corporate governanceir2.flife.de/data/romande/igb_html/pdf/1000005_e.pdfthis report complies with...

CORPORATE GOVERNANCE

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The following is an English translation of the original French text «Gouvernement d’entreprise». The official French text is the only authentic version recognized by Romande Ernergie Group.

2 Romande Energie Group Corporate Governance 2013

1 Group structure and shareholdersMost of the Group’s business consists of the generation, distribution and marketing of electricity, along with energy services. 1.1.1 Operational structure of Romande Energie Group

As at 31 December 2013, the operational structure of Romande Energie Group was comprised of three opera-ting areas, namely the Networks business unit, the Energy business unit and Romande Energie Commerce along with four support areas which were the Finance depart-ment, the Human Resources department, the Corporate Secretary’s office and the corporate communications team. From 1 January 2014, a new area of operations has been incepted in the shape of the Energy Services business unit. The diagram opposite indicates the Group’s organisational structure as from this date.

1.1.2 - Legal structure of Romande Energie Group1.1.3 Romande Energie Holding SA, whose head office is in

Morges (rue de Lausanne 53, postcode 1100), Switzer-land, is the top holding company of Romande Energie Group. Its securities are listed on the SIX Swiss Exchange in Zurich under security number 2.560.733 and ISIN code CH 0025607331. It was established in 1901 under the corporate name Compagnie vaudoise des Forces motrices des lacs de Joux et de l’Orbe and was origi-nally listed on the Lausanne Stock Exchange. Excluding holdings of own shares, market capitalisation amounted to CHF 1.093 billion as at 31 December 2013.

Romande Energie Holding SA has no actual operations.

Romande Energie Holding SA is the only Group company whose shares are listed on the stock ex-change. The list of companies that are part of the consolidation of Romande Energie Holding SA as at 31 December 2013 is shown in Note 35 of the notes to the consolidated financial statements, on page 83 of the Rapport de Gestion 2013. (only French)

Romande Energie fulfils the statutory and regulatory provisions applicable in Switzerland with regard to corporate governance. This report complies with the terms of the Directive on Information relating to Corporate Governance, issued by SIX Exchange Regulation on 29 October 2008, and uses the numbering system thereof. Additionally, it takes into account the Swiss Code of Best Practice for Corporate Governance (2007 edition). Supplementary information is contained in the report on compensation. Unless stated otherwise, the information contained herein relate to dealings as at 31 December 2013.

On 31 March 2014, auditors Ernst & Young SA issued a statement according to which, in its opinion, the report on corporate governance and remuneration meet the formal requirements of the directive on corporate-governance information and that, during its review, it did not note any effect that would lead it to conclude that the information reported is not complete or shows material errors.

At Romande Energie, corporate governance is guided by the core values of transparency and loyalty. Through this approach, we seek to inspire confidence from our stakeholders, whomsoever they are. Furthermore, the principles of corporate governance in place at Romande Energie aim to sustain profitability in the long run while also safeguarding the interests of our shareholders, customers and business partners.

3Romande Energie Group Corporate Governance 2013

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Unité d’affaires Services énergétiques

Patrick Bertschy1

Corporate SecretariatLegal Affairs and Audit

Pierre Oberson 2

Finance, IT and PurchasesDenis Matthey 1

Manager and Deputy CEO

CEOPierre-Alain Urech 1

ChairmanGuy Mustaki

Corporate Communications

Karin Devalte 2

Human Resources, General Services and

SecurityJean-Daniel Habegger 1

Networks Business UnitPhilippe Verburgh 1

Energy Business UnitChristian Frère 1

Romande Energie Commerce SA

Philippe Durr 1

Energy Services Business Unit

Patrick Bertschy 1 + 3

SUPPORT SERVICES

OPERATIONS

1 Member of the Executive Board2 Member of the Board of Directors3 Took up position in H1 2014

Group’s organisational structure As at 1 April 2014


* EOS Holding SA has a 31.38% interest in Alpiq Holding SA

Equity interest exceeding 50%

Equity interest equal to or lower than 50%

Equity interest exceeding 50%

Equity interest equal to or lower than 50%

* EOS Holding SA has a 31.38% interest in Alpiq Holding SA

Group legal structureAs at 1 April 2014


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ROMANDE ENERGIE HOLDING SA Top holding company of Romande Energie Group, shares of which are listed on SIX Swiss Exchange in Zurich. Owns equity interests, real property and intellectual property rights

ROMANDE ENERGIE SA Group‘s operating company. Conventional hydro-power generation, owns and manages distribution grids, manages energy portfolios, offers energy services and provides servi-ces to Group companies

ROMANDE ENERGIE COMMERCE SA Joint venture. Markets power and manages customer bases of partner Distribution System Operators (DSO)

ROMANDE ENERGIE RENOUVELABLE SA Company dedicated to novel sources of renewable energy. Owns interests and assets in the fields of wind power, solar power, biomass, small-scale hydro-power and geothermics

EOS Holding SA Manages interest in Alpiq and planned natural-gas plant in Chavalon (VS). Owns interests in wind-power firms opera-ting in France and Germany

Forces Motrices Hongrin-Léman SA Owns pump-turbine facilities in Hongrin-Veytaux

Centrale Thermique de Vouvry SA Developing a combined-cycle natural-gas plant with output of 400MW in Chavalon area (VS)

Société des Forces Motrices du Grand-St-Bernard SAOwns hydro-power facilities on Toules-Pallazuit lake (VS)

DransEnergie SAOffers maintenance services for hydro-power installations and distribution grids. Provides services to outside parties

Bas-Valais Energie SA Formed in June 2012 through merger of Société Electrique du Bas-Valais SA and Société Electrique de Champéry – Val-d’Illiez SA. Owns distribution grids plus hydro-power facilities on Tanay-Vouvry lake

Forces Motrices de l’Avançon SA Owns and manages distribution grids; owns and operates La Peuffeyre-Sublin and Benjamine hydro-power facilities; also active in multimedia distribution

Effitec SA Provides audits of indoor electrical installations

Tecfor SA Geothermal/geotechnical drilling

HYDRO Exploitation SA Offers maintenance services for hydro-power installations

CISEL Informatique SA Computer services provider owned jointly by Romande Ener-gie, Groupe E and Alpiq

neo technologies SA Computer services company owned jointly by Romande Energie, Lausanne City Council and the municipality of Lutry

Société Electrique des Forces de l’Aubonne SA Owns and operates distribution grids and hydro-power faci-lities on Aubonne river; markets electricity, indoor electrical installations and multimedia services

vo energies holding SA Owns and operates distribution grids and hydro-power faci-lities on Jougnenaz and Orbe rivers; markets electricity, indoor electrical installations and multimedia services

Spontis SA Joint venture between Romande Energie, BKW, Groupe E and Lausanne City Council. Standardisation, supply chain and logistics on behalf of business partners

SITEL SA Company controlled by upc cablecom Sàrl. Owns cable tele-vision networks and provides multimedia services

Forces Motrices de Sembrancher SA Owns hydro-power facilities on the Dranse river

Holdigaz SA Owns and operates natural-gas distribution pipelines; advi-ses on building techniques and offers energy services

Energie Solaire SA Thermal solar solutions

Enerbois SA Owns and operates a plant for producing electricity, heat energy and pellets from wood by-products

Brent Energia SA Owns hydro-power facilities in Brent area

Eoliennes de Provence SAPartnership with Zurich City Council (ewz, the city‘s energy provider). Developing wind farm project in the Provence municipality in Switzerland

St-Gingolph Energia SAOperates turbines on St-Gingolph drinking-water network

Gazobois SAJoint venture with Holdigaz SA. Developing wood-based methanation project

VO RE-Nouvelable SAJoint venture with vo energies holding SA. Owns and deve-lops production installations fired by novel sources of rene-wable energy

Agrogaz Lignerolle SAOwns power plant fuelled by wet biomass

Romande Energie France SASSimplified joint-stock company under French law. Owns and acquires interests in firms generating from renewable energy sources in France

Meyronnes SASSimplified joint-stock company under French law. Owns hydro-power facilities on the Ubaye river, Alpes-de-Haute-Provence region

Alpiq Holding SA Founded in 2008 as a result of merger between Atel and EOS along with the Swiss assets of EDF. Generates power in Switzerland and abroad; trades and markets energy; provi-des energy services


2 Capital structure2.1 Capital The ordinary share capital of Romande Energie Holding SA

amounts to CHF 28.5 million and is divided into 1,140,000 registered shares with a nominal value of CHF 25 each. There is an authorised capital of CHF 10.125 million. Romande Energie Holding SA has no conditional capital.

