEMBRANCHER SA distribution system operators (DSO); provides marketing and sales services Owns hydropower facilities on the Dranse river to Group companies B-VALGRID SA ROMANDE ENERGIE SERVICES SA Owns and operates the high-voltage distribution grid in the Lower Valais region Designs and installs heat pumps, thermal solar and PV solutions as well HOLDIGAZ SA as district heating, ventilation, air-conditioning, home automation, telecom- Owns and operates natural-gas distribution pipelines; advises on building munications, IT and lighting (including street lighting); markets energy techniques; offers energy services GOVERNANCECORPORATE NEUHAUS ENERGIE SA ENERGIE SOLAIRE SA Installs heating, ventilation, air-conditioning and gas solutions as well as Provides thermal solar solutions plumbing and panelling solutions ENERGEÔ SA POLYFORCE SA Joint venture; responsible for developing a deep geothermal project in Provides heating, ventilation, air-conditioning, plumbing and refrigeration Vinzel solutions in canton of Fribourg SIRESO SOCIÉTÉ D’INVESTISSEMENT DE SUISSE OCCIDENTALE SA POLYTECH SA Owns, manages and holds equity interest in Swiss energy companies, thus Operates a design office, provides advisory and planning services for directly and indirectly representing the (primarily public) interests of the energy and building technology cantons and cities of Geneva, , Fribourg, Valais, Neuchâtel and Jura THERMORESEAU AVENCHES SA within these companies Generates and recovers heat; has created and installed a district heating SOCIÉTÉ ÉLECTRIQUE INTERCOMMUNALE DE LA CÔTE SA network in the Avenches region, which it also operates and maintains Owns and operates distribution grids; markets electricity and heating EOS HOLDING SA systems, indoor installations and multimedia services Manages interest in Alpiq; owns interests in wind-power and solar firms CADCIME SA operating in France and Germany Owns and operates a district heating system FORCES MOTRICES HONGRIN-LÉMAN SA AGEPP SA Owns pump-turbine facilities in Hongrin-Veytaux Responsible for developing geothermal drilling projects, primarily in the CENTRALE THERMIQUE DE VOUVRY SA Lavey region; leverages geothermal resources by supplying water to the Responsible for developing a combined-cycle natural-gas plant with output Bains de Lavey thermal baths as well as generating power and providing of 400 MW in the Chavalon area (VS) heat to various customers SOCIÉTÉ DES FORCES MOTRICES DU GRAND-ST-BERNARD SA BRENT ENERGIA SA Owns hydropower facilities on Toules-Pallazuit lake (VS) Owns hydropower facilities in the Brent area DRANSENERGIE SA EOLIENNES DE PROVENCE SA Offers maintenance services for hydropower facilities and distribution grids; Partnership with Zurich City Council (EWZ, the city’s energy provider); provides services to outside parties responsible for developing a wind farm in the Provence municipality in BAS-VALAIS ENERGIE SA Switzerland Formed in June 2012 through merger of Société Electrique du Bas-Valais ST-GINGOLPH ENERGIA SA SA and Société Electrique de Champéry – Val-d’Illiez SA; owns distribution Operates turbines on the St-Gingolph drinking-water network grids and hydropower facilities on Tanay-Vouvry lake GAZOBOIS SA FORCES MOTRICES DE L’AVANÇON SA Joint venture with Holdigaz SA; responsible for developing methanation Owns and manages distribution grids; owns and operates the La Peuffeyre- projects Sublin and Benjamine hydropower facilities; also active in multimedia distribution VO RE-NOUVELABLE SA EFFITEC SA Joint venture with VO Energies Holding SA; owns and develops generation Audits indoor electrical installations facilities powered by novel sources of renewable energy ENERGIE RENOUVELABLE DE L’AVANCON SA AGROGAZ LIGNEROLLE SA Responsible for constructing and operating the hydropower plant, Owns power plant fuelled by wet biomass located at Le Glarey, whose turbines are fed by the Avançon river; respon- ENERGIE RENOUVELABLE VOUVRY SA sible for developing business in all aspects of renewable energy Owns Fossau hydropower facilities THERMORÉSÔ SA AVANÇON ENERGIE SA Responsible for wholesale and retail marketing, in Switzerland and abroad, Responsible for constructing and operating the Vionnaz hydropower plant, of thermal energy and energy from other fluids and renewable sources (such whose turbines are fed by the Avançon river as gas), in particular geothermal energy; also responsible for telecommuni- ROMANDE ENERGIE FRANCE SAS cations; markets services related to all aspects of renewable energy Simplified joint-stock company under French law; owns and acquires inter- HYDRO EXPLOITATION SA ests in firms generating power from renewable energy sources in France Offers maintenance services for hydropower facilities CENTRALE HYDROÉLECTRIQUE DE MEYRONNES SAS CISEL INFORMATIQUE SA Simplified joint-stock company under French law; owns hydropower facili- IT services provider owned jointly by Romande Energie, Groupe E and Alpiq ties on the Ubaye river, in the Alpes-de-Haute-Provence department NEO TECHNOLOGIES SA REF EOLIEN SAS IT services provider owned jointly by Romande Energie, Lausanne City Simplified joint-stock company under French law; owns wind farms in Council and the municipality of Lutry Ploudalmézeau and Pluzunet, located in the departments of Finistère and SOCIÉTÉ ELECTRIQUE DES FORCES DE L’AUBONNE SA Côtes d’Armor, respectively Owns and operates distribution grids and hydropower facilities on the SOCIÉTÉ ICAUNAISE D’ÉLECTRICITÉ SAS Aubonne river; markets electricity and heating systems, indoor electrical Simplified joint-stock company under French law; holds six hydropower installations and multimedia services facilities in Burgundy, the Ardennes and the south of France VO ENERGIES HOLDING SA ALPIQ HOLDING SA Owns and operates distribution grids and hydropower facilities on the Founded in 2008 as a result of the merger between Atel and EOS along Jougnenaz and Orbe rivers; markets electricity, natural-gas distribution with the Swiss assets of EDF; generates power in Switzerland and abroad; pipelines, indoor electrical installations and multimedia services trades and markets energy; provides energy services

