Verbund : Consolidated Corporate Governance Report 2023

Consolidated

Corporate Governance Report

in accordance with Section 267b of the Austrian Commercial Code (UGB)

Corporate governance - framework

VERBUND AG is a listed stock corporation domiciled in Austria. Its corporate governance framework is derived from Austrian and European law, including, but not limited to, stock corporation and capital market law, the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) including the regulations governing employee co-determination, the Company's Articles of Association, the rules of procedure for the Company's Boards and, finally, the Austrian Code of Corporate Governance (Österreichischer Corporate Governance Kodex, ÖCGK).

Commitment to the Austrian Code of Corporate Governance

Declaration of conformity

VERBUND has declared its unconditional commitment to the Austrian Code of Corporate Governance (ÖCGK). The Executive Board and Supervisory Board see it as their primary duty to comply with all of the rules of the Code as fully as possible and to maintain and continue to develop the Group's high internal standards. The Code as amended in January 2023 was applied during financial year 2023 and adhered to in accordance with the explanatory notes in this report. Active implementation of the requirements of the Code is intended to ensure responsible management and control of the Group directed at sustainable, long-term value creation and to create a high level of transparency for all stakeholders. VERBUND will continue to actively adhere to the Code as amended during financial year 2024. Applying the Code as fully as possible is an essential building block for strengthening the trust placed in the Group by shareholders, business partners, employees and the general public.

Evaluation

In accordance with C Rule 62 of the Austrian Code of Corporate Governance (ÖCGK), compliance with the Code and the accuracy of the related reporting is evaluated externally by an independent auditor at regular intervals. The last such evaluation was carried out for 2022 and resulted in a positive report. The next evaluation is planned for financial year 2025.

Scope of reporting

A consolidated corporate governance report is presented as required under statutory provisions. As a combined report, it also includes the report in accordance with Section 243c of the Austrian Commercial Code (UGB), and key items of this report have been expanded beyond the listed parent company to include the entire Group. Opinion 22 of the Austrian Financial Reporting and Auditing Committee (AFRAC) has been followed with respect to the requirements on content.

This Consolidated Corporate Governance Report includes not only the disclosures required by law but also the additional content as intended by the Code of Corporate Governance. In addition, further information is provided on the relevant indicators under the Global Reporting Initiative (GRI), the global standard on sustainability reporting.

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The Austrian Code of Corporate Governance as amended is available on the website of the Austrian Working Group for Corporate Governance at www.corporate- governance.at

Executive Board

Composition of the Executive Board

The Executive Board was composed of three members in financial year 2023.

The term of office of all members of the Executive Board ended on 31 December 2023. At its meeting on 27 March 2023, the Supervisory Board therefore resolved to re-elect Mag. Dr. Michael Strugl MBA as Chairman, Dr. Peter F. Kollmann as Vice-Chairman and Mag. Dr. Achim Kaspar.

At the same time, the Supervisory Board appointed Dr. Susanna Zapreva-Hennerbichler as an Executive Board member with effect from 1 January 2024.

Executive Board

Board functions of Executive Board members within the Group

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GRI 2-9 GRI 405-1

GRI 2-15

Board functions of Executive Board members within the Group

Supervisory Board appointments of Executive Board members outside the Group

1 As at 31 December 2023, VERBUND held a 35.17% equity interest in KELAG.

Work procedures and allocation of responsibilities

The Executive Board manages the Group's business activities and represents the Group externally.

The rules of procedure for the Executive Board govern the allocation of responsibilities and how the members of the Executive Board are to work together. In addition, they lay down the Executive Board's duties to notify and report, and contain a list of measures that require approval by the Supervisory Board. The measures requiring approval also include material transactions proposed by the Group's main subsidiaries.

The allocation of responsibilities within the Executive Board is part of the rules of procedure and defines the range of duties of the Executive Board members without prejudice to the overall responsibility of the Executive Board. The allocation of responsibilities was updated as of 1 January 2024 on the appointment of a fourth member of the Executive Board.

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Allocation of responsibilities 2023

Supervisory Board

The Supervisory Board has also explicitly affirmed its commitment to the Austrian Code of Corporate Governance. Consequently, the Code, together with the Austrian Stock Corporation Act (Aktiengesetz, AktG) and the Austrian Commercial Code (UGB), the Austrian Labour Constitutional Act (Arbeits- verfassungsgesetz, ArbVG), the Company's Articles of Association and the rules of procedure for the Executive Board and the Supervisory Board, has become the basis for the Supervisory Board's actions.

The statutory provisions specify that the Supervisory Board must be comprised of members elected by the Annual General Meeting in accordance with the requirements of the Austrian Stock Corporation Act (shareholder representatives) and members appointed by the employee representatives.

Personal details, chairpersons and other Board functions

The Supervisory Board is led by a chairperson. The chairperson and two vice-chairpersons are elected each year by the Supervisory Board from among its members.

As at 31 December 2023, the Supervisory Board has a total of 15 members - ten shareholder representatives elected by the Annual General Meeting and five employee representatives appointed by the Works Council.

On 25 April 2023, Mag. Jürgen Roth, Mag. Christa Schlager, Mag. Stefan Szyszkowitz and Dipl.- Ing. Peter Weinelt were re-elected to the Supervisory Board. At the constituent meeting of the Supervisory Board following the election, Dr. Hlawati was reappointed 1st vice-chairperson and Dr. Christine Catasta 2nd vice-chairperson of the Supervisory Board. The employee representatives appointed Hans Peter Schweighofer to the Supervisory Board to replace Doris Dangl. Otherwise, there were no changes to the composition of the Supervisory Board in financial year 2023.

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GRI 2-9 GRI 2-11

GRI 2-10

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Supervisory Board appointments or comparable roles in publicly traded companies and other significant companies have been listed in relation to (ancillary) functions. Full-time functions are listed where appropriate.

Employee representatives

The appointment of employee representatives by the Group's employee representatives is for an unlimited period and can be revoked at any time.

Of the Supervisory Board members, 13% are between the ages of 30 and 50 and 87% are over 50.

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