2.2 Authorised capital The Board of Directors has an authorised capital of CHF

10.125 million, consisting of 405,000 registered shares with a nominal value of CHF 25 each, approval of which was renewed by a resolution made at the Annual Gene-ral Meeting on 25 May 2012. This resolution expires on 25 May 2014. Renewal of this authorisation is due to be sought again at the AGM in 2014. Under Article 6 of the Articles of Association, the terms and conditions for subscription of authorised capital are as follows:

The Board of Directors shall decide the price and paying-in method (payment in cash, by set-off, in kind or by takeover of assets). The Board of Directors may exclude the pre-emptive rights of shareholders and confer them on third parties if the new shares are used for the acquisition of companies, parts of companies, equity interests or new investment projects in the energy field or related sectors, or to finance such tran-sactions, or for employee profit-sharing schemes.»

2.3 Changes in capital during the past three years None.

2.4 - Shares, participation and dividend-right certificates

2.5 The share capital is formed solely of registered shares. All shares are vested with the same ownership and voting rights. There are no restrictions on the transferability of shares. The company has no liabilities in regard to par-ticipation and dividend-right certificates, or concerning convertible bonds. Net profit may be freely allocated by the Annual General Meeting subject to the provisions of Article 24 of the Articles of Association, which partly incorporate Article 671 of the Code of Obligations, according to which: «Five percent of the profit for the financial year shall be allocated to the general reserve until the reserve reaches twenty percent of the share capital». The following items shall also be allocated to this reserve even if it has reached the statutory limit: 1. After payment of issuance costs, the proceeds of

shares issued that exceed the nominal value, inas-much as they are not allocated to amortisation or to pension objectives.

2. The balance of the payments made on cancelled shares, less the loss that would have been incurred on shares issued in their stead.»

As Romande Energie Holding SA is a holding company, Articles 671(2)(3) and 671(3) of the Code of Obligations do not apply.

1.3 Cross-shareholdingsRomande Energie Holding SA has no knowledge of cross-shareholdings, on either side, exceeding 5% of equity or shares in their entirety with voting rights. No-tably, it does not own shares in its significant sharehol-ders, namely Groupe E SA (Fribourg), Banque Cantonale Vaudoise (Lausanne) or BKW Energie AG (Bern). Nor is there any cross-representation on the boards of directors of listed companies. However, Romande Energie Holding SA owns a 2.52% interest in Holdigaz SA, which owns a 2.52% interest in Romande Energie Holding SA. It should also be stated that Romande Energie SA, a subsidiary company of Romande Energie Holding SA, owns a 29.71% interest in EOS Holding SA, which in turn owns 31.38% of Alpiq Holding SA. Guy Mustaki, Chairman of the Board of Di-rectors of Romande Energie Holding SA, also chairs the board of EOS Holding SA and sits on the Board of Direc-tors of Alpiq Holding SA. Jean-Yves Pidoux, a member of the Board of Directors of Romande Energie Holding SA, also sits on the Board of Directors of EOS Holding SA as the director representing Lausanne City Council, and is a member of the Board of Directors of Alpiq Hol-ding SA. Michael Wider, a member of the Executive Board of Alpiq Group, is a member of the Board of Direc-tors of Romande Energie Holding SA.

1.2 Significant shareholdersAs at 31 December 2013, the significant shareholders ente-red in the share register of Romande Energie Holding SA were as follows:

31 December 2013Vaud Canton* 440 047 shares* 38.60 %Vaud municipalities * 160 155 shares* 14.05 %Banque Cantonale Vaudoise **, Lausanne 38 831 shares ** 3.41 %Romande Energie Holding SA, Morges 113 437 shares 9.95 %Groupe E SA, Fribourg 66 080 shares 5.80 %BKW Energie AG, Berne 57 019 shares 5.00 %Holdigaz SA, Vevey 28 737 shares 2.52 %Free float 235 694 shares 20.67 %Total 1 140 000 shares 100 %

* Parties to an agreement relating to reciprocal pre-emptive rights

** Of which 9,900 shares tied to an agreement relating to reciprocal pre-emptive rights


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Movements inShare Capital

General reserve

Reserve for own

sharesRetained earnings

Total shareholders’

equityshareholders’ equity CHF 000

Balance as at 1 January 2011 28 500 5 859 19 849 510 975 565 183Net profit 80 990 80 990Dividend paid -27 445 -27 445Balance as at 31 december 2011 28 500 5 859 19 849 564 520 618 728Net profit 150 446 150 446Dividend paid -27 446 -27 446Balance as at 31 december 2012 28 500 5 859 19 849 687 520 741 728Net profit 117 360 117 360 Acquisition of own shares 79 227 -79 227 Dividend paid -27 717 -27 717 Balance as at 31 december 2013 28 500 5 859 99 076 697 936 831 371

The Board of Directors of Romande Energie Holding SA, which acts concurrently as the Board of Directors of Ro-mande Energie SA, sets out the Group’s strategy, exercises top-level supervision on the implementation of this strategy and is the final governing body of the Group. Under its by-laws, it also comprises three special committees.

3.1 Members of the Board of Directors

The Board of Directors comprises 11 members:

NameYear of

birth Since

Expiry of term

of officeBoard

functions Committee functions

Guy Mustaki * 1960 2005 2016 Chairman Chairman, Strategy and Corporate DevelopmentWolfgang Martz 1954 2003 2014 ** Vice-Chairman Chairman, Appointments and Human Resources Laurent Ballif * 1951 2007 2016 Director Member, Appointments and Human ResourcesLaurent Balsiger * 1970 2013 2016 Director Member, Appointments and Human ResourcesChristian Budry 1957 2003 2014 ** Director Chairman, Finance and AuditPaola Ghillani * 1963 2009 2015 Director Member, Finance and AuditBernard Grobéty 1950 2002 2014 ** Director Member, Finance and AuditJean-Jacques Miauton 1951 1997 2014 ** Director Member, Strategy and Corporate DevelopmentJean-Yves Pidoux * 1956 2007 2016 Director Member, Appointments and Human ResourcesAlphonse-Marie Veuthey * 1965 2011 2014 Director Member, Finance and AuditMichael Wider 1961 2012 2014 ** Director Member, Strategy and Corporate Development

Resigned in 2013

Daniel Schmutz * 1943 1992 2013 Director Member, Strategy and Corporate Development

* Director appointed by the Vaud Cantonal Government (Art. 762 CO and 16 of Articles) The expiry of their terms of office falls under the remit of the Cantonal Government** The term of office is affected by the entry into force of the Swiss federal ordinance on excessive pay (commonly known as the

3 Board of Directors All Board members are Swiss citizens. They have no

executive management role within the companies of Romande Energie Group and have not performed any such role over the past three years. Furthermore, they have no close business ties with any of these compa-nies.

The Board of Directors carried out a self-assessment on the competency of its members in 2013.

.

2.6.1 Limitations on transferability and nominee registrations

The following rules apply:• There are no transfer restrictions on registered

shares;• Natural and legal persons are registered with no

limitation on voting rights;• Fiduciary registrations are entered without voting

rights;• General authorisations for registration are accepted;• The Company does not print applications for registra-

tion;• The Company no longer prints paper certificates;• Nominee SIS (NS): with no entry in the share register• AREG-data compatible (electronic transmission)

The Articles of Association have been amended to

comply with the requirements of the Federal Act on Book-Entry Securities, which entered into force early in 2010. The Company offers shareholders the oppor-tunity to deposit shares at SIX-SAG free of charge.