Romande Energie Group 2017 Annual Report 19 1.2 Significant shareholders 1.3 Cross-shareholdings As at 31 December 2017, the significant shareholders entered Romande Energie Holding SA has no knowledge of cross- in the share register of Romande Energie Holding SA were as shareholdings, on either side, exceeding 5% of equity or all follows: shares with voting rights. It does not own shares in its significant shareholders, namely Groupe E SA (Fribourg) and as at 31 December 2017 Banque Cantonale Vaudoise (Lausanne). Nor is there any Vaud Canton* 440 047 shares* 38.60 % cross-representation on the boards of directors of listed Vaud municipalities and SIE SA* 184 897 shares* 16.22 % Banque Cantonale Vaudoise**, companies. However, Romande Energie Holding SA owns a Lausanne 34 731 shares ** 3.05 % 2.52% interest in Holdigaz SA, which in turn owns a 2.52% Romande Energie Holding SA, interest in Romande Energie Holding SA. It should also be Morges 108 740 shares 9.54 % stated that Romande Energie SA, a subsidiary company of Groupe E SA, Fribourg 69 230 shares 6.07 % Credit Suisse Investment Romande Energie Holding SA, owns a 29.71% interest in EOS Foundation SA, Zurich 41 019 shares 3.60 % Holding SA, which owns 31.44% of Alpiq Holding SA. Guy Holdigaz SA, Vevey 28 772 shares 2.52 % Mustaki, Chairman of the Board of Directors of Romande Free float 232 564 shares 20.40 % Energie Holding SA, also chairs the board of directors of EOS Total 1 140 000 shares 100 % Holding SA. Wolfgang Martz, Vice-Chairman of the Board of * Parties to an agreement on reciprocal pre-emptive rights Directors of Romande Energie Holding SA, also sits on the ** Of which 9,900 shares are tied to an agreement on reciprocal pre- boards of directors of EOS Holding SA and Alpiq Holding SA. emptive rights Jean-Yves Pidoux, a member of the Board of Directors of Nothing relating to shareholdings was disclosed in the year under Romande Energie Holding SA, also sits on the boards of review. Disclosures can be consulted by visiting the website of directors of EOS Holding SA and Alpiq Holding SA as the body responsible for such announcements: Lausanne City Council’s representative. Christian Budry is a https://www.six-exchange-regulation.com/en/home/ member of the board of directors of EOS Holding SA. publications/significant-shareholders.html

2 CAPITAL STRUCTURE

2.1 Capital 2.4- Shares, participation and dividend-right certificates 2.5 The ordinary share capital of Romande Energie Holding SA The share capital consists solely of registered shares. All shares amounts to CHF 28.5m and is divided into 1,140,000 registered are vested with the same ownership and voting rights. There shares with a nominal value of CHF 25 each. Authorised are no restrictions on the transferability of shares. The Company capital amounts to CHF 10.125m. Romande Energie Holding has no liabilities in regard to participation and dividend-right SA has no conditional capital. certificates, or concerning convertible bonds. Net profit may be freely allocated by shareholders at the Annual General Meeting 2.2 Authorised capital subject to the provisions of Article 24 of the Articles of The Board of Directors has an authorised capital of Association, which partly incorporate Article 671 of the Swiss CHF 10.125m at its disposal, consisting of 405,000 registered Code of Obligations, according to which: shares with a nominal value of CHF 25 each, approval of which “1 Five percent of the profit for the financial year are allocated was renewed by a resolution passed at the Annual General to the general reserve until the reserve reaches twenty percent Meeting on 24 May 2016. This resolution expires on 24 May of the share capital. 2018. Under Article 5(2) of the Articles of Association, the 2 The following items are also allocated to this reserve even if terms and conditions for subscription of authorised capital are it has reached the statutory limit: as follows: “The Board of Directors shall decide the price and 1. after payment of issuance costs, the proceeds of shares paying-in method (payment in cash, by set-off, in kind or by issued that exceed the nominal value, inasmuch as they are takeover of assets). The Board of Directors may exclude not allocated to amortisation or pension objectives shareholders’ pre-emptive right to subscribe shares and 2. the balance of the payments made on cancelled shares, less attribute it to third parties in cases where new shares are used the loss that would have been incurred on shares issued in to acquire undertakings, parts of undertakings or equity their stead” investments, or for new investment projects in the electricity As Romande Energie Holding SA is a holding company, field or related sectors or to finance such transactions, or for Article 671(2) point 3 and Article 671(3) of the Swiss Code employee share ownership.” of Obligations do not apply.

2.3 Changes in capital during the past three years None.

20 Romande Energie Group 2017 Annual Report 2.6.1 Limitations on transferability and nominee registration 2.6.2- Reasons for granting exceptions in the year under 2.6.4 The following rules apply: review – Admissibility of nominee registrations – • There are no transfer restrictions on registered shares Procedure and conditions for cancelling statutory • Natural persons and legal entities are registered with no privileges and limitations on transferability limitation on voting rights The Articles of Association do not contain any specific • Fiduciary registrations carry no voting rights provisions concerning these points. • General authorisations for registration are accepted • The Company does not print registration applications 2.7 Convertible bonds and options • The Company no longer prints paper certificates Romande Energie Holding SA has not issued any convertible • Nominee SIS (NS): no entry in the share register bonds or options. • AREG-data compatible (electronic transmission) The Articles of Association have been amended to comply with the requirements of the Federal Act on Book-Entry GOVERNANCECORPORATE Securities, which entered into force in early 2010.

Movements in shareholders’ equity Statutory Voluntary Reserve Share General retained retained for own Own Retained CHF thousands capital reserve earnings earnings shares shares earnings Total Balance as at 1 January 2015 28 500 5 859 99 124 775 424 908 907 Net profit 70 159 70 159 Dividend paid -30 797 -30 797 Treasury share transactions and other 5 011 -5 011 -94 113 - -94 113 Reallocation of reserves -5 859 5 859 908 900 -94 113 -814 786 1 Balance as at 31 December 2015 28 500 - 5 859 913 911 - -94 113 - 854 157 Net profit 74 410 74 410 Dividend paid -34 032 -34 032 Balance as at 31 December 2016 28 500 - 5 859 954 289 - -94 113 - 894 535 Net profit 69 125 69 125 Dividend paid -37 125 -37 125 Balance as at 31 December 2017 28 500 - 5 859 986 289 - -94 113 - 926 535

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 is the highest body supervising implementation of this strategy. It is also the final governing body of the Group. Under its by-laws, it comprises three special committees.

3.1 Members of the Board of Directors The Board of Directors comprises eleven members. Romande Energie Group and have not performed any such All Board members are Swiss citizens. They have no role over the past three years. Furthermore, they have no close operational management role within the companies of business ties with any of these companies.

Expiry of Name Year of birth Since term of office Functions Committee appointments

Guy Mustaki * 1960 2005 2018 Chairman Chairman, Strategy and Corporate Development Committee Wolfgang Martz ** 1954 2003 2018 Vice-Chairman Chairman, Appointments and Compensation Committee Laurent Balsiger * 1970 2013 2018 Director Member, Appointments and Compensation Committee Anne Bobillier ** 1965 2016 2018 Director Member, Strategy and Corporate Development Committee Christian Budry ** 1957 2003 2018 Director Chairman, Finance and Audit Committee Paola Ghillani * 1963 2009 2018 Director Member, Finance and Audit Committee Bernard Grobéty ** 1950 2002 2018 Director Member, Finance and Audit Committee Elina Leimgruber * 1968 2017 2018 Director Member, Appointments and Compensation Committee Jean-Jacques Miauton ** 1951 1997 2018 Director Member, Strategy and Corporate Development Committee Jean-Yves Pidoux * 1956 2007 2018 Director Member, Appointments and Compensation Committee Alphonse-Marie Veuthey * 1965 2011 2018 Director Member, Finance and Audit Committee

Resigned in 2017 Laurent Ballif * 1951 2007 2017 Director Member, Appointments and Compensation Committee

