Corporate Governance (english)

28 Groupstructureandshareholders29 Capitalstructure30 BoardofDirectors33 GroupExecutiveBoard35 Contentandmethodofdetermining

compensation35 Shareholdersparticipationrights36 Changeofcontrolanddefensivemeasures36 Auditors37 Informationpolicy37 Significanteventssincethebalancesheetdate

Corporategovernance

1 Groupstructureandshareholders

GroupstructureThe Conzzeta Group is organized in seven businessunits:SheetMetalProcessingSystems,GlassProcessingSystems,AutomationSystems,FoamMaterials,SportingGoods,GraphicCoatingsandRealEstate.AtGrouplevel,Corporate Staff supports the activities of the holdingcompany, Conzzeta AG, and the operational units.ConzzetaAG, with its registered offices in Zurich, hasdirectorindirectequityholdingsinthecompanieslistedonpage66etseq.ConzzetaAGistheonlycompanythatis listed. The Conzzeta bearer share (Swiss securitynumber265798,ISINCH0002657986)islistedontheSIXSwissExchangeAG.Themarketcapitalization(bearershares)asofDecember31,2010,wasCHF771400000;the total capitalization (registered and bearer shares)amountedtoCHF874000000.

TheConzzetaGroupattachesimportancetoatransparentmanagementstructureandopendialogue.TheGroupisguidedbytheprinciplesoftheSwissCodeofBestPracticeforCorporateGovernance,whichitimplementsinaccordancewithitssizeandstructure.Italwaysactsincompliancewithlegalrequirementsandurgesitsemployeestodolikewise.ThefollowingreportisbasedontheSIXSwissExchangeAGDirectiveonInformationrelatingtoCorporateGovernance,validonDecember31,2010,insofarasapplicabletoConzzetaAG.

Thiscorporategovernancereportdoesnotincludeissueswhichcorrespondtolegalnorms.Incertainselectedcases,so-callednegativedeclarationsaregiven.

Significantshareholders

Percentageofsharesrepresented

Percentageofnominalcapital

in% in%

TEGULAAG,Zurich 81.8 74.2

Nodisclosureswerereceivedinthereportingyear.

Corporategovernance

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2 Capitalstructure

CapitalandsharesThesharecapitalisfullypaid-up.TherewasnoauthorizedorconditionalcapitalasofDecember31,2010.

BearersharesparCHF100

RegisteredsharesparCHF20 Total

Numberofshares 406000 270000 676000

SharecapitalinCHF 40600000 5400000 46000000

EachsharehasonevoteattheGeneralMeetingofShareholders.Thedividendrightsoftheregisteredandbearersharesareproportionaltotheparvalueofthetwosharecategories.

ChangesinsharecapitalThesharecapitalofConzzetaAGhasnotchangedinthelastthreereportingyears.

LimitationsontransferabilityandnomineeregistrationsTheregisteredsharesarenotsubjecttoanytransferabilitylimitations.Accordingly,nomineesarelistedintheshareregister.

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3 BoardofDirectors

1 2 3

4 5 6

GuidingprincipleThe Board of Directors provides a personnel and or-ganizational framework for the companys leadershipto exercise its responsibilities.The Board of Directorsassessestheprogressmadetowardachievingtargetsaswellasthefinancialresults.Instrategicdecisions,itseeks

to strikeabalancebetweenopportunitiesand risks inthecontextoffinancialsustainability. Itdelegatestheresponsibilityformanagement,withcomprehensivepow-ers,tothemembersoftheGroupExecutiveBoard,en-ablingtheexecutivestostriveproactivelyforbusinesssuccess.

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MembersoftheBoardofDirectors1 JacobSchmidheinyLic.oec.publ.born1943

ChairmanoftheBoardofDirectorsMemberoftheBoardofDirectorssince1977In1976,hebecameamemberoftheExecutiveBoardofZrcherZie-geleien,todayConzzetaAG.From1978to2001,hewasPresidentandChiefExecutiveOfficer.Thetransitionfromtheconstructionmaterialsgrouptothepresent-dayindustrialholdingcompanytookplaceunderhisleadership.JacobSchmidheinyhasbeenChairmanoftheBoardofDirectorsofTEGULAAG,Zurich,since1984.

2 MatthiasAuerDr.iur.born1953MemberoftheBoardofDirectorssince1996Hehasprac-ticedasalawyerandnotarypublicinGlarussince1981.HeisamemberoftheCantonalCouncilinGlarus.MatthiasAuerisamemberoftheBoardofDirectorsofTEGULAAG,Zurich.