2.6.2 - Reasons for granting exceptions in the year under review

2.6.4 Admissibility of nominee registrations Procedure and conditions for cancelling statutory

privileges and Limitations on transferability The Articles of Association do not contain any specific

provisions concerning these points.

2.7 Convertible bonds and options Romande Energie Holding SA has not issued any

convertible bonds or options.


Guy Mustaki * ChairmanDoctorate in law from Lausanne University. Licensed to practice law. Guy Mustaki is a practising lawyer and has been lecturing on commercial law, corporate law and corporate governance at the University of Lausanne since 1991. He has been a member of the board of Romande Energie Holding SA and Romande Energie SA since the 2005 Annual General Meeting and took over the chairmanship on 19 May 2006. He also chairs the Strategy and Corporate Development Committee. In the power industry, Mr Mustaki is chairman of EOS Holding SA (Lausanne). He is a board member of Alpiq Holding SA (Lausanne), for which he chairs the appointments and compensation committee. He is a director and member of the executive committee of Grande Dixence SA (Sion), and chairs the steering com-mittee for the new hydroelectric plant project on the Rhône at Bex-Massongex. He sits on the boards of Lausanne Palace SA (Lausanne), Société immobilière du Château d’Ouchy SA (Lausanne), Vavite Holding SA (Lausanne) and Rahm & Cie SA (Lausanne). He is also a committee member of the Foundation for corporate law at the Uni-versity of Lausanne (Chavannes-près-Renens), the Théodora foundation (Lonay), the Chassot and Guex foundation for medical ethics (Lausanne) and the Théâtre du Jorat foundation (Mézières). He is a member of the economic council of Vaud canton.

Wolfgang Martz Vice-ChairmanDegree in agronomy from the Swiss Federal Institute of Technology in Zurich. After first working in the development aid sector in Africa for four years, Mr Martz joined the dairy division of Nestlé (Nestec) for a further four years before becoming a partner in a management consultancy, where he spent another four years. He was appointed CEO of the Minoteries Group in April 1990, a position which he occupied until 2005. A member of the Board of Romande Energie Holding SA and Romande Energie SA since 2003, he became Vice-Chairman in 2004, and chairs the Appointments and Human Resources Committee. He attends all the meetings of the Strategy and Corporate Development Committee. In the power industry, Mr Martz is a Board member of Romande Energie Com-merce SA and EOS Holding SA (Lausanne). He is chairman of the boards of La Construction SA Enterprise Générale (Yverdon-les-Bains), the Vaud Cantonal Pension Fund (Lausanne) and Société Coopérative Immobilière Montreux (SOCIM, Montreux), vice-chairman of the Bex Salt Mines (Bex) and the Centre Romand de Promotion du Management (CRPM, Lausanne), and a board member of Schenk Holding SA (Rolle). He is vice-chairman of the Swiss Employers’ Federation and the Vaud Chamber of Commerce and Industry.

Laurent Ballif *Political science degree from Lausanne University. Diploma in sports management from the Swiss Graduate School of Public Administration (IDHEAP) in Lausanne. Laurent Baliff began his career as a journalist in Montreux and then worked for nearly twenty years as a swimming instructor in Vevey. After training to become a national coach, he went on to play a leading role in this sport. Mr Ballif has been active in politics since the mid-1980s, and served as cantonal secretary of the Vaud Socialist Party for seven years before working as secretary general of IDHEAP from 1995 to 2000. He became a member of the Vaud Cantonal Par-liament in 1994 and was elected to the Vevey municipal council in 2001. Since then he has devoted himself exclusively to political duties. He joined the Board of Romande Energie Holding SA and Romande Energie SA in 2007, and is a member of the Appointments and Human Resources Committee. Mr Ballif is chairman of the «Vevey, ville d’images» foundation and sits on the boards of the Inter-municipal pension fund and the Vevey arts and events foun-dation.

3.1 - 3.2 Education, career, other activities and vested interests


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Laurent Balsiger *Degree in environmental engineering from the Swiss Federal Institute of Tech-nology, Lausanne. Certificate in public administration from the Swiss Graduate School of Public Administration, Lausanne. From 1994 to 2000, he worked as an environmental engineer for ESA Consultores (Honduras), Sulzer Chemtech and CSD Ingénieurs Conseils SA. He was service director for the public works and utilities division of the town of Pully between 2001 and 2013. Since 1 June 2013, he has headed up the energy directorate in Vaud canton. Mr Balsiger has been a board member of Romande Energie Holding and Romande Energie SA since 2013, and is a member of the Appointments and Human Resources Committee. In addition to his professional activities, he is a parish councillor and member of the Epalinges town council.

Christian BudryGraduate in economics and social sciences from Fribourg University. Swiss certi-fied accountant. Mr Budry started his career with Ernst & Young SA as an auditor.He was then made a partner and director of the audit department for Western Switzerland before being appointed head of “Manufacturing, Technology & Energy” for the Swiss market (1983-2001). He was CFO and a member of the executive committee of Bobst Group, Prilly, from 2001 to 2011. Mr Budry joined the Board of Romande Energie Holding SA and Romande Energie SA in 2003 and has chaired the Finance and Audit Committee since 1 January 2005. In the electricity field, he is a member of the board of directors and audit commit-tee of EOS Holding SA (Lausanne). He is also a board member at Publigroup SA (Lausanne), for which he chairs the audit committee, at the Vaud cantonal pen-sion fund (Lausanne), and at CFO Solutions SA (Lausanne) and Techdata (Bern), companies which he also chairs, Giovanna Holding SA (Montreux), Gonthier & Schneeberger (Lausanne) and the group comprised of the firms Chanadela SA, Cadris SA, Cofi dep SA (Boncourt) and Domofen SA (Courgenay). He is still chair-man of the Novandi foundation (Boncourt) and sits on the board of the Greenbrix Investment Foundation (Geneva). Since February 2014, he has chaired the board of directors at Groux arts graphiques SA (Mont-sur-Lausanne). He is member of the Oron local council.

Paola Ghillani *Degree in pharmacy from Lausanne University. Diploma in International General Management for Executives, IMD. International Program in Board Management, IMD. After starting her career at Ciba/Novartis and spending the first part of her professional life with multinational companies, Ms Ghillani became CEO of the Max Havelaar Foundation, a leading organisation in the fair trade field, in 1999. During the same period, she was a board member of FLO International (Fair Trade Labelling Organisations), where she served as chair from 2001 to 2005. In 2005, Ms Ghillani founded her own company, Ghillani & Friends SA, which advises on corporate strategy and management as well as promoting and implementing sustainable development and ethics in business. Ms Ghillani is a board member of Romande Energie Holding SA and Romande Energie SA and has sat on the Finance and Audit Committee since 2009. Ms Ghillani sits on the boards of Migros cooperative (Zurich), Helvetia Holding AG (St Gallen), Transitec Ingénieurs-Conseils SA (Lausanne), the International Commit-tee of the Red Cross (ICRC, Geneva), the board of the Chênes foundation (Van-dœuvres). She also sits on expert panels advising sustainable investment funds.