* Director appointed by the Vaud cantonal government (Articles 762 CO and 16 of Articles of Association) The expiry of their terms of office falls under the remit of the cantonal government ** Director elected by shareholders at the Annual General Meeting

Romande Energie Group 2017 Annual Report 21 3.1-3.2 Education, career, other activities and vested interests. As at 31 December 2017

GUY MUSTAKI * WOLFGANG MARTZ LAURENT BALSIGER* CHAIRMAN VICE-CHAIRMAN Degree in environmental engineering Doctorate in law from Lausanne Degree in agronomic engineering from the from the Swiss Federal Institute of University; admitted to the bar Swiss Federal Institute of Technology, Zurich Technology, Lausanne; certificate in Swiss citizen Swiss citizen public administration from the Swiss Graduate School of Public Administration, Career Career Lausanne • From 1991, practising barrister and professor • 1977-1981, began career in development Swiss citizen at Lausanne University (commercial law, aid sector in Africa corporate law and corporate governance) • 1981-1985, dairy supply specialist with Career the Agricultural Services department of • 1994-2000, environmental engineer at ESA Mandates for non-listed companies Nestec, a subsidiary of Nestlé Consultores (Honduras), Sulzer Chemtech • Chairman of the board of directors of • 1985-1989, partner in an international and CSD Ingénieurs Conseils SA EOS Holding SA (Lausanne) management and rural-development • 2001-2013, service director for the public • Vice-chairman of the board of directors consultancy works and utilities division of Pully of Rahm SA (Lausanne) • 1990-2005, CEO of Minoteries Group • From 1 June 2013, energy director of • Member of the board of directors of Vaud Canton Yteqam SA (Lausanne) Mandates for listed companies • Member of the board of directors of Alpiq Mandates for non-listed companies Mandates for other legal entities Holding SA (Lausanne) • Chairman of the board of directors of • Board member of the Foundation SIRESO Société d'Investissement de for the Centre for Corporate Law Mandates for non-listed companies Suisse Occidentale SA (Granges-Paccot) (CEDIDAC) at Lausanne University • Member of the board of directors of EOS • Member of the boards of directors (Chavannes-près-Renens) Holding SA (Lausanne) of Société Electrique des Forces • Board member of the Théodora • Chairman of the board of directors of de l’Aubonne SA (Aubonne) and Foundation (Lonay) SOCIM Société Coopérative Immobilière Forces Motrices Hongrin-Léman SA • Board member of the Chassot et Guex Montreux (Montreux) (Château-d’Œx) Foundation for Medical Ethics (Lausanne) • Member of the boards of directors of Schenk Holding SA and Schenk SA (Rolle) Mandates for other legal entities Other activities • Board member of the Morija Foundation • Chairman of the project steering committee (Yverdon-les-Bains) for the new hydropower plant on the Rhône (Bex-Massongex) Other activities • Member of the Epalinges local council

22 Romande Energie Group 2017 Annual Report * Appointed by the Vaud cantonal government CORPORATE GOVERNANCECORPORATE

ANNE BOBILLIER CHRISTIAN BUDRY PAOLA GHILLANI* Degree in computer science from Degree in economics and social sciences Degree in pharmaceuticals from Geneva University; diploma from CRPM, from Fribourg University; Swiss-certified Lausanne University; degree in an in-service training college accountant International General Management for Swiss/French citizen Swiss citizen Executives from the IMD; degree from Career the International Program for Board Career • 1983-2001, auditor with Ernst & Young SA, Management at the IMD • 1988-2001, various management positions then partner and director of auditing Swiss/Italian citizen within IBM department for Western Switzerland and • 2001-2002, CEO of Ascom Autelca AG Career head of manufacturing, technology & • From 2002, Managing Director of Bechtle • Began career at Ciba/Novartis before energy for the Swiss market Steffen Suisse SA (Geneva) joining other multinational companies • 2001-2011, CFO and executive committee • 1999, CEO of the Max Havelaar Foundation Mandates for non-listed companies member of Bobst Group (Prilly) • Member of the board of directors of • Member of the boards of directors of Mandates for listed companies FLO International (Fair Trade Labelling Skyguide and SkySoft-ATM (both in Member of the board of directors of • Organisations), chairwoman from 2001-2005 Geneva) Banque Cantonale du Jura (Porrentruy) • 2005, founded own company, Paola Mandates for other legal entities Mandates for non-listed companies Ghillani & Friends SA • Board member of CCI France Suisse • Member of the board of directors of EOS Mandates for non-listed companies (Swiss-French Chamber of Commerce Holding SA (Lausanne) • Member of the boards of directors of the and Industry) • Chairman of the boards of directors of CFO Solutions SA (Lausanne), Groux Fédération des Coopératives Migros Arts Graphiques SA (Mont-sur-Lausanne), (Zurich), TwentyGreen Holding AG (Root) TrustStone SA (Nyon) and Techdata (Bern) and Transitec Ingénieurs-Conseils SA • Member of the boards of directors of (Lausanne) Giovanna Holding SA (Montreux), Pian Mandates for other legal entities Holding Sàrl (Bourg-en-Lavaux) and the • Honorary member of the International group comprising Chanadela SA and Committee of the Red Cross – ICRC Cadris SA (Boncourt) (Geneva) Mandates for other legal entities • Board member of the Chênes Foundation • Chairman of the Vaud cantonal pension (Vandœuvres) and Aquatis Foundation fund (Lausanne) (Lausanne) • Chairman of the Novandi Foundation • Member of expert panels advising (Boncourt) sustainable investment funds • Board member of the Greenbrix Investment Foundation (Geneva) Other activities • Member of the Oron local council

Romande Energie Group 2017 Annual Report 23 BERNARD GROBÉTY ELINA LEIMGRUBER* JEAN-JACQUES MIAUTON Swiss-certified expert in accounting and Swiss VET certificate for business Business education, specialising in Italian controlling employees; various management courses steel industry Swiss citizen and certifications Swiss citizen Swiss citizen Career Career • 1972-2009, deputy general manager Career • Until 2008, CEO of Miauton and CRH of the financial division of Vaudoise • Began career in Geneva in the hotel Gétaz Holding (previously Gétaz Romang, Assurances group industry before switching to wealth Vevey) • From 2009, corporate director management • From 2008, director and CEO of Swiss • 1995-2001, at the International Committee Madeness Solutions Group SA (La Mandates for non-listed companies of the Red Cross, deputy head of the Africa Chaux-de-Fonds) and A+M Miauton • Member of the boards of directors region in the administrative and finance Concept SA (Lausanne) of Romande Energie Commerce SA department in Geneva (Morges) and Parking des Hôpitaux SA Mandates for non-listed companies • 2001-2002, operations manager for events (Lausanne) • Member of the boards of directors of at the Neuchâtel site of Expo.02 • Chairman of Loginco, a housing cooperative Romande Energie Commerce SA (Morges), • 2003, project coordinator for the World for industry and trade (Lausanne) Madeness Solutions Group SA (- Electronic Media Forum (WEMF) in Geneva • Vice-chairman of Coopérative Romande de-Fonds), CDM Hôtels et Restaurants SA • 2004-2008, director of genève roule in de Cautionnement – PME (Pully) and (Lausanne), Maison Planzer Transports SA Geneva Hotela Assurances SA (Montreux) (Satigny), Giovanna Holding SA (Chailly), • 2009-2011, reception manager at the Patrimoine Gérance SA (Neuchâtel) and Mandates for other legal entities Alimentarium food museum in Vevey Covedis SA (Lausanne) • Board member of La Source Foundation • 2011-2016, member of the Vevey local council (Lausanne) • From July 2016, of Vevey

