Healthy results with sustainability strategy

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The Supervisory Board takes pleasure in presenting the 2013 Annual Report and Financial Results for the Eneco Holding N.V., as drawn up by the Board of Management.

In 2013, just as in the preceding years, Eneco achieved healthy results with its sustainability strategy. This was a particularly capable performance given the current market conditions – a performance of which the Supervisory Board is proud. Very few (energy) companies are so consistent in their dedication to sustainability, and no other major energy company invests more in the Netherlands and Belgium in making household energy sustainable.

A developing market

Eneco has dedicated itself entirely to a sustainability strategy since 2007. The crisis on the financial markets, the economic market developments and increasing price competition from a growing number of collectives and auctions, have all changed the dynamic substantially in the market in which Eneco operates. At the same time the importance of sustainability is being accepted more widely, as witnessed by the SER national energy agreement signed by 40 organisations in September 2013. In it, the parties commit to firm agreements to quadruple the share of renewable energy in the Netherlands over the coming decade.

The challenges Eneco faces are forging close bonds with its clients, employees, shareholders and other interested parties, and preventing unbundling of Eneco’s network and supply activities. Eneco is able to respond to this market dynamic by consistently keeping its sustainability strategy up-to-date.

Supervisory Board changes

The movement towards an open, commercial playing field in which close ties with customers are crucial, demands regular renewal and continuity within the Supervisory Board’s composition. In this composition, a balanced distribution of the seats will continue to be taken into account. The appointment of Marike van Lier Lels in September 2013 achieved a further enhancement of know-how in marketing, communication and client retention. Three supervisors step down in March 2014: John Lintjer, Kees van Dongen and Joop Drechsel. The selection of a new supervisor with financial knowledge and experience has begun in good time. It is expected that this supervisor will be presented during the shareholders’ meeting of 28 March 2014. For the sake of continuity, two of the serving Board members – Klaas de Vries and Henk Dijkgraaf – will continue their position for a longer period and will be presented for re-nomination.

A thematic approach to the Supervisory Board meetings in 2013 contributes to a renewed focus on the way the Supervisory Board functions. The Board’s meetings begin with news and safety, including ICT security. Accidents resulting in absences and safety cases are discussed immediately. The Board then allocates considerable time for the main theme, then followed by other decisions. Other fixed topics in the Supervisory Board meetings are the strategy and the associated risks which Eneco identifies, and advice which has been issued by the Central Works Council. In 2013, the Supervisory Board combined two meetings with working visits: in July to the Eneco Energy Trade department and in October to Eneco Belgium, where among other things the Board listened-in on call-centre staff during client conversations.

On the 2013 agenda

Main themes on the Supervisory Board meeting agendas in 2013 included the realisation of the sustainability strategy, the relationship with all parties involved with Eneco, and the organisational change, ‘Customers First’. The pronouncement of the Court of Justice in Luxembourg on 22 October 2013, regarding the ‘group prohibition’ (prohibition on integrated energy companies) and its consequences, was also a recurring theme. Other themes the Supervisory Board discussed were Eneco’s retail strategy, its growth plan, shale gas and the consequences for gas markets, internal alignment, and compliance and integrity.

In 2013 the Supervisory Board approved a number of major investments, including the Moy wind project in Scotland (60 MW) and the wind farm in Delfzijl Noord (60 MW). The 19 wind-turbines in Delfzijl Noord will be installed in 2014, and will generate electricity for some 55,000 households. In terms of the project scheduling, Project Moy will be operational by January 2016. The Board discussed the status of high-impact projects like the Luchterduinen wind farm, the Leiding over Noord heat pipeline and the Bio Golden Raand biomass power station. The Board also followed the process leading to the creation of the SER national energy agreement and the steps towards the definitive ‘Methodebesluit’ or Method Decision (new tariff regulation 2014 up to and including 2016) of the Netherlands Authority for Consumers and Markets, or ACM. The Board discussed the strategic, operational and financial progress of Eneco. Both the Supervisory Board and the Audit Committee are following developments in the financial markets closely. The Treasury Statute was updated in this context, and the Treasury Plan 2013 was approved. The Audit Committee discussed the 2012 Financial Statements, the 2012 Accountant’s Report, the 2013 Audit Plan and the 2013 Management Letter. The 2012 Financial Statements and the 2012 Accountants’ Report were discussed by the Supervisory Board in the presence of Deloitte Accountants.

Audit Committee

In the reporting year, in addition to the usual topics of financial reporting, the Audit Committee devoted consideration to the financial-strategic framework for the longer term, and the short-term performance-improvement programme. Additional financing and the quality of the cash-flow planning were also topics for discussion in the Audit Committee’s meetings.
In 2013 further progress was made on redemption of Cross-Border Leases – transactions entered into in the period 1997-2000 for a major part of the gas, electricity and heating grids. ICT issues such as innovation and security are regular topics on the agenda. Alongside the focus on preventive risk management, attention was also devoted to measures to secure operational continuity.

Consultations and attendance

In 2013 the Supervisory Board held nine regular meetings, one of which was telephonic. The majority of the Board members attended the annual general meetings in March and September 2013. Two Board members took part in rotation in the consultation meetings of the Central Works Council.
The Audit Committee met seven times, with the participation of Deloitte Accountants. The internal auditor was also present during a part of most meetings. One of the meetings was conducted in writing. The Chairman of the Audit Committee held regular discussions with the CFO and the external accountant.
The Selection and Appointment Committee met twice in 2013, and the Remuneration Committee once. There was also discussion every two weeks between the Chairman of the Supervisory Board and the Chairman of the Board of Management, and there was regular telephonic discussion between the members of both boards.
Both boards also held regular discussions with the Shareholders Committee and the Rotterdam, The Hague and Dordrecht shareholders. The open nature of the dialogue on Eneco with the shareholders contributed to the good relations.


Meeting date

Edo v.d. Assem

Mirjam Sijmons

Klaas de Vries

John Lintjer

Henk Dijkgraaf

Kees van Dongen

Joop Drechsel

Marike van Lier Lels

Friday 25 January 2013

x

x

x

x

x

x

x

°

Friday 1 March 2013

x

x

x

x

x

x

°

Wednesday 27 March 2013

x

x

x

x

x

x

°

Friday 31 May 2013

x

x

x

x

x

x

°

Friday 5 July 2013

x

x

x

x

x

x

x

°

Friday 2 August 2013 (telephonic meeting)

x

x

x

x

x

x

°

Friday 11 October 2013

x

x

x

x

x

x

x

Friday 15 November 2013

x

x

x

x

x

x

x

x

Friday 13 December 2013

x

x

x

x

x

x

x

x present

° not yet appointed

Remuneration

The 2013 Remuneration Report is available on Eneco’s corporate website. The remuneration of directors and officers is detailed further Note 6 of this Annual Report.

Other

In note 31 of the financial statements, reference is made to a transaction with one of the members of the Supervisiory Board.

Advice

Eneco concluded 2013 with a satisfactory result. The Supervisory Board would like to thank the management, employees and all Eneco’s external partners for their considerable dedication and efforts. The Board would like to express a specific vote of thanks to Wim Weijers, secretary of the Supervisory Board until mid-2013, for his significant contribution to Eneco and its corporate predecessors over some 34 years.

The Supervisory Board regards the future of the company with confidence.
We would advise the shareholders to adopt the 2013 Financial Statements.

On behalf of the Supervisory Board, Eneco Holding NV

Ir. E.H.M. van den Assem
­
Rotterdam, 28 February 2014