* Appointed by the Vaud Cantonal Government


Bernard GrobétyCertified in accounting and financial control. Bernard Grobéty was deputy general manager of the financial division of Vaudoise Assurances. He has spent the greater part of his career with this company, which he joined in 1972 and left in mid-2009. Following his retirement from Vaudoise Assurances, he has served as a company director. Mr Grobéty has been on the Board of Romande Energie Holding SA and Romande Energie SA since 2002 and is a member of the Finance and Audit Committee. He is a director of Romande Energie Commerce SA. In addition to his work as a magistrate at the Lausanne District Court, he is a board member of the Old-age, survivors’ and invalidity insurance fund (Geneva, until 31 Dec. 2013), Hotela Assurances SA (Montreux), the La Source foundation (Lausanne), the Coopérative romande de cautionnement CRC PME (Pully) and Parking des Hôpitaux SA (Lausanne). He is also chairman of Loginco, a housing cooperative for industry and trade (Lausanne). In addition, he is a member of the Coopérative vaudoise de caution-nement hypothécaire CVCH (Pully) and the Coopérative vaudoise de promotion du cautionnement CVC (Pully).

Jean-Jacques MiautonBusiness education, specialising in steelworks in Italy.Jean-Jacques Miauton spent a large part of his career at the Miauton Group and CRH Gétaz Holding (formerly Gétaz Romang, Vevey). At both he was mana-ging director. Since 2008, he has acquired and developed a group specialising in micromechanics and subcontracting for the watchmaking industry: Swiss Madeness Solutions Group SA. Mr Miauton is managing director and CEO of this group, which is based in La Chaux-de-Fonds with offices in the Jura area. He also founded A+M Miauton Concept SA (Lausanne), specialising in storage containers, waste, modular buildings, equipment, fasteners and machines. He joined the Board of Romande Energie Holding SA and Romande Energie SA in 1997 and sits on the Strategy and Corporate Development Committee. He also sets on the Board of Directors of Romande Energie Commerce SA. Mr Miauton is a board member of CDM Hôtels et Restaurants SA (Lausanne), Codethic SA (Geneva), Maison Planzer Transports SA (Satigny), Giovanna Holding SA (Chailly), Patrimoine Gérance SA (Neuchâtel), Bionéo SA (Boncourt) and Star Industrial Holding (Jersey).

Jean-Yves Pidoux *Doctorate in sociology and anthropology from Lausanne University (UNIL).Mr Pidoux was an associate professor at the UNlL Faculty of Social and Political Sciences and also a member of the board of Trustees and the Executive Com-mittee of Pro Helvetia, the Swiss Arts Council. He has been a member of the Vaud cantonal parliament since 2002. Mr Pidoux was a local councillor in Lausanne from 1998 to 2006. He was elected to the city council’s executive in 2006, with responsibility for the city’s public utilities department. He has been a board member of Romande Energie Holding SA and Romande Energie SA since the AGM of 2007 and sits on the Strategy and Corporate Deve-lopment Committee. In his capacity as head of the Lausanne public utilities department, Mr Pidoux is a board member of several companies in which the city has a direct or indirect financial interest; these include EOS Holding SA (Lausanne), Alpiq Holding SA (Lausanne), Grande Dixence SA (Sion), Hydro Exploitation SA (Sion), Forces Motrices Hongrin-Léman SA (Château d’Oex), Gaznat SA (Vevey), Romande Energie Commerce SA (Morges), Boisy TV SA (Lausanne), Cadouest SA (Prilly), Forces Motrices de l’Aboyeu SA (Collonges), Petrosvibri SA (Vevey), SI-REN SA (Lausanne), LFO SA (Lausanne), Swissgas (Zurich) and Transports Publics de la Région Lausannoise SA (Renens). Additionally, he is director of the Cantonal insu-rance institution (Pully) and a committee member for the Foundation for dramatic arts and the Lausanne chamber orchestra.


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Alphonse-Marie Veuthey *Law degree from Fribourg University. Licensed as a lawyer and notary. Mr Veuthey has worked as a lawyer in Valais canton since 1994 and as a notary since 1995. He has been a member of the Board of Romande Energie Holding SA and Romande Energie SA since the 2011 Annual General Meeting and sits on the Finance and Audit Committee. He also chairs the board of Bas-Valais Energie SA, à Vouvry and sits on the board of Romande Energie Commerce SA (Morges). He is a member of the André Manzini foundation (Aigle). He was a member of the Valais Cantonal Parliament from 1997 to 2009 after acting as a replacement from 1993 to 1997, and was president of the Vionnaz local council from 2000 to 2012.

Michael WiderLaw degree and MBA from Lausanne University.Mr Wider began his career at Entreprises Electriques Fribourgeoises (EEF). In 1997, he was appointed to the company’s executive board as head of financial and support services. In 2001, he oversaw the merger of EEF and ENSA (Electricité Neuchâteloise SA), which led to the creation of Groupe E. He was hired by EOS (Energie Ouest Suisse) in 2003 and put in charge of the company’s restructuring project. From 2004 to 2007, he was Chief Operating Officer before being appoin-ted Head of Energy in 2007. Following the merger of Atel and EOS, he became Head of Energy Switzerland at Alpiq in 2009. He has been a member of the board of Romande Energie Holding SA and Romande Energie SA since the 2012 AGM He also sits on the Strategy and Corporate Development Committee. Mr Wider chairs the boards of various power companies, namely Hydro Exploita-tion SA (Sion), Kernkraftwerk Gosgen-Daniken AG (Daniken) and Nant-de-Drance SA (Finhaut) and sits on the board of Kernkraftwerk Leibstadt AG (Leibstadt), Swissgrid SA (Laufenbourg), Grande Dixence SA (Sion) and Centrale Thermique de Vouvry SA (Vouvry). Lastly, he is a swisselectric committee member (Bern).

Pierre Oberson Board secretary (non-member).

Law degree from Fribourg University. Licensed to practice law. Advanced mana-gement programme for business leaders, St Gallen UniversityMr Oberson started his career as legal adviser to a member of the Fribourg Can-tonal Government in 1999 before joining the KPMG global network of audit and consultancy firms as assistant manager in 2003. Mr Oberson moved to Romande Energie Group in 2008 as head of the legal department and was appointed corporate secretary of the Group and secretary to the Board of Directors (non-member) of Romande Energie Holding SA and Romande Energie SA in September 2012. Mr Oberson has a seat on the boards of Romande Energie Commerce SA (Morges), Bas-Valais Energie SA (Vouvry), Romande Energie Renouvelable SA (Morges), Eoliennes de Provence SA and Tecfor SA. He is also a trustee of the Romande Energie pension fund. He sits on the legal affairs committee of the Swiss Electricity Companies Association (AES).

* Appointed by the Vaud Cantonal Government


AcknowledgementsThe Board of Directors would like to thank Daniel Schmutz, who had reached the legal age limit at the time of the 2013 Annual General Meeting. He had been active in the board’s deliberations since 1992. As a consensus seeker, Mr Schmutz provided sterling service to the Company by contributing his vast experience both in the public sector and business world.

His successor is Laurent Balsiger.

3.3 Elections and terms of officePursuant to Articles 762 of the Swiss Code of Obligations and 16 of the Articles of Association, 6 of the 11 members of the Board of Directors are appointed by the Vaud Can-tonal Government, 2 of which represents shareholding municipalities. The expiry of their terms of office falls under the remit of the Cantonal Government. Until 2013, the other 5 mem-bers of the Board were elected to office by the Annual General Meeting of shareholders for a term of three years. With the initiative on excessive pay becoming law, renewal of terms is sought annually. There is no provision for staggered terms of office or for series of elections. Board members can be re-elected but are required to step down no later than at the AGM held in the year in which they reach the age of 70. It falls to the Board of Directors to appoint its chairman and vice-chairman as well as the members and chairs of its committees. It also appoints a board secretary. Pursuant to the initiative on excessive pay, the chairman of the board and the committee members overseeing compensation shall be appointed by shareholders at the AGM.

3.4 Internal organisational structure

General considerationsThe Board of Directors meets for half-day sessions, in principle no less than five times a year. In 2013, the Board of Directors met eight times for sessions lasting approxi-mately three hours. It also met for a one-day seminar. Last year, the board kept track of business, deliberated on strategy and looked into possibilities of extra genera-tion and supply capacity to extend the Group’s existing capabilities. It also forged strategic alliances and oversaw the development of new lines of business. Members of the Board of Directors faithfully attend the 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 responsibilities. The committees have no decision-making powers (see exceptions under Appointments and Human Resources Committee and under the Ad Hoc Committee). They meet several times a year, depending on the matters at hand and the opinions that need to be provided to the board. Committee members receive the necessary documents in good time for them to prepare for deliberations. In principle, the CEO attends commit-tee meetings, as do in-house or external experts who are called in to advise on particular points.