Mandates for non-listed companies • Vice-chairwoman of the board of directors of VMCV SA (Clarens) • Member of the board of directors of MVR SA (Montreux)

Mandates for other legal entities • Board chairwoman of the Vevey, Ville d’Images Foundation • Board member of the Performing Arts Foundation and the Les Eglantines Foundation (Vevey), and of the Countess Andrée d’Etchegoyen Foundation (Montreux)

24 Romande Energie Group 2017 Annual Report * Appointed by the Vaud cantonal government From 1 June 2017 DANIEL HAMMER BOARD SECRETARY (non-member) Law degree; executive qualification in corporate communications (SAWI); course in negotiating skills at Harvard Law School; Certificate of Advanced Studies from the University of Applied Sciences and Arts Western Switzerland and from Bern University of Applied Sciences in Public Affairs and Lobbying Swiss citizen CORPORATE GOVERNANCECORPORATE Mandates for non-listed companies • Member of the boards of directors of Romande Energie Commerce SA (Morges) and Bas-Valais Energie SA (Vouvry)

Other activities • Member of the Pully local council

JEAN-YVES PIDOUX* ALPHONSE-MARIE VEUTHEY* Doctorate in sociology and anthropology Law degree from Fribourg University; A WORD OF THANKS from Lausanne University admitted to the bar and licensed as a The Board of Directors would like to Swiss citizen notary thank Laurent Ballif, who has retired Swiss citizen Career after serving the Board since 2007. • Associate professor at Lausanne University’s Career He provided our Company with sterling Faculty of Social and Political Sciences • From 1994, barrister service by contributing his wealth of • 2002-2016, member of Vaud cantonal • From 1995, notary expertise and supporting his colleagues parliament as a highly involved and available board Mandates for non-listed companies • From 2006, member of Lausanne City member. Mr Ballif is succeeded by • Chairman of the board of directors of Council and responsible for the city’s Elina Leimgruber. Bas-Valais Energie SA (Vouvry) public utilities department • Vice-chairman of the intercantonal We would also like to extend our warmest Mandates for listed companies organisation Chablais-Région () thanks to Pierre Oberson, who resigned • Member of the board of directors of Alpiq • Member of the boards of directors as Corporate Secretary on 31 January Holding SA (Lausanne) of Romande Energie Commerce SA 2017, and to Valentine Maire, who stood (Morges) and Santé Rennaz SA (Rennaz) Mandates for non-listed companies in as Interim Corporate Secretary from • Committee member of the Hôpital • Member of the boards of directors of EOS 1 February to 31 May 2017. Riviera-Chablais (Rennaz) Holding SA (Lausanne), Forces Motrices Hongrin-Léman SA (Château-d’Œx), Mandates for other legal entities Gaznat SA (Vevey), Epura SA (Lausanne), • Board member of the André Manzini Vaud-Fribourg TV SA (Lausanne), Boisy Foundation (Aigle) and the Fondation TV SA (Lausanne), Mediaprofil SA (Vevey), de Soutien de l’Hôpital Riviera-Chablais Cadouest SA (Prilly), Forces Motrices de (Rennaz) l’Aboyeu SA (Collonges), Petrosvibri SA Other activities (Vevey), SI-REN SA (Lausanne), LFO SA • District governor of (Lausanne), AGEPP SA (Lavey-Morcles) and Transports Publics de la Région Lausannoise SA (Renens)

Mandates for other legal entities • Director of the cantonal insurance institution (Pully); board member of the Foundation for Dramatic Arts and the chamber orchestra (Lausanne)

Romande Energie Group 2017 Annual Report 25 3.3 Number of mandates permitted (Article 12(1) point 1 of 3.4 Elections and terms of office Swiss Federal Ordinance on Excessive Pay) Pursuant to Articles 762 of the Swiss Code of Obligations and Pursuant to Article 22a(1 and 3) of the Articles of Association, 16 of the Articles of Association, 6 of the 11 members of the members of the Board of Directors may each hold the following Board of Directors are appointed by the Vaud cantonal other mandates in the management and supervisory bodies government, two of whom represent shareholding municipalities. of legal entities which are required to be registered in the The expiry of their terms of office falls under the remit of the Swiss commercial register or a comparable foreign register: cantonal government. 1. no more than five mandates as a member of a board of The other five members of the Board are elected to office directors or as a member of a supreme governing or super- individually by shareholders at the Annual General Meeting for visory body of companies considered as publicly traded a term of one year, expiring after completion of the next Annual companies, as defined by Article 727(1) point 1 of the Swiss General Meeting. These directors are eligible for re-election. Code of Obligations; as well as However, directors reaching the age of 70 in the calendar year 2. no more than fifteen mandates as a member of a board of in which the election takes place are no longer eligible. directors or member of a supreme governing or supervisory In addition, the Articles of Association contain no clauses body of companies not considered as publicly traded com- deviating from the statutory provisions on the appointment of panies within the meaning of the Swiss Code of Obligations the Chairman, members of the committee overseeing com- and the Federal Act on Collective Investment Schemes; and pensation and the independent proxy. 3. no more than ten mandates as a member of the board of directors or member of a supreme governing or supervisory 3.5 Internal organisational structure body of other legal entities not precisely meeting the above General considerations criteria. The Board of Directors meets for half-day sessions, in principle no less than five times a year. In 2017, the Board of Directors The restrictions of paragraphs 1 and 2 do not apply in the met seven times for sessions lasting approximately four hours. presence of legal entities that are controlled directly or It also met for a seminar lasting one-and-a-half days. Last year, indirectly by the Company or which control the Company. They the Board monitored business, reviewed changes in framework do not apply in the presence of legal entities which are the conditions, deliberated on strategy and looked into possible occupational pension funds insuring the employees of the additional generation and procurement options to extend the Company or companies that it controls directly or indirectly. Group’s existing capabilities. It also examined possible strategic Furthermore, multiple mandates exercised in several outside alliances, energy management and oversaw the development legal entities among which there is direct or indirect control, of new lines of business. Further to this, the Board conducted or within occupational pension funds insuring the employees thorough analysis on managing conflicts of interest. of these companies, only count as one mandate within the Members of the Board of Directors diligently attend the meaning of paragraphs 1 and 2. meetings of both the Board and the committees of which they are members. Under the by-laws, each committee of the Board of Directors is vested with a role, functions and responsibili- ties. The committees have no decision-making powers (see exceptions hereinafter under Appointments and Compensation Committee and under the special decision-making remit). They meet several times a year, depending on the matters at hand and opinions required by the Board. Committee members receive the necessary documents in good time for them to prepare for deliberations. Committee meetings are attended by the CEO, the relevant managers and, as needed, in-house or external experts, who are called in to advise on particular points.

