27. BOARD OF DIRECTORS’ COMMITTEES

Pursuant to Article 10 of the Company’s Articles of Association the Board of Directors may have delegated bodies. The Board of Directors has created four Committees:

  • Executive Committee
  • Audit and Control Committee
  • Nominations and Remunerations Committee
  • Related-Party Transactions Committee

The Board of Directors’ Committees regulations are available to the public at the Company’s website, www.edprenovaveis.com.

 

28. EXECUTIVE COMMITTEE COMPOSITION

Pursuant to Article 27 of the Company’s Articles of Association, the Executive Committee shall consist of no less than four (4) and no more than seven (7) Directors.

Its constitution, the nomination of its members and the extension of the powers delegated must be approved by two-thirds (2/3) of the members of the Board of Directors.

The Board of Directors established the number of members of the Executive Committee in five (5), plus the Secretary. The current members are:

  • João Manso Neto, who is the Chairman and CEO
  • Nuno Alves
  • Miguel Dias Amaro
  • Gabriel Alonso
  • João Paulo Costeira

Additionally, Emilio García-Conde Noriega is the Secretary of the Executive Committee.

 

29. COMMITTEES COMPETENCES

EXECUTIVE COMMITTEE

FUNCTIONING

In addition to the Articles of Association, this committee is also governed by its regulations approved on June 4th, 2008 and last amended on April 9th 2015, in order to adapt them to the changes of the New Spanish Companies Law. The committee regulations are available to the public at www.edprenovaveis.com.

The Executive Committee shall meet at least once a month and whenever is deemed appropriate by its Chairman, who may also suspend or postpone meetings when he sees fit. The Executive Committee shall also meet when requested by at least two (2) of its members.

The Chairman of the Executive Committee, who is currently also the Vice-Chairman of the Board of Directors, shall send to the Chairman of the Audit and Control Committee invitations to the Executive Committee meetings and the minutes of those meetings. The Chairman of the Board of Directors also receives the minutes of the meetings of the Executive Committee.

Meetings of the Executive Committee are valid if half of its members plus one are present or represented. Decisions shall be adopted by majority. In the event of a tie, the Chairman shall have the casting vote.
Executive Directors shall provide any clarifications needed by the other Directors or corporate bodies whenever requested to do so.

The composition of the Executive Committee is described on the previous topic.

The Executive Committee is a permanent body to which all the competences of the Board of Directors that are delegable under the law and the Articles of Association can be delegated, with the exception of the following:

  • Election of the Chairman of the Board of Directors;
  • Appointment of Directors by co-option;
  • Request to convene or convening of General Shareholders’ Meetings and the preparation of the agenda and proposals of resolutions;
  • Preparation and drafting of the Annual Report and Management Reports and submission to the General Shareholders’ Meeting;
  • Change of registered office;
  • Drafting and approval of the proposal for mergers, spin-off, or transformation projects of the Company;
    Monitoring the effective functioning of the Board of Directors, its committees and the performance of delegated bodies and appointed directors.
  • Definition of the Company ́s general policies and strategies including the policy of own shares Authorization or waiver of the obligations arising from duty of loyalty;
  • Preparation of any report required by the law to the management body, provided that the operation referred in the report cannot be delegated;
  • Appointment and dismissal of Chief Executive Officer, top management directly depending from the Board of Directors or any of its members, as well as their general contractual conditions including remuneration;
  • The faculties that the General Meeting may have delegated on the Board of directors, except for the cases expressly authorized by the first to subdelegate them.

 

2015 ACTIVITY

In 2015 the Executive Committee held 49 meetings. The Executive Committee’s main activity is the daily management of the Company.

AUDIT AND CONTROL COMMITTEE

COMPOSITION

Pursuant to Article 28 of the Company’s Articles of Association and Articles 8 and 9 of the Committee’s Regulations, the Audit and Control Committee consists of no less than three (3) and no more than five (5) members.

According to Article 28.5 of the Articles of Association the term of office of the Chairman of the Audit and Control Committee is three (3) years after which he may be re-elected for another term of three (3) years. Jorge dos Santos was first elected on April 8th, 2014 for the position of Chairman of the Audit and Control Committee, following the opinion presented by the Nominations and Remuneration Committee.