Strategy and Corporate Development CommitteeThe Committee consists of the Chairman of the Board, two members and the Vice-Chairman. Meetings are normally held four to six times a year (six times in 2013), and are chaired by the Chairman of the Board. Meetings last for three hours on average. The Committee is res-ponsible for providing the Board with recommendations and opinions on the following issues: • Electricity market and economic environment• Group strategy for marketing, distribution and pro-

duction along with the development of new lines of business

• Forging strategic alliances • Shareholder base • Relations with Vaud canton and municipalities served • Any other matter that the Board may wish to assign.

Daniel Schmutz


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In 2013, the Committee continued to study different possibilities for supplying electricity, alone or through EOS Holding SA or Alpiq. The monitoring of strategic interests, alliances and cooperation agreements with other strategic partners were again an important part of these deliberations, as were investments in generation from renewable energy sources. In addition, the committee examined the launch of new co-generation and thermal products. Lastly, the committee dealt with the issue of buying back a second tranche of Romande Energie shares put up for sell by Alpiq.

Finance and Audit CommitteeThe committee has four members and usually meets four to six times a year (seven times in 2013). Meetings last for three hours on average. The committee is responsible for providing the board with recommendations and advice on the following issues :• Budget estimates, the budget, the investment schedule

and the medium-term financial plan• The treasury position along with investment rules• Internal control and audit procedures• Risk management, particularly with respect to the

wholesale buying and selling of energy• Selection of external auditors, their terms of reference

and any special assignments entrusted to them. In this respect, the committee may hold discussions directly with the auditors. It analyses management letters and monitors implementation of any remarks contained therein

• Proposals concerning closure of the accounts (inclu-ding the valuation adjustments for 2013 necessitated by the restructuring operations at Alpiq) and the draft of the annual report.

• Draft revisions of Articles of Association or by-laws;• Any other matter that the Board may wish to assign.

In addition, the committee, acting upon the recommen-dation of the Executive Board, approves the internal audit programme and reviews the reports submitted to it by the auditors. The committee may order extra audits.

Appointments and Human Resources Committee The committee has four members and normally meets four to six times a year (six times in 2013). Meetings last for two hours on average. The committee is responsible for providing the board with recommendations and advice on issues concerning the following: • Members of the Board of Directors of Romande

Energie Holding SA and its various committees, direc-tors of subsidiaries and delegates to the boards of other companies and foundations

• The appointing of Executive Board members• Job descriptions of the CEO and Executive Board

members• General staff remuneration policies• General rules concerning annual pay rises• Situation of the Romande Energie Pension FundFurthermore, the committee decides on the remune-ration of Executive Board members in accordance with generally accepted practice and the principles adopted by the Board of Directors, upon the recommendation of the CEO. These decisions are subject to supervision by the Board of Directors. In 2013, the committee monitored the process for selec-ting two new directors for the Executive Board, heading up the Networks and Energy Services business units respectively.

Ad hoc CommitteeFurthermore, special decision-making authority is vested in an informal group of board members. In order that the Group may seize opportunities without losing time, the following powers have been granted for strategic acqui-sitions and investments: • Up to CHF 10 million – an ad hoc committee consisting

of the Chairman of the Board (who is also Chairman of the Strategy and Corporate Development Commit-tee), the Vice-Chairman of the Board (Chairman of the Appointments and Human Resources Committee) and the Chairman of the Finance and Audit Committee. These transactions may not exceed CHF 30 million per calendar year and are only authorised if the financial situation so permits.

• For amounts above CHF 10 million (or the maximum annual amount of CHF 30 million), the decision has to be approved by the Board of Directors in accordance with the normal procedure.

This special decision-making authority was not exercised in 2013.


3.5 Definition of areas of responsibility between Board of Directors and Executive BoardThe Board of Directors exercises the non-transferable and inalienable duties set out under Art. 716a of the Swiss Code of Obligations. It defines corporate policy and strategy, approves annual operating and investment budgets, establishes financial policy, defines risk policy particularly with respect to the wholesale buying and selling of energy – and is responsible for the founding or disposal of subsidiaries and the acquisition or sale of material shareholdings. Pursuant to Articles 716b of the Swiss Code of Obliga-tions and 17 of the Articles of Association, the Board of Directors has delegated management of the Group to the Chief Executive Officer (CEO) under the by-laws. The CEO is responsible for organising and exercising the powers of the Executive Board, in particular: making recommendations on strategy, applying the principles of corporate policy and strategy, and implementing plans and projects; defining missions; managing the Company; ensuring the achievement of objectives, the profitability and expansion of the Company’s business, and enhan-cing its reputation; preparing operating, investment and cash budgets; hiring and 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, which consists of the members of the Executive Board plus the Corporate Secretary (who is also Secretary to the Board of Directors) and the Head of Communications. The Chairman of the Board of Directors and the CEO maintain close contact with one another in order to coordinate their actions and review ongoing business.

3.6 Information and control instruments vis-à-vis the Executive BoardThe Board of Directors is informed of current business trends at every meeting. Particular attention is paid to the consolidated financial statements and the accounts of individual subsidiaries. Twice a year, the financial statements are accompanied by a detailed projection of estimated annual results. Reports on holdings in which Romande Energie has financial interests, together with a risk management report covering all the Group’s acti-vities, are also prepared for the Board of Directors twice a year. The Executive Board submits its action plans to the Board of Directors. These are the basic reference docu-ments that are used by the Board of Directors to monitor Executive Board activities, supplemented with regular information on the main projects undertaken by the Executive Board and on the Group’s business develop-ments: revenues, margins by client segment, cash flow, capital investment, guarantees and sureties, risks and manpower levels. Romande Energie Holding SA has an internal audit struc-ture in place to supplement the risk management func-tion. The internal auditor reports independently to the Finance and Audit Committee. An internal audit charter has been drawn up and is applied rigorously. It is based on international standards such as those issued by the Institute of Internal Auditors and incorporates the main precepts: “The audit helps the organisation to accom-plish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes”. Internal audits are regularly conducted with external specialists who are not the statutory auditors. The Board of Directors is kept regularly informed of the Group’s business developments and receives reports at each of its meetings. The minutes of Management Committee meetings are submitted to the Chairman and Vice-Chairman of the Board of Directors. A daily press review is sent to each member of the Board of Directors. With regard to risk management, a description of the procedures adopted in this area can be found on page 6 of the «Rapport de Gestion 2013». (only French). For more detailed information, please refer to Note 5 on pp. 17-20 of the 2013 Financial Review.


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Name Role NationalityYear of birth

With Group since

Pierre-Alain Urech CEO Swiss 1955 2004

Denis Matthey Deputy CEO Swiss 1958 2004Philippe Verburgh Head of Networks Swiss/Belgian 1957 2014Philippe Durr Head of Romande Energie Commerce SA Swiss 1964 2013Christian Frère Head of Energie French/German 1959 2012Patrick Bertschy Head of Energy Services Swiss 1968 2014 (H1) Jean-Daniel Habegger Head of Human Resources Swiss 1965 2011

Resigned in 2013

Yves Zumwald Head of Networks Swiss 1967 2009

The extra members of the Management Committee, which are empowered to make proposals, are as follows:

Name Role NationalityYear of birth

With Group since

Pierre Oberson Corporate Secretary Swiss 1971 2012Karin Devalte Head of Communications Belgian 1972 2008

4 Management Committee The Management Committee is comprised of the members of the Executive Board supplemented by other executives. In principle, it meets every fortnight, either for a full day or a half day.