Strategy and Corporate Development Committee The Committee consists of the Chairman of the Board and two other members. Meetings are normally held four to six times a year (eight times in 2017), and are chaired by the Chairman of the Board. Meetings last for three hours on average. The Committee is responsible for providing the Board with recommendations and opinions on the following issues:

26 Romande Energie Group 2017 Annual Report • Economic climate, industry conditions and developments in It has decision-making authority in the following areas: energy markets 1. Appraising the expertise, independence and services of the • Corporate strategy, business strategy, information technol- statutory auditors, and managing the contract with the latter ogy (IT) strategy and developments, strategic targets and 2. Clarifying differences of opinion between the Management key performance indicators, and strategic action plans Committee and the statutory auditors in respect of the • Corporate development financial statements • Cooperation and strategic partnerships 3. Approving the internal audit schedule • Strategic acquisitions It also has the remits and competences conferred upon it by • Shareholder base the by-laws and Annex 3 pertaining thereto. • Relations with cantonal authorities and the municipalities In 2017, the Finance and Audit Committee reviewed the served financing of assets situated abroad as well as counterparty • Any other matter that the Board may wish to assign risk in energy purchases, corporate acquisition opportunities and the depreciation schedule for hydropower assets owned. GOVERNANCECORPORATE In 2017, the Strategy and Corporate Development Committee continued reviewing a number of power-sourcing options, Appointments and Compensation Committee including the call for tenders issued by Alpiq for its Swiss The Committee has four members and normally meets three to hydropower generation assets. Key points of the Committee’s six times a year (four times in 2017). Meetings last for two hours deliberations were monitoring the Group’s strategy for 2011- on average. The Committee is responsible for providing the Board 2020 along with strategic interests, alliances and cooperation with recommendations and opinions on the following issues: agreements with other strategic partners, and investments in • Composition of the Board of Directors and subcommittees generation from renewable energy sources and the • Oversight of rules in relation to proper corporate governance development of new lines of business involving district heating, • Code of conduct and business ethics biogas generation, energy services and self-consumption of • Corporate governance and remuneration reports photovoltaic energy. The Committee furthermore reappraised • Appointment of members of the Board of Directors and its the strategy for developing wind-power assets. Chairman, members of subcommittees and their chairs, the Corporate Secretary, the Group’s representatives on the Finance and Audit Committee boards of directors of Romande Energie SA, Romande Energie The Committee has four members and normally meets four to Commerce SA and EOS Holding SA, as well as the candidate six times a year (six times in 2017). Meetings last for three put forward by EOS Holding SA to sit on the board of directors hours on average. The Committee is responsible for providing of Alpiq Holding SA the Board with recommendations and opinions on the following • Appointment of the Chief Executive Officer and Executive issues: Board members • Financial statements and the annual report • Compensation scheme for members of the Board of • The budget and medium-term financial plan Directors and individual remuneration in regard to the latter, • Appointment and replacement of the statutory auditors based on the maximum aggregate amount of compensation • Cash management, financing and contingent liabilities approved by shareholders at the Annual General Meeting • Fundamental tax issues • Pay scheme for members of the Executive Board and • Notification to the competent court in the event of employees over-indebtedness • Proposal (to the Board of Directors for submission at the • Internal control Annual General Meeting) of the maximum aggregate amount • Management of business and energy risks of compensation payable to the Board of Directors and the • By-laws Executive Board in the coming financial year • Compliance • Amendment of the Articles of Association in relation to the • Principles for implementation of stock exchange disclo- remuneration policy for members of the Board of Directors sure rules (ad hoc publicity and director dealings) and the Executive Board • Articles of Association, except provisions relating to remu- • Relations with pension funds neration for members of the Board of Directors and the Additionally, it falls within this Committee’s remit to deter- Executive Board mine the individual remuneration of the Chief Executive Officer • Internal audit reports and members of the Executive Board, based on the maximum • Any other matter that the Board may wish to assign aggregate amount of compensation approved by shareholders at the Annual General Meeting. It must also approve the total payroll for the coming year in preparation for negotiations between labour and management, subject to the establishment of personnel expenses by the Board of Directors in connection with the annual budget.

Romande Energie Group 2017 Annual Report 27 Special decision-making authority 3.7 Information and control instruments with regard Mention should be made of special decision-making authority. to the Executive Board In order that the Group may rapidly seize any opportunities The Board of Directors is informed of current business trends that arise, the chairs of the three committees are empowered at every meeting. Particular attention is paid to the to make decisions about the acquisition of strategic business consolidated financial statements and the accounts of assets or equity interests, provided that the outlay does not individual subsidiaries. Twice a year, the financial statements exceed CHF 10m. These transactions may not exceed the sum are accompanied by a detailed projection of estimated annual of CHF 30m per calendar year. results. Reports on holdings in which Romande Energie Group This special decision-making authority was not exercised has financial interests, together with a risk management report in 2017. covering all the Group’s activities, are also prepared by the Executive Board for the Board of Directors twice a year. 3.6 Definition of areas of responsibility between Moreover, twice per year, the Board of Directors is furnished Board of Directors and Executive Board a progress report on strategic projects. The Board of Directors exercises the non-transferable and The Executive Board submits its action plans to the Board inalienable duties set out under Article 716a of the Swiss Code of Directors. These are the basic reference documents that of Obligations. It defines corporate strategy and strategic are used by the Board of Directors to monitor Executive targets, establishes the annual budget and medium-term Board activities, supplemented with regular information on financial roadmap, determines financial policy, defines risk the main projects undertaken by the Executive Board and on policy – particularly with respect to the wholesale buying and the Group’s business developments: revenues, margins by selling of energy – and is responsible for the founding or customer segment, cash flow, capital investment, guarantees disposal of subsidiaries and the acquisition or sale of material and sureties, risks and workforce numbers. shareholdings. Pursuant to Articles 716b of the Swiss Code of Romande Energie Holding SA has an internal audit struc- Obligations and 17 of the Articles of Association, the Board of ture in place to supplement the risk management structure. Directors has delegated management of the Group to the Chief The internal auditor reports independently to the Finance and Executive Officer (CEO) under the terms of the by-laws. The Audit Committee. An internal audit charter has been drawn CEO is responsible for organising and exercising the powers of up and is applied rigorously. It is based on the international the Executive Board, in particular: making recommendations standards issued by the Institute of Internal Auditors and incor- on strategy; applying the corporate strategy and implementing porates the main precepts: “The audit helps the organisation to plans and projects; defining missions; managing the Company; accomplish its objectives by bringing a systematic, disciplined ensuring the achievement of objectives, the profitability and approach to evaluate and improve the effectiveness of risk expansion of the Company’s business, and enhancing its management, control and governance processes.” Internal reputation; preparing operating, investment and cash budgets; audits are regularly conducted with external specialists who hiring and remuneration; representing the Company in its are not the statutory auditors. dealings with third parties; and organising the flow of information The Board of Directors is kept regularly informed of the within and outside the Company. The CEO chairs the Group’s business developments and receives reports at each Management Committee, which consists of the members of the of its meetings. Executive Board plus the Corporate Secretary (who is also The minutes of Management Committee meetings are Secretary to the Board of Directors). submitted to the Chairman and Vice-Chairman of the Board The Chairman of the Board of Directors and the CEO of Directors. maintain close contact with one another in order to coordinate A daily press review is sent to each member of the Board their actions and review current business. of Directors. With regard to risk management, a description of the pro- cedures adopted in this area can be found on page 13 of this report. For more detailed information, please refer to Note 5 of the Notes to the Consolidated Financial Statements.

