Corporate Governance

Corporate Governance

Suez Holdings is a Maltese private limited company, of which duties and responsibilities of the executive bodies are defined according to Maltese law. Suez Holdings Ltd complies with the Maltese Companies Act and all other applicable Rules of The Govt. of Malta

Duties and Responsibilities of Executive Bodies

The highest decision making bodies in Suez Holdings are the General Meeting of the shareholders, the Board of Directors and the Chairman and CEO of the Group.

General Meeting

The highest decision-making power in Suez Holdings is vested in the General Meeting. In the General Meeting shareholders decide on the adoption of the financial statements, the use of the profits shown on the balance sheet, the discharge from liability of the Board members as well as the Chairman and CEO, the number of Board members and the remuneration paid to the Board members and auditors. The General Meeting elects the members of the Board of Directors and the Auditor. In addition, any other business mentioned in the notice of the meeting is dealt with during the General Meeting.

The General Meeting of Suez Holdings is summoned by the company’s Board of Directors. According to the company’s Articles of Association, the Annual General Meeting must be held each year before the end of June, on a date set by the Board of Directors. Suez Holding’s Annual General Meeting for 2015 was held on 12 March 2016.

Board of Directors

The duties and responsibilities of the Board of Directors are primarily defined by the Maltese Companies Act and the Articles of Association of Suez Holdings. The Board of Directors controls and supervises the operational management of the company. The Board of Directors is responsible for ensuring that the company’s financial accounting and financial management are properly organised.

The Board of Directors’ Rules of Procedure specifies the Board’s duties, business to be handled, meeting practices and the decision-making processes. According to the Rules of Procedure, the Board of Directors handles and decides on all matters that are financially, commercially or fundamentally significant to the Group’s operations.

The Board of Directors confirms the Group’s strategy, budget, corporate structure, major corporate arrangements and investments. Furthermore, the Board of Directors approves and confirms the principles of risk management, appoints and discharges the Chairman and CEO, and decides on the terms and conditions of employment for the President and CEO.

The Board of Directors regularly evaluates its own operations and working practices. The Board also carries out a self-assessment in relation to its operations and working practices once a year.

As specified in the Articles of Association, the General Meeting elects a minimum of three and a maximum of six Board members. The Board members are elected for one year at a time so that the term of office for all Board members ends at the close of the following year’s Annual General Meeting.

The Board of Directors elects a Chairman and a Vice Chairman from among its members. The Annual General Meeting for 2013 elected the following five Board members: Shiv Shankaran Nair, Chairman, Ms.Myriam Vermeisch, Dr. Rafail Martinez de Lima, Dr.Abdallah Kablan. The biographical details and the information on the holdings of the members of the Board of Directors are available at Our Leadership page.

Ms Audrey Garcia Gili, , serves as the secretary for the Board of Directors. In 2014 the Board of Directors convened 17 times (2013: 13). The average attendance of the members was 89% (2013: 97%).

Board Committees

The CEO is responsible for ensuring that the company’s accounting is legally arranged and that the company’s financial management is reliably organised. The CEO is responsible for ensuring that the objectives, strategies, future plans, outlines and goals set by the Board of Directors are implemented and achieved by the Suez Group. The CEO prepares the matters to be decided by the Board of Directors and executes the decisions made. The CEO is appointed by the Board of Directors. The Board of Directors decides on the terms and conditions of President and CEO´s employment, including the salary, other compensations and fringe benefits that are defined in the CEO’s employment contract. Dr Rafail Martinez de Lima was the CEO of Suez Holdings in 2015. The biographical details of the President and CEO are available at Our Leadership page.

Executive Board

The duty of Suez’s Executive Board is to assist the Chairman and CEO. The Executive Board consists of the directors of the business units and the units supporting business operations. The Executive Board is responsible for integrating the activities of the Group and its parts into an operating plan associated with the annual budget to implement Suez Group’s strategies. During the year the results of the operations in relation to the budget and operating plan are handled in the Executive Board monthly.

Remuneration

Suez Group’s remuneration schemes have been designed to promote competitiveness and long- term financial success of the company and to contribute to the favorable development of shareholder value. Remuneration schemes are based on predetermined and measurable performance and result criteria. Suez Holdings has long-term and short-term performance based remuneration schemes.

The General Meeting decides on the remuneration payable to the Board of Directors. The Board of Directors decides on the remuneration and other compensation payable to the President and CEO.

Auditing

According to the Maltese Companies Act, statutory audits comprise the auditing of the accounts, financial statements, Board’s report and administration. The General Meeting must be provided with an Auditor’s Report including an opinion on whether the financial statements give correct and sufficient information about the Group’s result and financial position at the close of the financial year. The Auditors report to the Board of Directors on their work and observations.

The Annual General Meeting 2014 elected Capstone Group as the Auditor of Suez Holdings and Mr Kris Baron (ACCA) has been appointed as Principal Auditor.

Internal Control and Risk Management

Internal control

Internal control comprises of processes that provide reasonable assurance regarding the achievement of the company’s objectives in the efficiency of operations, cost effective use of resources, reliability of financial reporting and compliance with the laws and regulations as well as the internal practices. Suez’s Board of Directors and management take part in internal control processes. The objective of Suez’s internal control is to ensure that:

• company’s operations are efficient and profitable

• financial and operational information is reliable

• entire Group complies with the regulations and policies

Internal control is not a separate process, but part of company’s day-to-day operations. Internal control covers Suez Group’s processes, policies and organisational structures that help to ensure that the company is achieving its objectives, the business conduct is ethical, the assets are managed responsibly and that financial reporting is organised properly.

Internal control includes, for example, monthly management reporting, revenue recognition management, HR management policies, processes defined by the quality system, Group’s approval policy delegation of authority and monitoring the compliance with regulations, policies and practices.

Risk Management

Risk management is an integral part of Suez’s internal control. Risk management and internal control are integrated at the process level. Risk management refers to a systematic process to identify, evaluate and control risks due to external factors as well as risks arising from the Group’s own activity.

The Board of Directors has ratified the principles of risk management defining the risk management objectives and general practices, and also the tasks and responsibilities connected with risk management.

The Chief Financial Officer is in charge of coordinating risk management within the Group. The business units have the primary responsibility for identification and management of any and all risks that have an impact on their operations. Risk evaluation and management is an important part of the Group’s annual business planning and strategy process, budgeting, as well as the preparatory and decision making processes connected with commercial offers, agreements and investments and other operative activities.

Suez’s business is subject to various risks and uncertainties. Suez Group evaluates key risks related to its business continuously and up to date information on the business and other risks related to Suez Holdings are disclosed periodically in the annual and interim reports

Internal Audit

The purpose of the internal audit is to ensure that the business processes, financial processes and administrative processes of the company are performed in compliance with corporate governance principles. Activities are controlled to ensure profitable business operations.

Internal audit at Suez Holdings is part of the financial administration. Internal audit is conducted according to in advance prepared plan on case by case bases, if a need for an audit is detected. Whenever necessary, external experts are used to complement the audit activities. Where appropriate, the results of internal audits are reported to the Board of Directors.

External auditor verifies and report to the Board of Directors in an ongoing manner about their observations concerning Suez’s administration and operations.