REPOWER

Board of Directors

Board of Directors

Members

The members of the Board of Directors are listed on pages 42 to 45 of the Annual Report. No member of the Board of Directors of Repower AG performs operational management tasks for the company. Members of the Board of Directors do not sit on the Executive Board of Repower AG or on that of any other Group company. In the three financial years preceding the year under review, no member of the Board of Directors was entrusted with any executive functions within the Repower Group. Some members of the Board of Directors perform executive functions for the principal shareholders Alpiq Holding AG and Elektrizitäts-Gesellschaft Laufenburg AG or their affiliated companies. Normal business relations exist with these companies.

Election and term of office

The members of the Board of Directors are elected by the Annual General Meeting for a three-year term. The election procedure is based on the principle of total renewal whereby the members are generally elected collectively as a group in a single ballot. Newly elected members assume the term of office of their respective predecessor. As the last regular election was held at the 2011 Annual General Meeting, the term of office of all members of the Board of Directors will expire at the 2014 Annual General Meeting. The Board of Directors currently comprises twelve members, the maximum permissible number under the Articles of Association. Re-election is possible. According to the Organisational Regulations, members of the Board of Directors must give up their seats on the board as a rule at the Annual General Meeting following the end of the year in which they reach 70 years of age. The Board of Directors may make exceptions to this rule.

Internal organisation

The Board of Directors is self-constituting and elects its Chairman, Vice Chairman and Secretary. The Secretary need not be a member of the Board of Directors. There is also a Board Committee that performs the duties of a Nomination, Compensation and Audit Committee, in addition to other responsibilities. The Board of Directors appoints the Board Committee from among its own members. The Chairman and Vice Chairman automatically serve on the Board Committee by virtue of their office. Members of the Board Committee are elected for the same term of office as the Board of Directors. The four members of the Board Committee are listed on pages 42 to 44 of the Annual Report. In addition to its duties as Nomination, Compensation and Audit Committee, the Board Committee advises the Board of Directors on business that comes before it, and issues recommendations. It also has the authority to make final decisions on certain types of business (see Assignment of Authority and Responsibility for the Board of Directors and Executive Board).

Board committee as audit committee

The Board Committee, in its capacity as Audit Committee, evaluates the efficacy of the external audit and the functional effectiveness of the risk management processes. It may commission the external auditors or other external consultants to carry out special audits for the purpose of internal control. The Board Committee also reviews the status of company compliance with various standards (annual compliance report). The Committee critically reviews the individual and consolidated financial statements, and the interim financial statements intended for publication. It discusses the financial statements with the CFO and, if the Committee deems it necessary, with the external auditor-in-charge. Finally, the Committee decides whether to recommend to the Board of Directors that the individual and consolidated financial statements be presented to the Annual General Meeting for approval. It evaluates the services and fees of the external auditors and verifies their independence. It also determines whether the auditing activity is compatible with any existing consulting mandates.

Board committee as compensation committee

The Board Committee, in its capacity as Compensation Committee, deals with compensation policies, primarily concerning compensation at senior management level. It has the authority to define the terms and conditions of contracts of employment for Executive Board members. It ensures that the company offers competitive, performance-based total compensation packages in order to attract and retain individuals with the necessary skills and attributes.

Board committee as nomination committee

The Nomination Committee handles the preparations for electing and re-electing individuals to the Board of Directors based on the shareholder structure and for electing the Chief Executive Officer of the Repower Group (CEO), the CEO's deputy and the other members of the Executive Board.

Together with the Secretary and the CEO, the Chairman of the Board of Directors draws up the agenda for meetings of the Board of Directors and Board Committee. Members of these two boards generally receive proposals relating to each agenda item eight days in advance of meetings; these proposals include background documentation as well as an evaluation and a motion by the Executive Board and – for meetings of the Board of Directors – by the Board Committee. The Board of Directors meets as often as business requires, but at least twice a year; meetings are called by the Chairman or by the Vice Chairman if the Chairman is prevented from doing so. The Board of Directors generally meets at least once a quarter. The Board of Directors must be convened whenever one of its members or the CEO requests a meeting in writing, specifying the reason. In the year under review the Board of Directors met five times and the Board Committee six times. The Board Committee convened four times as Audit Committee and twice as Nomination Committee. The normal meeting duration for both bodies is half a day.

The CEO and CFO generally attend every meeting of the Board of Directors and the Board Committee; the other members of the Executive Board attend the meetings when required in order to explain the proposals. The Board of Directors is deemed to have a quorum if the majority of its members are present. The Board of Directors passes resolutions by a majority vote. The Chairman does not have a casting vote. Minutes are taken of the business and resolutions of the Board of Directors and are submitted to the Board for approval at its next meeting. The Board Committee and Board of Directors follow the same procedures.

Assignment of authority and responsibility to the Board of Directors and Executive Board

Types of authority granted to the Board of Directors and the Executive Board are defined in the Organisational Regulations and the related Assignment of Authority and Responsibility. The Board of Directors is responsible for the overall direction and strategic orientation of the Repower Group and for supervising the Executive Board. It reviews and determines on an annual basis the objectives and strategy of the Repower Group as well as the corporate policy in all sectors, and makes decisions regarding short- and long-term business planning. It also deals with the organisational structure, accounting structure, internal control system and financial planning, the appointment and discharge of the persons entrusted with management and representation (namely the CEO, deputy CEO and the other members of the Executive Board), preparation of the Annual Report, preparations for the Annual General Meeting and implementation of its resolutions. The Board of Directors has delegated overall operational management of the Repower Group to the CEO. The CEO has delegated certain management functions to the members of the Executive Board. Some types of business or transactions must be presented to the Board of Directors and/or the Board Committee for a decision in accordance with the Assignment of Authority and Responsibility (Annex to the Organisational Regulations). The Assignment of Authority and Responsibility can be viewed at www.repower.com/governance.

Information and control instruments vis-à-vis the Executive Board

At each meeting of the Board of Directors and the Board Committee, the CEO and the members of the Executive Board report on current business developments, important business transactions and the status of major projects. Aside from these meetings, any member of the Board of Directors may ask the CEO to provide information about the course of business and also, if the Chairman agrees, about individual transactions. Supervision and control of the Executive Board is handled by approving the annual planning and on the basis of detailed quarterly reporting comparing actual and target figures. Quarterly reporting includes data on energy sales and procurement, the income statement and balance sheet (including expected values for the most important key figures, namely energy sales, total operating revenue, operating income, profit, capital expenditure, property, plant and equipment, balance sheet total, equity, return on equity), risks in energy trading (market risks and counterparty risks) and key projects. The Board of Directors also receives quarterly progress reports and final performance reports on key projects, as well as – if specifically requested – status reports on individual business activities. Annual and long-term planning covers corporate objectives, key projects and financial planning. In addition, risk management and auditors' reports support the assessment of business management and the risk situation. Repower has a risk management system which is described in detail in a concept issued by the Board of Directors. The Board of Directors establishes the risk strategy during the first six months of each year. Significant risks must be brought to the attention of the Board of Directors at least once a year, with quarterly updates to advise the Board of Directors of any changes in these risks. A detailed description of the risk and financial risk management policies of the Repower Group can be found on pages 64 to 67. The auditors draw up a comprehensive report once a year documenting the key findings of their audit.