28 Romande Energie Group 2017 Annual Report 4 MANAGEMENT COMMITTEE

The Management Committee is comprised of the members of the Executive Board supplemented by other executives. It generally meets every fortnight, either for a full or half day. Every year, it holds four or five days of seminars devoted to current issues.

4.1 Members of the Management Committee The Executive Board, whose members are appointed by the Board of Directors, consists of the following people:

Name Position, Business unit Nationality Year of birth Member since

Pierre-Alain Urech CEO Swiss 1955 2004 CFO Denis Matthey Deputy CEO Swiss 1958 2004 CORPORATE GOVERNANCECORPORATE Patrick Bertschy Head of Networks Swiss 1968 2014 Philippe Durr Head of Romande Energie Commerce SA Swiss 1964 2013 Christian Frère Head of Energy Swiss 1959 2012 Oliviero Iubatti Head of Romande Energie Services SA Swiss 1972 2016 Jean-Daniel Habegger Head of Human Resources Swiss 1965 2011

The additional members of the Management Committee, who are empowered only to make proposals, are as follows:

Name Position, Business unit Nationality Year of birth Member since

Daniel Hammer Corporate Secretary Swiss 1970 2017

4.2 Education, career, other activities and vested interests The restrictions of paragraphs 1 and 2 do not apply in the None of the executives act as consultants for key lobbies in presence of legal entities that are controlled directly or indi- Switzerland or abroad. None of them worked for the Group or rectly by the Company or which control the Company. They any of its companies before their current duties. The careers do not apply in the presence of legal entities which are the and mandates of members of the Management Committee are occupational pension funds insuring the employees of the presented on pages 30-33. Company or companies that it controls directly or indirectly. Furthermore, multiple mandates exercised in several outside 4.3 Number of mandates permitted (Article 12(1) point 1 of legal entities among which there is direct or indirect control, Swiss Federal Ordinance on Excessive Pay) or within occupational pension funds insuring the employees Pursuant to Article 22a(2 and 3) of the Articles of Association, of these companies, only count as one mandate within the members of the Executive Board, with the agreement of the meaning of paragraphs 1 and 2. Board of Directors, may each hold the following other man- dates in the management and supervisory bodies of legal 4.4 Management contracts entities which are required to be registered in the Swiss com- Romande Energie Holding SA has not entered into any man- mercial register or a comparable foreign register: agement contracts. 1. no more than two mandates as a member of a board of directors or as a member of a supreme governing or super- visory body of companies considered as publicly traded companies, as defined by Article 727(1) point 1 of the Swiss Code of Obligations; as well as 2. no more than fifteen mandates as a member of a board of directors or member of a supreme governing or supervisory body of companies not considered as publicly traded com- panies within the meaning of the Swiss Code of Obligations and the Federal Act on Collective Investment Schemes; and 3. no more than ten mandates as a member of the board of directors or member of a supreme governing or supervisory body of other legal entities not precisely meeting the above criteria.

Romande Energie Group 2017 Annual Report 29 PIERRE-ALAIN URECH DENIS MATTHEY CEO CFO AND DEPUTY CEO Degree in civil engineering from the Swiss Federal Institute of Degree in business from the Faculty of Business and Economics Technology, Zurich; postgraduate degree from the Swiss Federal of Lausanne University; Swiss-certified accountant Institute of Technology, Lausanne Swiss citizen Swiss citizen Career Career • 1981-1987, began as auditor at PwC Zurich and KPMG Geneva • Began with Swiss Federal Railways (CFF) in management and • 1987-1990, finance and administrative director, then member of executive roles at various corporate levels the board of directors of STS (a Shipley Group subsidiary) • Head of Rail 2000 project • 1990-2002, finance and administrative director, then CEO of • Headed CFF area management in Lausanne Matthey Group (sold in 2002 to Arcelor) • 1995, member of management board and head of the • 2002-2003, finance director of an Arcelor business unit infrastructure division • From 1 January 2004, CFO of Romande Energie Group • 1999, deputy CEO of CFF SA and head of the infrastructure Mandates for non-listed companies division • Chairman of the boards of directors of Spontis SA (Avenches) • From 1 July 2004, CEO of Romande Energie Group and CISEL Informatique SA (Matran) Mandates for non-listed companies • Member of the boards of directors of Romande Energie • Chairman of the boards of directors of Forces Motrices Commerce SA (Morges), Romande Energie Services SA Hongrin-Léman SA (Château-d’Œx), Société des Forces Motrices (Morges), Société des Forces Motrices du Grand-St-Bernard SA du Grand-St-Bernard SA (Bourg-St-Pierre), Forces Motrices (Bourg-St-Pierre), Bas-Valais Energie SA (Vouvry), neo de l’Avançon SA (Bex), DransEnergie SA (Orsières), technologies SA (Lausanne), DransEnergie SA (Orsières), Romande Energie Commerce SA (Morges) and Romande Energie HYDRO Exploitation SA (Sion) and Chauffage Bois-Energie Services SA (Morges) Anzère CBA SA (Ayent) • Member of the boards of directors of CFF SA (Bern) and Télé Mandates for other legal entities Villars--Diablerets SA (Villars-sur-) • Chairman of the Assura Foundation (Lausanne) Other activities • Board member of Romande Energie pension fund (Morges) • Committee member of regioGrid (federation of cantonal and regional power suppliers) and member of the Vaud Canton energy commission

30 Romande Energie Group 2017 Annual Report CORPORATE GOVERNANCECORPORATE

PATRICK BERTSCHY PHILIPPE DURR HEAD OF NETWORKS FROM APRIL 2016 HEAD OF ROMANDE ENERGIE COMMERCE SA Degree in electrical engineering from the Fribourg School of Master’s degree in microtechnology from the Swiss Federal Engineering; Executive MBA from the Fribourg School of Institute of Technology, Lausanne; executive management Management training from the European Institute of Business Administration Swiss citizen (INSEAD), Fontainebleau Swiss citizen Career • 1996-2000, project engineer and project manager at ABB Career • 2000-2001, technical director at Glas Troesch • Began career as a consultant and manager at Andersen • 2001-2006, head of energy customers, then head of sales at Consulting (Accenture) Gruyère Energie SA (Bulle) • 1995-2000, head of marketing at Landis & Gyr Communications • 2006-2014, head of Morat public utilities • 2000-2008, sales director and member of senior management • 2014-2016, head of the Energy Services business unit of at Geneva public utilities Romande Energie SA (Morges) • 2008-2010, CEO of Mistral Engines (CH/USA) • From 1 April 2016, head of the Networks business unit of • 2011-2012, independent consultant closely involved in the roll-out Romande Energie SA of electric mobility solutions in Western Switzerland • From 1 January 2013, head of Romande Energie Commerce SA Mandates for non-listed companies (Morges) • Chairman of the board of directors of Effitec SA (Morges) • Member of the boards of directors of Bas-Valais Energie SA Mandates for non-listed companies (Vouvry), B-Valgrid SA (Sion), Forces Motrices de l’Avançon SA • Chairman of the board of directors of neo technologies SA (Bex) and AGEPP SA (Lavey-Morcles) (Lausanne) • Member of the boards of directors of Bas-Valais Energie SA (Vouvry), Romande Energie Services SA (Morges) and CISEL Informatique SA (Matran)