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

4.2 Education, career, other activities and vested interests

None of the senior managers act as consultants for key lobbies in Switzerland or abroad. None of them worked for the Group or any of its companies before they were appointed to their current duties.


Pierre-Alain UrechCEO Degree in civil engineering from the Swiss Federal Institute of Technology, Zurich. Postgraduate diploma from the Swiss Federal Institute of Technology, Lausanne. Mr Urech started his career working for the Swiss Federal Railways (CFF). After exercising management and executive roles at various strata of this company, he was put in charge of the Rail 2000 project and headed the CFF area management in Lausanne. He became a member of the management board in Bern in 1995, and was appointed deputy chief executive officer of CFF SA in 1999. He ran the infrastructure division for nine years, with overall responsibility for the energy sector and hydroelectric plants, and was chairman or board member of numerous companies associated with CFF, the electricity business in Switzerland and railway operators in Europe. On 1 July 2004, Mr Urech joined Romande Energie Group, which he has led since that date. Mr Urech chairs the boards of Forces Motrices Hongrin-Léman SA (Château d’Oex), Société des Forces Motrices du Grand-St-Bernard SA (Bourg-St-Pierre), Centrale Thermique de Vouvry SA, Forces Motrices de l’Avancon (Bex) and Romande Energie Commerce SA. He is a board member of Hydro Exploitation SA (Sion) and DransEnergie SA (Orsières). He is also a committee member of Regiogrid, the federation of cantonal and regional power suppliers, and the Vaud canton economic council and energy commission. Aside from duties within the Group, he sits on the board of Télé Villars-Gryon SA and RailCare AG (Harkingen).

Denis MattheyCFO and Deputy CEOBusiness degree from the Ecole des Hautes Etudes Commerciales of Lausanne University. Swiss certified accountant.Mr Matthey began his career as an auditor at PWC Zurich and KPMG Geneva (1981-1987). He then occupied the post of financial and administrative manager at STS, a subsidiary of the Shipley Group (Boston) from 1987 to 1990. During this period he was made a director of STS, which designs and manufactures galvanoplastic equipment for major computer manufacturers. Between 1990 and 2002 he worked as finance manager and then as CEO of the Matthey Group, a leading European manufacturer of stainless steel pipes for the automotive industry, which was sold to Arcelor in 2002. Mr Matthey was then finance director of a business unit at Arcelor from 2002 to 2003 before becoming CFO of Romande Energie Group on 1 January 2004. He is chairman of Spontis (Granges-Paccot) and CISEL Informatique SA (Matran), and vice-chairman of Romande Energie Renouvelable SA. He sits on the boards of Romande Energie Commerce SA (Morges), Forces Motrices du Grand-St-Bernard SA, Bas-Valais Energie SA (Vouvry), neo technologies SA (Lausanne) and Energie Solaire SA (Sierre). All these companies have ties with Romande Energie Group. In a personal capacity, he is board member of Chauffage Bois-Energie Anzère CBA SA. Lastly, he chairs the Genolier local council.

Philippe VerburghHead of NetworksElectrical engineering degree, Mons Polytechnic University, Belgium. Ph.D, Swiss Federal Institute of Technology, Lausanne. Mr Verburgh began his career as head of IT at Energie Ouest Suisse (EOS) and as project manager at ELCA Informatique, between 1983 and 1995. From 1995 to 2000, he was assistant business manager at EOS, then sales manager at Avenis Trading SA. In 2001, he joined Geneva public utilities as manager of the electricity department then head of the energy division. He was then customer manager between 2008 and 2012. Mr Verburgh became head of Romande Energie’s Networks business unit on 1 February 2014 In a personal capacity, Mr Verburgh is member of the board of directors of Brasserie Docteur Gab’s SA (Savigny).

Pierre-Alain Urech Denis Matthey Philippe Verburgh


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Philippe DurrHead of Romande Energie Commerce SAM.Sc. Microtechnology, Swiss Federal Institute of Technology, Lausanne Executive management training from the European Institute of Business Administration (INSEAD) in Fontainebleau. With 20 years’ experience in managerial and sales/marketing roles, Mr Durr has held a variety of executive positions in multinational and regional companies active in the power, environmental, clean-tech and aeronautical sectors. He was sales director and a member of senior management at Geneva public utilities from 2000 to 2008 and CEO of Mistral Engines (CH/USA) from 2008 to 2010. Through his work as an independent consultant in 2011 and 2012, he was closely involved in the roll-out of electric mobility solutions in Western Switzerland. He has managed Romande Energie Commerce SA since 1 January 2013 He sits on the boards of Bas-Valais Energie SA (Vouvry), CISEL Informatique SA (Matran) and neo technologies SA (Lausanne). Lastly, he is a member of the local council in Crans-près-Céligny.

Christian FrèreHead of Energy Physics degree from the University of Essen (Germany). Ph.D in natural sciences.At the start of his professional career in 1989, Christian Frère held various positions in industry as advisor or chief project engineer, notably at Rheinmetall in Dusseldorf and RWE in Essen (1993-1998). At RWE, the main focus of his work was on waste disposal and recycling. In 1998, he joined Von Roll Environnement, where he occupied various managerial positions up to CEO level. After working as an independent consultant from 2004 to 2005, he was hired by EGL Group in Dietikon (CH), where he oversaw development and investment in the areas of power generation and transmission facilities in Switzerland and abroad. In this capacity, he was delegated to several subsidiaries and associated companies of EGL Group. In 2012, he joined Romande Energie as head of the Energy business unit. He chairs the boards of Romande Energie Renouvelable SA, Enerbois SA (Rueyres) and Eoliennes de Provence SA. He is vice-chairman of VO-RE-Nouvelable SA (Orbe) and sits on the boards of Forces Motrices Hongrin-Léman SA and Gazobois (Cossonay). Lastly, he is managing director of Romande Energie France SAS (Paris).

Patrick BertschyHead of Energy Services Swiss VET certificate, mechanic-electrician. Electrical engineering, Fribourg School of Engineering. Executive Master of Business Administration, Fribourg School of Management.Between 1996 and 2000, Mr Bertschy worked as project engineer and project manager within ABB. In 2000, he joined Glas Troesch as technical director. Between 2001 and 2006, he was head of energy customers then head of the sales division at Gruyère Energie SA. He then moved on to become head of Morat public utilities before joining Romande Energie in H1 2014 as head of the Energy Services business unit.

Philippe Durr Christian Frère Patrick Bertschy


Jean-Daniel Habegger Karin Devalte Pierre Oberson

Jean-Daniel HabeggerHead of Human Resources Swiss VET certificate, business employee. Diploma in human resources management. Advanced training in HR management at CRQP. Business administration course at the Centre Romand de Promotion du Management (CRPM).M Mr Habegger has spent most of his career at Romande Energie, initially as an employee of Société Romande d’Electricité (SRE), which he joined in 1984. After the merger between SRE and Compagnie Vaudoise d’Electricité (CVE) in 1997, Mr Habegger performed several functions in the HR department (personnel administration, head of recruitment and internal mobility). From 2002 to 2011, he was the HR delegate and deputy human resources manager for the Group. He has been head of Human Resources since 1 December 2011. He also chairs the board of trustees of the Romande Energie ordinary and supplementary pension funds.

Karin DevalteHead of Communications, Member of the Management Committee

Pierre ObersonCorporate Secretary, Member of the Management Committee

AcknowledgementsYves Zumwald joined Romande Energie on 1 September 2009 as head of the Distri-bution business unit (which became the Networks business unit on 1 January 2014) and as member of the Executive Board at Romande Energie Group. He has made a significant contribution to the development and optimisation of operations within a business unit of close to 400 employees spread across six different departments. Mr Zumwald left Romande Energie on 31 December 2013 to become COO with responsibility for network management at Swissgrid SA, the company that oversees the running, modernisation and extension of the Swiss transmission grid. The Board of Directors and the Executive Board of Romande Energie, whilst sad to see such a popular corporate officer go, are proud that the interests of Western Swit-zerland will have representation at board level at the national grid company and that Yves Zumwald’s expertise is being recognised and put to good use in this context. They would like to thank him for its work and commitment over the past four years.