3 ThomasW.BechtlerDr.iur.,LL.M.born1949MemberoftheBoardofDirectorssince1987Since1982,hehasbeenamemberoftheBoardofDirectorsandCEOofHestaAG,Zug.From1975to1982,heheldvariousmanagerialpositionsatLuwaAG.ThomasW.BechtlerisVice-ChairmanoftheBoardofDirectorsofSikaAG,Baar,andamemberoftheBoardofDirectorsofBucherIndus-triesAG,Niederweningen.

4 WernerDubachDipl.Ing.Chem.ETH,MBAborn1943MemberoftheBoardofDirectorssince1993SincethesaleofthebeveragesandrealestatesegmentsofEichhofGroupin2008,hehasheadedDatacolorAG,Lucerne(formerlyEichhofHoldingAG)asChairmanoftheBoard.From1998to2008,hewasChairmanoftheBoardofDirectorsandChiefExecutiveOfficerofEichhofHoldingAG,Lucerne.In1983hebecameCEOandamemberoftheboardofBrauereiEichhof.Between1970and1983,heheldvariousmanagerialpostswithintheEichhofGroup.WernerDubachisaboardmemberofanumberofstart-upenterprises.

5 PhilipMosimannDipl.Ing.ETHborn1954MemberoftheBoardofDirectorssince2007HejoinedBucherIndustriesAG,Niederweningen,in2001,becomingChiefExecutiveOfficerin2002.Between1980and2001,PhilipMosimannheldanumberofmanagerialpositionswiththeSulzerGroup,Winterthur,includingSulzerInnotecAG(19801992),asHeadofDivisionSulzerThermtec(19921996)andasHeadofDivisionSulzerTextil,Rti(19972000).

6 RobertF.SpoerryDipl.Masch.-Ing.ETH,MBAborn1955MemberoftheBoardofDirectorssince1996HeisChairmanoftheBoardofDirectorsofMettler-ToledoInternationalInc.,Greifen-see,whichhealsoledasCEOfrom1993to2007.RobertF.SpoerryisamemberoftheBoardofDirectorsofHolcimLtd,Jona,SonovaHoldingAG,Stfa,GeberitAG,Jona,andSchaffnerHoldingAG,Luterbach.

AllmembersoftheBoardofDirectorsareSwissnationals.Nomember is actively involved in the executiveman-agementoftheConzzetaGroup,norhasbeeninthelastthreeyears.Apartfromtheroleofshareholder,nomem-berhassignificantbusinessrelationswiththeGroup.

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ElectionandtermofofficeIn accordance with the Articles of Incorporation, theBoardofDirectorscomprisesat leastfourandnomorethaneightmembers.Itiselectedforatermofthreeyears.ThenexttotalrenewalisduetotakeplaceattheAnnualGeneralMeetingofShareholdersin2011.Therearenolimitationsontermsofoffice.

InternalorganizationTheBoardofDirectorsactsasanintegralbodyanddoesnotappointspecialcommittees.TheChairmanisinvolvedinandsupervisesthepreparationofthebasesfordeci-sionof theBoardofDirectors and the implementationofitsdecisions.Thesubstantivepreparationandopera-tional implementationof theBoardsdecisionsare theresponsibilityoftheGroupChiefExecutiveOfficer.Thisapplies in matters of strategy, financing, personnelappointmentsandimportantindividualtransactions.

TheGroupChiefExecutiveOfficer,theGroupChiefFinancialOfficer,theGeneralCounselandtheSecretaryoftheBoardattendBoardmeetings,unlesstheBoardofDirectorsdecidesotherwise.Inaddition,headsofbusi-nessunits,seniorexecutivesfromGroupcompanies,and,onoccasions,externalconsultantsarealsocalledupontotakepartinBoardmeetings,dependingonthespecifictopictobediscussed.Annually,theBoardofDirectorsholdsfourorfiveordinaryhalf-tofull-daysessions.Fivesuchmeetingswereheldin2010.

Risk assessment: theGrouphasmethodical proce-dureswhichservetheBoardofDirectorsasabasisforitsassessmentofthebusinesssituation,aswellasstrategic,financialandoperationalrisks.Inadditiontothefinancialreports and analyses (see Instruments of informationandcontrol),theseincludetheinternalcontrolsystemaswellasstrategicandoperativeriskmanagement.

CompetencesTheBoardofDirectorshasdelegatedresponsibilityformanagementoftheGroupsbusinesstothemembersoftheGroupExecutiveBoard,inaccordancewiththepow-erssetforthintheArticlesofIncorporation.