The Audit and Control Committee consists of three (3) independent members, plus the Secretary. As of December 31st, 2015, the members of the Audit and Control Committee are:

  • Jorge Santos, who is the Chairman
  • João Manuel de Mello Franco
  • João Lopes Raimundo

Additionally, Mr. Emilio García-Conde Noriega is the Secretary of the Audit and Control Committee.

 

COMPETENCES

The competences of the Audit and Control Committee are as follows:

  • Reporting, through the Chairman, to the General Shareholders’ Meetings on questions falling under its jurisdiction;
  • Proposing the nomination of the Company’s auditors to the Board of Directors for subsequent approval by the General Shareholders’ Meeting, as well as the contractual conditions, scope of the work – specially concerning audit services, “audit related” and “non-audit” – annual activity evaluation and revocation or renovation of the auditor nomination;
  • Supervising the finance reporting and the functioning of the internal risk management and control systems, as well as, evaluating those systems and proposing the adequate adjustments according to the Company necessities;
  • Supervising internal audits and compliance;
  • Establishing a permanent contact with the external auditors to assure the conditions of independence, the adequate provision of services, acting as the Company speaker for these subjects related to the auditing process, and receiving and maintaining information on any other questions regarding accounting subjects;
  • Preparing an annual report on its supervisory activities, including eventual constraints, and expressing an opinion on the Management Report, the Accounts and the proposals presented by the Board of Directors;
  • Receiving notices of financial and accounting irregularities presented by the Company’s employees, shareholders, or entities that have a direct interest and judicially protected, related with the Company’s social activity;
  • Engaging the services of experts to collaborate with Committee members in the performance of their functions. When engaging the services of such experts and determining their remuneration, it must be taken into account the importance of the matters entrusted to them and the economic situation of the Company;
  • Drafting reports at the request of the Board and its committees;
  • Reflecting on the governance system adopted by EDPR in order to identify areas for improvement; Any other powers entrusted to it by the Board of Directors or the Articles of Association.

 

FUNCTIONING

In addition to the Articles of Association and the law, this committee is governed by its regulations approved on June 4th, 2008 and amended on May 4th, 2010 available to the public at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairman sees fit. This committee shall draft minutes of every meeting held and inform the Board of Directors of its decisions at the first Board meeting after each committee meeting.

Decisions shall be adopted by majority. The Chairman shall have the casting vote in the event of a tie.

2015 ACTIVITY

In 2015, the Audit and Control Committee’s activities included the following:

  • Monitor the closure of quarterly accounts, the first half-year and year-end accounts, to familiarize itself with the preparation and disclosure of financial information, internal audit, internal control and risk management activities;
  • Analysis of relevant rules to which the committee is subject in Portugal and Spain;
  • Assessment of the external auditor’s work, especially concerning the scope of work in 2015 and approval of all “audit related” and “non-audit” services;
  • Supervision of the quality and integrity of the financial information in the financial statements and participation in the Executive Committee meeting at which these documents were analysed and discussed;
  • Drafting of an opinion in the individual and consolidated annual reports and accounts, in a quarterly, half year and yearly basis;
  • Pre-approval of the 2015 Internal Audit Action Plan;
  • Supervision of the quality, integrity and efficiency of the internal control system, risk management and internal auditing;
  • Reflection on the corporate governance system adopted by EDPR; Information about the whistle-blowing;
  • Quarterly and annual report of its activities.

 

The Audit and Control Committee found no constraints during its control and supervision activities.
A report on the activities of the Audit and Control Committee in the year ended on December 31st, 2015 is available to shareholders at www.edprenovaveis.com.

The information regarding the meetings celebrated by this Committee and the attendance of its related members during the year 2015 is described at topic 35.

NOMINATIONS AND REMUNERATIONS COMMITTEE

COMPOSITION

Pursuant to Article 29 of the Company’s Articles of Association and Articles 8 and 9 of its Regulations, the Nominations and Remunerations Committee shall consist of no less than three (3) and no more than six (6) members. At least one of its members must be independent and shall be the Chairman of the committee.