4.3 Management contracts Romande Energie SA has not entered into any management contracts

Yves Zumwald


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5 Compensations, shareholdings and loansPlease refer to Section 4, «Remuneration report»..

All shares entitle the holder to one vote. Since 1 January 2014, shareholders can only be represented by an inde-pendent representative or third party under the terms of the Swiss federal ordinance on excessive pay. In 2010, the Articles of Association were amended to comply with the Federal act on book-entry securities, which entered into force on 1 January 2010.

6.1 Voting-right and representation restrictions There are no restrictions on voting rights.

6.2 Quorums and qualifying majoritiesAn absolute majority vote is required to pass resolutions, except in the cases requiring a two-thirds majority pur-suant to Art. 704(1) of the Swiss Code of Obligations. Elections require an absolute majority of votes in the first round and a relative majority in the second round.

6.3 Convocation of the general meeting of shareholdersThis is governed by law, but one or several shareholders representing together no less than 5% of the share capital may also request the convening of a general meeting. An ordinary general meeting of shareholders is convened by way of a notice published in the Swiss Official Gazette of Commerce, at least twenty days prior to the appointed date, and by way of an individual notice to shareholders entered in the share register. An advance notice is published approximately three months before the date of the meeting.

7.1 Duty to make an offerThere is no provision for this in the Articles of Associa-tion. There is no opting-out or opting-up clause. Vaud Canton, Banque Cantonale Vaudoise and 119 Vaud municipalities are parties to a shareholders’ agreement providing for reciprocal pre-emptive rights to their shares. These shareholders hold 53.52% of the capital and total voting rights.

6.4 Inclusion of item on the agendaOne or several shareholders representing shares with an aggregate nominal value of CHF 1 million or 5% of the share capital may request that an item of business be entered on the agenda. This request must be made to the Board of Directors in writing no later than thirty days before the date of the meeting, indicating the purpose of the debates and the motions submitted..

6.5 Inscriptions in the share registerShareholders 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..

7.2 Clauses on changes of controlThis is not covered by any clause in the Articles of Association. Nor is there any agreement or programme in favour of the members of the Board of Directors or the Executive Board in such cases. The employment contract of the CEO can be terminated by either party by giving one year’s notice as from the end of the current month. The notice period for other senior managers is six months as from the end of the current month.

6 Shareholders’ participation

7 Changes of control and defence measures


8.1 Duration of the mandate and term of office of the lead auditor

Ernst & Young SA have been the statutory auditors of Romande Energie Group since the 1997 financial year. Previous to this, the statutory auditors were Société Fiduciaire Lémano, part of the same group. The lead auditor, Serge Clément, took up his duties in May 2008. The maximum rotation period for lead auditors is seven years, as required by law.

8.2 - Auditing fees and additional fees 8.3 The fees charged by Ernst & Young are as follows:

CHF

Auditing of financial statements 272 000Tax advisory services 15 490Transaction advisory services 3 700

Total 291 190

Audit services comprise the basic work required each year to audit the accounts of individual Group companies and the consolidated financial statements of Romande Energie Group. This includes services rendered by audi-tors in connection with pension plans and supervision of the implementation or updating of accounting methods. This work also covers examining this corporate gover-nance chapter and the preparation of auditors’ reports. The Board of Directors decided at the end of 2011 that

Romande Energie Group pursues an open information policy in keeping with its size and importance.The communication measures adopted by the Group are designed to enhance its credibility and public image. Particu-lar care is also taken to ensure that executives are provided with timely, accurate information to enable them to carry out their leadership responsibilities. Shareholders of Romande Energie Holding SA are kept informed of 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 share price is disclosed on an ad hoc basis in accordance with the relevant directives of the SIX Swiss Exchange. Information is compiled by the corporate communications service and the investor relations team. Information about the Group is also posted on the internet at www.romande-energie.ch. Official notices are published in the Swiss Official Gazette of Commerce; notices convening the Annual General Meeting are sent personally to shareholders entered in the share register.A financial calendar containing the publication dates for

the external auditors will no longer be entrusted with advisory or back-up assignments for the internal audit department in order to keep the different roles comple-tely separate from each other.

8.4 Informational instruments pertaining to an external auditSee Finance and Audit Committee, Section 3.4.The auditors receive all the documentation that is prepa-red for every meeting of the Finance and Audit Commit-tee. In 2013, they attended one meeting of the commit-tee and one meeting of the Board of Directors. Their comments form the basis of action plans, and the conclusions are all re-submitted to the Committee for verification. The auditors’ work is totally independent of the Board of Directors and the Executive Board. The auditors’ fees and services are also checked by the Finance and Audit Committee, which submits a report to the Board of Directors. The auditors offer the full guarantees of professional qualification required by a listed company. They have the necessary resources available to fulfil their mission.

the annual and interim financial statements and the annual report, as well as the date of the press conference, is posted on the Group’s website early in the year. An events calendar for the current year and contact addresses are shown on the penultimate page of this report.

The following links allow investors to register for our push and pull services for Group communications: In French: http : / / investor.romande-energie.ch /

website-services / alert-service.aspx?sc_lang=fr

In English:http : / / investor.romande-energie.ch / website-services / alert-service.aspx?sc_lang=en

8 Auditing body

9 Information policy

REMUNERATION REPORT

4


1 Board of DirectorsEmoluments in 2013 were as follows :

Overall remuneration CHF

(including remuneration by other Group companies (>50%, where applicable) 2013 2012

Guy Mustaki, Chairman 98 800 115 000Wolfgang Martz, Vice-Chairman 80 100 81 300Laurent Ballif * 46 200 46 200Laurent Balsiger * (since le 27 Mai 2013) 29 316 Christian Budry 55 800 57 000Paola Ghillani 49 800 51 000Bernard Grobéty 61 300 59 400Giovanni Leonardi 15 684Jean-Jacques Miauton 58 200 60 600Jean-Yves Pidoux * 58 700 59 700Daniel Schmutz (until 27 Mai 2013) 17 300 48 600Alphonse-Marie Veuthey 77 000 68 600Michael Wider ** 46 200 36 865

Total 678 716 699 949

* Paid to Vaud canton or the municipality represented ** Paid to Alpiq

These amounts do not include social insurance costs. Please refer to Note 8 of the financial statements of Romande Ener-gie Holding SA.The remuneration paid by third parties for offices held in associates (Group shareholdings of less than 50%) are not included in the above amounts.

Under Art. 22 of the Articles of Association, the Board of Directors is empowered to set the remuneration of its members in accordance with generally accepted practice. Please note that the Board of Directors will recommend to shareholders the revisions required to adapt this arrangement to the Swiss federal ordinance on excessive pay at the 2014 AGM. Provided that it is adopted, the revised arrangement will apply as from the 2015 financial year. Board members receive fixed annual compensation (inde-pendent of the Group’s results) and fees for their attendance at Board meetings. Directors do not receive a set sum upfront to defray entertainment expenses but are reimbursed for actual expenses as and when these are incurred. Remuneration is not set at any particular intervals, with no distinction made between directors. Remuneration is pro-posed by the Appointments and Human Resources Com-mittee, with amounts in line with usual business practice in Switzerland. A comparative study was commissioned from CEPEC (Centre d’Etude de Projects Economiques SA, Lau-sanne) in 2010, and concluded that the remuneration paid by Romande Energie Group is in line with customary business practice and can be deemed considerably lower in relation to other listed companies of comparable size in Switzerland as measured by revenues, staff numbers and market typology. Annual compensation and attendance fees are as follows:

Annual compensation CHF

Chairman 70 000Vice-Chairman 37 500Director 30 000Chair of special committee, on top of basic compensation 6 000

Attendance fees since 1 July 2010 : - half-day meeting 1 200- full-day meeting 1 800

Board members receive an allowance of CHF 0.70 per kilo-metre for the journey between their place of work or resi-dence and the meeting venue. Fees may be paid to the Chairman, the Vice-Chairman and any other Board member for attendance at external meetings or special preparatory meetings. There are no directors’ bonuses, and no allotments of shares or other forms of profit-sharing.

