Annual
Report
2017

CORPORATE GOVERNANCE

SHAREHOLDERS STRUCTURE
SHAREHOLDERS STRUCTURE

PART I – INFORMATION ON SHAREHOLDER STRUCTURE, ORGANIZATION AND CORPORATE GOVERNANCE

A. SHAREHOLDER STRUCTURE

I. CAPITAL STRUCTURE

1. CAPITAL STRUCTURE

EDP Renováveis, S.A. (hereinafter referred to as “EDP Renováveis”, “EDPR” or the “Company”) total share capital is, since its initial public offering (IPO) in June 2008, EUR 4,361,540,810 consisting of issued and fully paid 872,308,162 shares with nominal value of EUR 5.00 each. All the shares are part of a single class and series and are admitted to trading on the Euronext Lisbon regulated market.

Codes and tickers of EDP Renováveis SA share: ISIN: ES0127797019
LEI: 529900MUFAH07Q1TAX06
Bloomberg Ticker (Euronext Lisbon): EDPR PL Reuters RIC: EDPR.LS

EDPR main shareholder is EDP – Energias de Portugal, S.A., through EDP – Energias de Portugal, S.A. Sucursal en España (hereinafter referred as “EDP”), with 82.6% of share capital and voting rights. Excluding EDP, EDPR shareholders comprise more than 33,500 institutional and private investors spread across 21 countries with main focus in the United States and United Kingdom.

Institutional Investors represent 99% of Company shareholders (ex-EDP Group), mainly investment funds and socially responsible investors (“SRI”), while Private Investors, mostly Portuguese, stand for 1%.

For further information about EDPR shareholder structure please see chapter 1.3 Organization.

2. RESTRICTIONS TO THE TRANSFERABILITY OF SHARES

EDPR’s Articles of Association have no restrictions on the transferability of shares.

3. OWN SHARES

EDPR does not hold own shares.

4. CHANGE OF CONTROL

EDPR has not adopted any measures designed to prevent successful takeover bids.
The Company has taken no defensive measures for cases of a change in control in its shareholder structure.

EDPR has not entered into any agreements subject to the condition of a change in control of the Company, other than in accordance with normal practice. In the case of financing of certain wind farm projects, lenders have the right to approve change in control at the borrower if the later ceased to be controlled, directly or indirectly, by EDPR. In the case of guarantees provided by EDP Group companies, if EDP, directly or indirectly ceases to have the majority of EDPR then EDP is no longer obliged to provide such services or guarantees. The relevant subsidiaries will be obliged to provide for the cancellation or replacement of all outstanding guarantees within approximately sixty (60) days of the change of control event.

In the cases of intra-group services agreements and according to the Framework Agreement signed between EDP Renováveis S.A. and EDP Energias de Portugal S.A., the contracts will maintain their full force as long as (i) EDP maintains its share capital above 50% or the right to exercise directly or indirectly more than 50% of voting rights on EDPR’s share capital or (ii) even if the share capital of EDP or its voting rights are below 50%, but more than half of the Members of the Board or of EDPR’s Executive Committee are elected through an EDP proposal.

5. SPECIAL AGREEMENTS REGIME

EDPR does not have a system for the renewal or withdrawal of counter measures particularly to provide for the restriction on the number of votes capable of being held or exercised by only one shareholder individually or together with other shareholders.

6. SHAREHOLDERS AGREEMENTS

The Company is not aware of any shareholders’ agreement that may result in restrictions on the transfer of securities or voting rights.

II. SHAREHOLDINGS AND BONDS HELD

7. QUALIFIED HOLDINGS

Qualifying holdings in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholder’s ownerships. Pursuant to the Article 125, of the Spanish Securities Market Law (“Ley de Mercado de Valores”) EDPR is providing the following information on qualifying holdings and their voting rights as of December 31st 2017.

As of December 31st 2017, the following qualified holdings were identified:

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8. SHARES HELD BY THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BOARDS

The Members of the Board of Directors of the Company and it delegated Committees, do not own directly or indirectly any shares from EDPR as of December 31st 2017. The last share transactions made by EDPR’s Board Members were reported in August 2017 to the regulatory and supervisory entities (CMVM – Comissão de Mercado de Valores Mobiliários – in Portugal and CNMV – Comisión Nacional del Mercado de Valores – in Spain) following EDP’s General and Voluntary Public Tender Offer for the acquisition of the shares issued by EDPR.