Other activities • Vice-president of the Crans-près-Céligny local council

Romande Energie Group 2017 Annual Report 31 CHRISTIAN FRÈRE OLIVIERO IUBATTI HEAD OF ENERGY HEAD OF ROMANDE ENERGIE SERVICES SA Degree in physics from the University of Essen, Germany; Degree in thermal and industrial engineering; Executive MBA doctorate in natural sciences Swiss citizen Swiss citizen Career Career • Over 15 years of experience in the energy-services and • From 1989, various positions in industry as advisor and renewable-energy sectors; member of the executive board of chief project engineer, notably at Rheinmetall (Düsseldorf) Alpiq InTec AG, head of Alpiq InTec in Western Switzerland, and RWE (Essen) Ticino and Italy, as well as country manager at Alpiq Italia • 1998-2003, member of senior management, then CEO • From 2016, head of the Energy Services business unit at of Von Roll Environnement Romande Energie SA (Morges) • 2004-2005, independent consultant • From 1 January 2017, head of Romande Energie Services SA • 2005-2012, oversaw business development and investment in (Morges) power generation and transmission facilities in Switzerland Mandates for non-listed companies and abroad for EGL (Dietikon), seconded to various • Chairman of the boards of directors of Neuhaus Energie SA subsidiaries or associates of EGL Group (Echandens) and Effitec SA (Morges) • From 2012, head of the Energy business unit at • Member of the board of directors of Cadcime SA (Eclépens) Romande Energie SA (Morges)

Mandates for non-listed companies • Chairman of the board of directors of Eoliennes de Provence SA (Provence) • Vice-chairman of the board of directors of VO RE-Nouvelable SA (Orbe) • Member of the boards of directors of Forces Motrices Hongrin-Léman SA (Château-d’Œx), Gazobois SA (), Société Electrique des Forces de l’Aubonne SA (Aubonne) and EnergeÔ SA (Vinzel) • CEO of Romande Energie France SAS (Paris) • Chairman of the boards of directors of Centrale Hydroélectrique de Meyronnes SAS (Meyronnes, France) and REF Eolien SAS (Paris, France)

32 Romande Energie Group 2017 Annual Report CORPORATE GOVERNANCECORPORATE

JEAN-DANIEL HABEGGER DANIEL HAMMER HEAD OF HUMAN RESOURCES CORPORATE SECRETARY, MEMBER OF THE MANAGEMENT Swiss VET certificate for business employees; degree in human COMMITTEE resources management; advanced training in HR management Law degree; executive qualification in corporate communications at CRQP; business administration course at CRPM, an (SAWI); course in negotiating skills at Harvard Law School; in-service training college Certificate of Advanced Studies from the University of Applied Swiss citizen Sciences and Arts Western Switzerland and from Bern University of Applied Sciences in Public Affairs and Lobbying Career Swiss citizen • 1984, began at Société Romande d’Electricité (SRE) • From 1997, various positions in the Romande Energie HR Career department (personnel administration, head of recruitment • 1997-1998, research assistant at the Institute of Federalism, and internal mobility) Fribourg University • 2002-2011, HR delegate and deputy Group human resources • 1999-2007, city clerk for the Lausanne City Council manager • 2007-May 2017, corporate secretary for Swiss Media, the • From 1 December 2011, head of Human Resources umbrella association of private media companies in French- speaking Switzerland Mandates for other legal entities • From 1 June 2017, Corporate Secretary for Romande Energie • Board chairman of Romande Energie ordinary and Group supplementary pension funds (Morges) Mandates for non-listed companies • Member of the boards of directors of Romande Energie Commerce SA (Morges) and Bas-Valais Energie SA (Vouvry)

Other activities • Member of the Pully local council

A WORD OF THANKS Karin Devalte left Romande Energie Group at the end of July 2017 after nine years as head of Corporate Communications and member of the Management Committee, having served with an unwavering sense of loyalty and duty. Her strong professional expertise, vast experience and sharp analytical skills were valued by everyone who worked with her. Romande Energie would like to thank Ms Devalte for her service and dedication to the Group. She is succeeded by Michèle Cassani, who has assumed corporate communications responsibilities since 19 September 2017.

Romande Energie Group 2017 Annual Report 33 5 COMPENSATION, SHAREHOLDINGS AND LOANS

Please refer to Chapter 3, Remuneration report, page 39.

6 SHAREHOLDERS’ PARTICIPATION

6.1 Voting-right and representation restrictions 6.3 Convening of the Annual General Meeting All shares entitle the holder to one vote. There are no of shareholders restrictions on voting rights. This is governed by law, but one or several shareholders Pursuant to Article 12(4 and 5) of the Articles of Association, representing together no less than 5% of the share capital may a shareholder may be represented by the independent proxy also request the convening of a general meeting. The Annual or a third party. General Meeting of shareholders is convened by way of a In 2010, the Articles of Association were amended to notice published in the Swiss Official Gazette of Commerce comply with the Federal Act on Book-Entry Securities, which at least 20 days prior to the appointed date, and by way of an entered into force on 1 January 2010. individual notice sent to shareholders entered in the share The Articles of Association contain no clauses deviating register. An advance notice is published approximately three or supplementing the statutory provisions with regard to months before the date of the meeting. independent proxy instructions. Neither do they contain rules relating to participation in the Annual General Meeting by 6.4 Inclusion of items on the agenda electronic means. One or several shareholders representing shares with an aggregate nominal value of CHF 1m or 5% of the share capital 6.2 Quorums and qualifying majorities may request that an item of business be entered on the Shareholders at the Annual General Meeting pass resolutions agenda. This request must be made to the Board of Directors and conduct elections by a simple majority of the voting rights in writing no later than thirty days before the date of the represented. Abstentions and blank or spoilt votes are not Meeting, indicating the purpose of the debates and the motions taken into consideration in the calculation of the majority. This submitted. does not apply to subjects requiring two-thirds of the voting rights represented, pursuant to Article 704(1) of the Swiss 6.5 Entry in the share register Code of Obligations. Shareholders must be registered in the share register no later than eight to ten days before the appointed date in order to take part in the Annual General Meeting or appoint a proxy. The deadline is shown in the official notice convening the Meeting and in the individual notice sent to shareholders.