The members of the committee shall not be members of the Executive Committee. The Nominations and Remunerations Committee is constituted by independent members of the Board of Directors, in compliance with Recommendation 52 of the Unified Code of Good Governance (Código Unificado de Buen Gobierno) approved by the Board of CNMV February 18th 2015. The code lays down that the Nominations and Remunerations Committee must be entirely constituted by external Directors numbering no fewer than three (3). As it is made up of independent Directors (in Spain the committee may only be comprised of Directors), it complies to the extent possible with the recommendation indicated in chapter II.3.1 of the Portuguese Code of Corporate Governance.

The Nominations and Remunerations Committee consists of three (3) independent members, plus the Secretary.

The current members are:

  • João Manuel de Mello Franco, who is the Chairman
  • António Nogueira Leite
  • Acácio Jaime Liberado Mota Piloto

 

At the General Shareholder’s Meeting celebrated on April 9th 2015 Rafael Caldeira Valverde, ceased to be member of the Board of Directors of EDP Renováveis S.A., and therefore member of the Nominations and Remunerations Committee. In order to fill this vacancy, on the meeting of the Board of Directors celebrated on April 9th, 2015 after the General Shareholder’s Meeting, Acácio Jaime Liberado Mota Piloto was nominated as member of the Nominations and Remunerations Committee.

Additionally, Emilio García-Conde Noriega is the Secretary of the Nominations and Remunerations Committee.
None of the committee members are spouses or up to third degree relatives in direct line of the other members of the Board of Directors.

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

COMPETENCES

The Nominations and Remunerations Committee is a permanent body belonging to the Board of Directors with an informative and advisory nature and its recommendations and reports are not binding.

The Nominations and Remunerations Committee has no executive functions. The main functions of the Nominations and Remunerations Committee are to assist and report to the Board of Directors about nominations (including by co-option), re-elections, dismissals, and the remuneration of the Board Members and its position about the composition of the Board of Directors, as well as the nominations, remuneration, and dismissal of senior management personnel. The Nominations and Remunerations Committee shall also inform the Board of Directors on general remuneration policy and incentives to them and the senior management.

These functions include the following:

  • Defining the standards and principles governing the composition of the Board of Directors and the selection and nominations of its members;
  • Proposing the appointment and re-election of Directors in cases of nominations by co-option and in other cases for the submission to the General Shareholders’ Meeting by the Board of Directors;
  • Proposing to the Board of Directors the candidates for the different committees;
  • Proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method, and amounts payable to the Directors;
  • Making proposals to the Board of Directors on the conditions of the contracts signed with Directors;
  • Informing and making proposals to the Board of Directors regarding the nominations and/or removal of executives and the conditions of their contracts and generally defining the hiring and remuneration policies of executive staff;
  • Reviewing and reporting on incentive plans, pension plans, and compensation packages; Any other functions assigned to it in the Articles of Association or by the Board of Directors.

 

FUNCTIONING

In addition to the Articles of Association, the Nominations and Remunerations Committee is governed by its Regulations approved on June 4th, 2008. The committee’s regulations are available at www.edprenovaveis.com.

This committee shall meet at least once every quarter and also whenever its Chairman sees fit. This committee shall draft minutes of every meeting held and inform the Board of Directors of its decisions at the first Board meeting after each committee meeting. Decisions shall be adopted by majority. The Chairman shall have the deciding vote in the event of a tie.

2015 ACTIVITY

In 2015 the Nominations and Remunerations Committee activities were:

  • Proposing the reelection of the members of the Board of Directors to be submitted to the Board and approved by the General Shareholder’s Meeting.
  • Proposing the names of the candidates for the election and also election by co-option, of new members of the Board of Directors due to the vacancy position, to be submitted to the Board and approved by the General Shareholder’s Meeting.
  • Performance evaluation of the Board of Directors and the Executive Committee;
  • Drafting update and consequent approval of the Performance Evaluation and Remuneration Model for 2014-2016;
  • Drafting of the Remuneration Policy to propose to the Board of Directors and to be approved at the General Shareholders Meeting;
  • Annual Report of their activities.