9. POWERS OF THE BOARD OF DIRECTORS

The Board of Directors is vested with the broad-ranging powers of administration, management, and governance of the Company, with no other limitations besides the powers expressly assigned to the General Shareholders’ Meetings in the Company’s Articles of Association (specifically in article 13) or in the applicable law. Within this context, the Board is empowered to:

  • Acquire personal property, real state, rights, shares and participations for the Company under any onerous or lucrative title;
  • Dispose of mortgage or encumber Company’s property, real state, rights, shares and participations and cancel mortgages and other rights;
  • Negotiate and enter into loans and credit operations as deemed necessary;
  • Negotiate and formalize acts and contracts with public entities or private individuals;
  • Take any civil and criminal actions involving the Company, representing it before the functionaries, authorities,
    corporations, governmental, administrative, economic-administrative, contentious-administrative and judicial tribunals, labor courts and the labor sections of the Supreme Courts and of the High Courts of the Autonomous Communities, without limitation including before the European Court of Justice, and in general, before the public administration at all levels intervening in, promoting, monitoring and closing cases, trials and proceedings, consenting to rulings, filing appeals, including cassation and other extraordinary appeals, desisting and agreeing, issuing notices and summonses and granting Power of Attorney to solicitors and other proxies, with the faculties deemed necessary in each the case, including general powers for legal proceedings and the special powers as necessary, as well as revoking such powers;
  • Agree the allotment of dividends;
  • Convene the General Meetings and submit the proposals to the shareholders for their consideration;
  • Conduct the Company’s operations and the organization of its work and operations, staying abreast of the Company
    businesses and operations, managing the investment of funds, making extraordinary depreciations of its obligations
    and doing what deemed necessary to achieve objectives of the Company;
  • Appoint and remove Directors and other technical and administrative personnel of the Company, defining their responsibilities and their remuneration;
  • Settle the transfer of the Company’s registered office within the same municipal area;
  • Incorporate legal entities under the terms stipulated in the law; assigning and investing in them all kind of assets and rights, as well as executing merger and cooperation agreements, association, groups, joint ventures, and joint property agreements and settle their amendment, transformation and termination;
  • All other powers expressly assigned to the Board in the Articles of Association or in the applicable law, being this enumeration merely indicative and in no way restrictive. As of April 9th 2015, the General Shareholders’ Meeting approved the delegation to the Board of Directors of the power to issue in one or more occasions both:
  • Fixed income securities or other debt instruments of analogous nature
  • Fixed income securities or other type of securities (warrants included) convertible or exchangeable into EDP Renováveis, S.A. shares, or that recognize at the Board of Directors’ discretion the right of subscription or acquisition of shares of EDP Renováveis, S.A. or of other companies, up to a maximum amount of three hundred million Euros (EUR 300,000,000) or its equivalent in other currency.

As part of such delegation, the General Shareholder’s Meeting delegated into the Board of Directors the power to increase the share capital up to the necessary amount to execute the power above. Additionally, it was also approved to authorize the Board of Directors for the acquisition of own shares by the Company and/or the affiliate companies. These delegations may be exercised by the Board of Directors within a period of five (5) years since the proposal was approved, and within the limits provided under the law and the By-Laws.

The General Shareholders’ Meeting may also delegate to the Board of Directors the power to implement an adopted decision to increase the share capital, indicating the date or dates of its implementation and establishing any other conditions that were not specified by the General Shareholders’ Meeting. The Board of Directors may use this delegation wholly or partially, and may also decide not to perform it in accordance with the situation and conditions of the Company, the market, or any particularly relevant events or circumstances that justify such decision. of which the General Shareholders’ Meeting must be informed at the end of the time limit or limits for adopting and performing the decision.

10. SIGNIFICANT BUSINESS RELATIONSHIPS BETWEEN THE HOLDERS OF QUALIFYING HOLDINGS AND THE COMPANY

Information on any significant business relationships between the holders of qualifying holdings and the Company is described on topic 90 of this Report.

B. CORPORATE BOARDS AND COMMITTEES

I. GENERAL SHAREHOLDERS’ MEETING

A. COMPOSITION OF THE BOARD OF THE GENERAL MEETING

11. BOARD OF THE GENERAL SHAREHOLDERS’ MEETING

The Members of the Board of the General Shareholders’ Meeting are its Chairman, the Chairman of the Board of Directors or his substitute, the other Directors and the Secretary of the Board of Directors.

The Chairman of the General Shareholders’ Meeting is José António de Melo Pinto Ribeiro, who was elected on the General Meeting of April 8th, 2014, for a three-year (3) term; and re-elected on the General Shareholders’ Meeting held on April 6th,2017 for an additional three-year (3) term.

The Chairman of the Board of Directors is António Mexia, who was re-elected for a three-year (3) term on the General Shareholders’ Meeting held in April 9th, 2015.

The Secretary of the Board of Directors is Emilio García-Conde Noriega who is also the Secretary of the General Shareholders’ Meeting, and was appointed as Secretary of the Board of Directors on December 4th 2007. The Secretary of the Board of Directors’ mandate does not have an end of term date according to the Spanish Companies Law since he is a non-Member of the Board.

The Chairman of the General Shareholders’ Meeting of EDPR has at his disposal, the necessary human and logistical resources required for the performance of his duties. Therefore, in addition to the resources provided by the Company’s General Secretary, the Company hires a specialized entity to give support to the meeting and to collect, process and count the votes submitted by the shareholders on each General Shareholders’ Meeting.