7 CHANGES OF CONTROL AND DEFENCE MEASURES

7.1 Duty to make an offer 7.2 Clauses on changes of control There is no provision for this in the Articles of Association. This is not covered by any clause in the Articles of Association. There is no opting-out or opting-up clause. Vaud Canton, Nor is there any agreement or programme benefiting the Banque Cantonale Vaudoise, 119 Vaud municipalities and the members of the Board of Directors or the Executive Board in intercommunal power company SIE SA are parties to a such cases. The employment contract of the CEO can be shareholders’ agreement providing for reciprocal pre-emptive terminated by either party by giving one year’s notice as from rights to their shares. These shareholders hold 57.87% of the the end of the current month. The notice period for other capital and total voting rights. Executive Board members is six months as from the end of the current month.

34 Romande Energie Group 2017 Annual Report 8 AUDITING BODY

8.1 Duration of the contract and term of office examining this corporate governance chapter, reviewing the of the lead auditor remuneration report and preparing auditors’ reports. The Board Ernst & Young SA were the statutory auditors of Romande of Directors decided at the end of 2011 that the external auditors Energie Group from the 1997 to the 2015 financial years. would no longer provide advisory or support services for the Previous to this, the statutory auditors were Société Fiduciaire internal audit department in order to ensure the complete Lémano, part of the same group. Shareholders at the 2016 separation of internal and external auditing. Annual General Meeting elected Deloitte SA, in Lausanne, as the new statutory auditors. The auditor responsible for the 8.4 Informational instruments pertaining to contract is Fabien Bryois. The maximum rotation period for an external audit lead auditors is seven years, as required by law. See details on the Finance and Audit Committee under Point 3.5. GOVERNANCECORPORATE The auditors receive all the documentation that is prepared 8.2- Auditing fees and additional fees for every meeting of the Finance and Audit Committee. In 2017, 8.3 The fees charged by Deloitte SA are as follows: the statutory auditors took part in two Committee meetings.

CHF Their comments are all submitted to the Committee for Auditing of financial statements 246 207 verification. The auditors’ work is totally independent of the Other advisory services – Board of Directors and the Executive Board. The auditors’ Total 246 207 fees and services are also checked by the Finance and Audit Committee, which submits a report to the Board of Directors. Audit services comprise the basic work required each year to The auditors fully guarantee their professional qualification audit the accounts of individual Group companies and the as required for a listed company. They have the necessary consolidated financial statements of Romande Energie Group. resources available to fulfil their mission. This includes services rendered by auditors in connection with pension plans and supervision of the implementation or updating of accounting methods. This work also covers

9 INFORMATION POLICY

Romande Energie Group pursues an open information policy in A financial calendar containing the publication dates for the keeping with its size and importance. The communication annual and interim financial statements and the annual report, as measures adopted by the Group are designed to enhance its well as the date of the press conference, is posted on the Group’s credibility and public image. Particular care is also taken to ensure website early in the year. An events calendar for the current that executives are provided with timely, accurate information to financial year and contact addresses are shown on the penultimate enable them to carry out their leadership responsibilities. page of this report. Shareholders of Romande Energie Holding SA are kept informed of the basic aspects of the Group’s business by the annual report, The following links can be used to subscribe to our Alert the interim report and press releases. Sensitive data that may Service, where you can select the type of news you would affect the share price is disclosed on an ad hoc basis in accordance like to receive: with the relevant directives of the SIX Swiss Exchange. Information is compiled by the Corporate Communications In French department and the Investor Relations team. Information about the http ://investor.romande-energie.ch/site-services/alert-service. Group is also posted on the internet at www.romande-energie.ch. aspx ?sc_lang=fr-FR Official notices are published in the Swiss Official Gazette of Commerce; notices convening the Annual General Meeting are In English sent personally to shareholders entered in the share register. http ://investor.romande-energie.ch/site-services/alert-service. aspx ?sc_lang=en

Romande Energie Group 2017 Annual Report 35 10 ROMANDE ENERGIE GROUP DIRECTIVE ON THE FIGHT AGAINST BRIBERY AND CORRUPTION

Romande Energie Group acts responsibly towards its customers, Offering reasonable gifts to or accepting such gifts from public business partners, civil society and its employees. It is committed officials or persons operating in the private sector is permitted, but to establishing an atmosphere of trust with its customers and care should be taken when offering or accepting gifts which could business partners and conducting business fairly, in accordance be perceived as inappropriate or place the recipient under an with the principles of free competition and applicable laws and obligation. Soliciting gifts is prohibited. In particular, gifts include regulations. invitations to meals, shows or other entertainment, as well as Romande Energie Group operates a zero-tolerance policy on presents. bribery and corruption. The basic principles are set out in a Code Whether or not a gift is permissible depends on the intention of of Business Conduct. the person offering it. If it is offered with the aim of influencing a The Swiss Criminal Code has extended the notion of bribery to decision or obtaining an advantage, this behaviour constitutes an employees of a private-sector company. If found guilty of this act of bribery. On the other hand, a reasonable gift offered with the offence, not only they themselves but the company as well will be intention of enhancing commercial relations or marking special held responsible. Employees committing bribery may also be occasions is not considered bribery. personally liable to serious criminal and civil sanctions that may Consequently, an upper limit of CHF 200 has been set. The include substantial fines and even imprisonment. value of a gift received from an outside party must therefore be Accordingly, the Board of Directors in early 2017 adopted the below this amount. Gifts worth more must be turned down. Cash Romande Energie Group Directive on the Fight against Bribery or gift vouchers may never be accepted. If in doubt, the employee and Corruption, which contains the associated basic principles. or business partner should always consult their line manager or The Directive applies to all employees and business partners of contact person at the company. Romande Energie and must be communicated to them at the start The Directive applies to all companies over which Romande of the employment or business relationship, and as often as Energie Holding SA has majority control, either directly or indirectly. necessary thereafter.

36 Romande Energie Group 2017 Annual Report Deloitte SA Avenue de Montchoisi 15 PO Box 460 1006 Lausanne Switzerland

Tel: +41 (0)58 279 92 00 Fax: +41 (0)58 279 93 00 www.deloitte.ch

Report in relation to the Review of Corporate Governance Disclosures CORPORATE GOVERNANCECORPORATE To the Board of Directors of Romande Energie Holding SA, Morges

You engaged us to review the corporate governance disclosures of Romande Energie Holding SA made pursuant to the Corporate Governance Directive of the SIX Swiss Exchange for the year ended 31 December 2017. These disclosures are made in a separate section, on pages 16 to 36 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.

A review, which provides less assurance than an audit, seeks to obtain moderate assurance about whether the corporate governance disclosures are complete and free from material misstatement. A review is limited primarily to inquiries of company personnel that participated in the preparation of the disclosures, to reviews of pertinent documents, and analytical procedures related to the corporate governance disclosures. In addition, we have requested a representation letter. We have not performed an audit, and, accordingly, we do not express and audit opinion.

In our opinion, the corporate governance disclosures comply with the formal requirements of the Directive Corporate Governance. During our review, nothing has come to our attention that causes us to believe that the disclosures are not complete or contain material misstatements.

Deloitte SA

Fabien Bryois Jürg Gehring Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Lausanne, 13 April 2018

Romande Energie Group 2017 Annual Report 37