Since the 2011 Annual General Meeting, Romande Energie Group has instituted a consultative vote on remuneration policy for members of the Board of Directors and the Exe-cutive Board.


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2 Executive Board2.1 Introduction

The success of Romande Energie Group largely depends on the expertise and the dedication of its employees. As an employer, we aim to set the standard for attracting, retaining and motivating the most talented employees at every level. We want to establish a direct and objective relationship between remuneration policy, the financial results of the Group and its subsidiaries, and the individual performance of employees. These same principles apply to the mem-bers of the Executive Board.

2.2 GovernanceThe Board of Directors has ultimate responsibility for establishing the principles of remuneration applied wit-hin the Group. It has delegated some of its powers in this area to the Appointments and Human Resources Committee. It is informed of the individual remuneration paid to members of the Executive Board, and reserves the right to intervene. This committee, which consists exclusively of non-executive directors, monitors the application of established remuneration principles, exa-mines the periodic proposals relating to trends in overall remuneration and submits them to the Board, reviews the appropriateness of salaries paid to Executive Board members, and determines such salaries. Remuneration practices in other companies serve as a basis of compa-rison. The last full survey was conducted in 2013, with comparisons drawn from a selection of Western Swiss companies operating in the energy, banking, insurance and industrial sectors.

2.3 Principles of remuneration for Executive Board members Since 2010, overall remuneration has consisted of the following components

Components of overall remuneration Influence

Profit-sharing EBITDA+ over several years

Variable salary Performance relating to targets achievement and competency in job

Basic salary

a. Annual basic salary The annual basic salary is the cornerstone of overall

remuneration and also serves as a reference for determining the variable salary. Every year, the Appointments and Human Resources Committee examines the possibility of increasing the total annual payroll on the basis of economic criteria and unchanged staff numbers. Executive Board members receive proportionally the same increase as that granted to all the Group’s employees. Adjustments are made in terms of members’ individual performance (competency in job position) relating to leadership and management

qualities as well as technical and relational skills.

b. Variable salaryAs is the case for all Romande Energie employees, the variable component of remuneration is determined by competency on the job and the degree to which indivi-dual objectives have been met. The level of performance therefore has a direct impact on variable salary.

Impact on variable salary

Performance level reached

Job competency 3 / 10 60 % 120 %Individual goals 7 / 10 0 % 120 %

Individual objectives are set and weighted at the start of the year. They are linked to the implementation of corporate strategy.Their evaluation at the end of the year reflects the extent to which they have been achieved. Barring extraordi-nary circumstances, the weighting of objectives is not reviewed.The target values for variable remuneration are shown below. The level of performance may affect these values as follows (as % of the annual basic salary):

Target Minimum Maximum

CEO 40 % 7.2 % 48 %Members 30 % 5.4 % 36 %

The variable salary is paid in cash in the month of April following the reference year.The Appointments and Human Resources Committee, together with the Chairman of the Board, assesses the degree of competency and the achievement of objec-tives. No external consultants are used for this purpose.

c. Profit-sharing The share in Romande Energie Group profits for all em-ployees is determined every year by the Board of Directors on the basis of EBITDA, to which are added ordinary divi-dends on the Group’s shareholdings (EBITDA+).

The method of calculating the total amount proposed applies provided that ordinary depreciation and amorti-sation are covered by EBITDA+. In principle, there is no payment below this level, but the Board of Directors may decide otherwise. The maximum overall amount payable to the members of the Executive Board is determined within the following ranges (as % of annual basic salary):

Minimum Maximum

CEO 0 % 48 %Members 0 % 32 %


In order that profit-sharing should be seen from a long- term perspective, the total amount generated by EBITDA+ for the reference year is distributed as follows:• Two-thirds of the amount is paid in full.• one-third is paid on the average EBITDA+ for the refe-

rence year and the two previous years (i.e. three years) The amount is paid in cash in the month of April following the reference year.

d. Summary In extreme casesExecutive Board members could theoretically obtain variable salaries (letters b and c) representing a total of 68% of their basic salary; for the CEO, this total could reach 96%.

2.4 Total remunerationTotal remuneration granted for the 2013 financial year, to the six members of the Executive Board, was as follows:

CHF 2013 2012

Remuneration- Basic 1 469 901 1 412 884- Variable 942 700 887 600Total 2 412 601 2 300 484

CostsEntertainment expenses and car allowance where applicable 101 400 93 000

Social security costs (AVS, pension plans, etc.) 506 293 453 743

In 2013, the highest remuneration was received by Pierre-Alain Urech, CEO, as follows: CHF 698,612 + entertainment expenses of CHF 18,000 (in 2012: CHF 685,311 + CHF 18,000). Of these amounts, variable sala-ry and Group-related profit-sharing came to CHF 320,000 in 2013 (in 2012: CHF 307,300). For more details, please refer to Note 9 of the financial statements of Romande Energie Holding SA.

2.5 Other allowances

Entertainment expensesEntertainment expenses take the form of a fixed allo-wance of CHF 1,250 per member per month (CHF 1,500 for the CEO). In return, members pay their recurrent out-of-pocket expenses themselves up to an amount of CHF 50 per day (CHF 75 for the CEO).

Company cars Members are provided with a company car if they want one, and reimburse the Company for any private use of the vehicle. Those not availing themselves of a company car instead receive a fixed allowance.

Allowances in connection with activities on boards of directors All amounts (annual compensation and attendance fees) received by members in connection with directorships are remitted in full to Romande Energie.

2.6 Retirement benefits Senior managers belong to the Romande Energie pension plan and receive benefits identical to those provided for all Group employees. There are no special benefits such as “Bel-Etage” pension plans or purchases of additional insurance years. See Section 3.

3 Other benefits for members of Board of Directors and the Executive BoardShare ownership is as follows:

Share ownership

Shares held by Group companies as at 31 December 2013 (see table in Section 1.2 and accompanying remarks) 113 437 shares 9.95 %Others shareholders 1 026 563 shares 90.05 %Of which :

- Held by members of the Board of Directors 22 shares < 1 %

- Held by members of the Executive Board 0 shares 0 %

There were no management transactions in 2013.

As in previous years, no benefits in the form of shares, options, additional fees, loans, repayment waivers, or other financial advantages or benefits in kind were granted to members of the Board of Directors or the Executive Board or to parties closely related to them in 2013. The municipalities of Vevey and Lausanne, where Messrs Ballif and Pidoux are members of the executive, hold 13,320 and 16,474 shares respectively.

Ernst & Young LtdPlace Chauderon 18P.O. BoxCH-1002 Lausanne

Phone +41 58 286 51 11Fax +41 58 286 51 01www.ey.com/ch

To the Board of Directors of

Romande Energie Holding SA, Morges

Lausanne, 27 March 2014

Review of Corporate Governance Disclosures

You engaged us to review the corporate governance disclosures of Romande Energie Holding SA madepursuant to the Corporate Governance Directive of the SIX Swiss Exchange for the period ended31 December 2013. These disclosures are made in a separate section, on pages 15 to 38 of the annualreport. The board of directors is responsible for the content of these disclosures. Our responsibility is toissue a report based on our review.

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

Regarding the data for Chapter 5 (Compensations, shareholdings and loans) of the CorporateGovernance Directive, we have also examined the information gathering processes.

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

Ernst & Young Ltd

Serge Clément Karine Badertscher ChamosoLicensed audit expert Licensed audit expert(Auditor in charge)

corporate governanceir2.flife.de/data/romande/igb_html/pdf/1000005_e.pdfthis report complies with...

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