 

RELATED-PARTY TRANSACTIONS COMMITTEE

COMPOSITION

Pursuant to Article 30 of the Articles of Association, the Board of Directors may set up other committees, such as the Related-Party Transactions Committee. This committee shall consist of no fewer than three (3) members. The majority of the members of the Related Party Transactions Committee shall be and currently are independent.The only non-independent member of this Committee is Nuno Alves.

Members of the Related Party Transactions Committee shall be considered independent if they can perform their duties without being conditioned by relations with EDPR, its majority shareholders or its Directors and, if this is the case, meet the other requirements of the applicable legislation.

The Related-Party Transactions committee consists of two (2) independent members and one (1) non- independent member, as described above, plus the Secretary.

Until the Board of Directors Meeting celebrated on April9th 2015, the members of this Committee were José Ferreira Machado, Joao Manuel de Mello Franco and Nuno Alves. At the celebration of this meeting, and in accordance of the policy of rotation of the committees’ members and the entrance of new ones, Francisca Guedes de Oliveira was nominated as member of the Nominations and Remunerations Committee. As of this date and currently, the members of this Committee are:

  • José Ferreira Machado, who is the Chairman Nuno Alves
  • Francisca Guedes de Oliveira

Additionally, Emilio García-Conde Noriega is the Secretary of the Related Party Transactions Committee.

The committee members shall maintain their positions for as long as they are Company Directors. Nevertheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

COMPETENCES

The Related Party Transactions Committee is a permanent body belonging to the Board of Directors that performs the following duties, without prejudice, to others that the Board may assign to it:

  • Periodically reporting to the Board of Directors on the commercial and legal relations between EDPR or related entities and EDP or related entities;
  • In connection with the approval of the Company’s annual results, reporting on the commercial and legal relations between the EDPR Group and the EDP Group and the transactions between related entities during the fiscal year in question;
  • Ratifying transactions between EDPR and/or related entities with EDP and/or related entities by the stipulated deadline in each case, provided that the value of the transaction exceeds € 5,000,000 or represents 0.3% of the consolidated annual income of the EDPR Group for the previous fiscal year ;
  • Ratifying any modification of the Framework Agreement signed by EDPR and EDP on May 7th, 2008;
  • Making recommendations to the Board of Directors of the Company or its Executive Committee regarding the transactions between EDPR and related entities with EDP and related entities;
  • Asking EDP for access to the information needed to perform its duties;
  • Ratifying, in the correspondent term according to the necessities of each specific case, the transactions between Qualifying Holdings other than EDP with entities from the EDP Renováveis Group whose annual value is superior to € 1,000,000;
  • Ratifying, in the corresponding terms according to the necessities of each specific case, the transactions between Board Members, “Key Employees” and/or Family Members with entities from EDP Renováveis Group whose annual value is superior to € 75,000.

 

In case the Related Party Transactions Committee does not ratify the commercial or legal relations between EDP or its related entities and EDP Renováveis and its related entities, as well as those related with Qualifying Holders other than EDP, Board Members, “Key Employees” and/or there Family Members, such relations must be approved by 2/3 of the members of the Board of Directors as long as half of the members proposed by entities different from EDP, including independent Directors, vote favourably, except when a majority of members expresses its approval prior to submitting the matter to the Related Party Transactions Committee for its approval.

The terms of the third bullet point above shall not apply to transactions between EDP or its related entities and EDP Renováveis or its related entities carried out under standardized conditions and are applied equally to different related entities of EDP and EDPR, even standardized price conditions.

FUNCTIONING

In addition to the Articles of Association, the Related-Party Transactions Committee is governed by its regulations approved on June 4th, 2008 and amended on February 28th, 2012. The committee’s regulations are available at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairman sees fit.

This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.

Decisions shall be adopted by majority. The Chairman shall have the casting vote in the event of a tie.

2015 ACTIVITY
In 2015, the Related Party Transactions Committee revised, approved and proposed to the Board of Directors the approval of all agreements and contracts between related parties submitted to its consideration.

Chapter E – I, topic 90, of this report includes a description of the fundamental aspects of the agreements and contracts between related parties.