ThemembersoftheGroupExecutiveBoardandthemanagementsoftheindividualbusinessunitshaveexten-sivecompetencesinregardtothestrategicandoperationalmanagementoftheunitsassignedtothem.Itistheirtask,throughthecarefuldevelopmentofhuman,materialandorganizational resources, to deliver a competitive per-formanceinfuture-orientedindustriesaswellasrobustfinancialresults.Decision-makingcompetencesaregradedaccordingtotheirsignificanceandfinancialmagnitude.

TheBoardofDirectorshasthefollowingmainresponsi-bilities: determinationoftheGrouporganization appointmentofthemembersoftheGroupExecutiveBoard

supervisionofGroupmanagementandevaluationofprospectsandresults

determinationof theGroups strategic and financialgoals ratificationofthemainfeaturesofthebusinessunitstrategies

decisionsonimportantinvestments,divestments,proj-ects and financial obligations, the decision-makingcompetencebeing limitedtosumsexceedingthresh-oldsbetweenCHF3millionandCHF10million

determinationoftheprinciplesofaccounting,financialplanning,internalcontrollingandreporting

assessmentoftherisksituationoftheGroup,evaluat-ingtheopportunitiesandthesustainabilityintermsofhumanandfinancialresources.

InstrumentsofinformationandcontrolTheConzzetaGrouphasawell-developedplanningandinformationsystem.Itisbuiltfromthebaseup,becomingincreasinglyconcentratedtowardsthetop.

The Board of Directors is oriented verbally and inwritingaboutthestrategies,plansandresultsofallbusi-nessunits.TheBoardofDirectorsreceivesmonthlywrit-tenreportscomprisingthemainkeyfiguresandacom-mentaryonimportantevents.Everythreemonths,theBoard ofDirectors receives a detailed reportwith thecompletefinancialstatementsofthebusinessunitsandtheGroupandcomprehensivemanagementreports.Onanannualbasis,theBoardofDirectorsispresentedwiththemedium-termandannualplanningasabasisforitsdecisionsonthesematters.TheBoardofDirectorsalsoreceivesareportontherisksituation(seealsopage65),themanagementletteroftheauditorsandthereportontheemployeepensionfunds.

TheBoardofDirectorsmeetsinarotatingcycleforan in-depth reviewofkeystrategicquestionsatGroupand business unit level.At the invitation of the BoardofDirectors, the individualbusinessunitspresent theirsituationandplans.Aspecialdocumentationisproducedfor important individual transactions and presented atBoardmeetingsbythoseresponsible.

TheChairmanoftheBoardofDirectorstakespartinthestrategymeetingsofthebusinessunits,aswellasinsomeclosingdiscussionsandprojectmeetings.

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4 GroupExecutiveBoard

1 RobertSuterDipl.Ing.ETH,MBAborn1958GroupChiefExecutiveOfficersince2009Startingin1995,RobertSuterworkedforABBinanumberofmanagementpositions.Mostrecently,asamemberofmanagementintheTransformers-businessunit,withworldwideresponsibilityfortheSmallPowerandTractionTransformersproductgroup.Between2000and2005,hewasheadoftheHighVoltageProductsbusinessunitandalsoservedasheadofABBoperationsinKorea.From1995to1999,RobertSuterwasCEOatMicafil.Before1995,heworkedatCellpackAG(asdivisionheadinCanadaandSwitzerland)andatOerlikonContravesAGasadevelopmentengineerintheaerospacefield.

2 BartJ.tenBrinkDipl.Ing.VATTilburg,Nether-landsborn1964HeadoftheFoamMaterialsbusinessunitsince2009From1991,heservedinvariousmanagementandseniormanagementpositionswithintheinternationalfoammanufac-turinggroupRecticelN.V.,forthelasttenyearsasheadoftwostrategicbusinessunits,compositefoamsandacousticalproducts,withworldwideresponsibility.From1995to1998,hewasasTech-nicalDirectorandIndustrialManagerresponsiblefortheNordflexGroupScandinavia(jointventureofRecticelInt.andShellScandinavia).Between1992and1995,heservedasPlantManagerofRecticelIndustryBuren.BartJ.tenBrinkisaDutchcitizen.

1 2 3

4 5 6

7 8 9

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3 SergeEntleitnerMag.rer.soc.oec.born1964HeadoftheGraphicCoatingsbusinessunitHejoinedSchmidRhynerAGaschiefexecutivein2005.Since2009anautonomousbusinessunitoftheConzzetaGroup,thecompanywaspreviouslyman-agedasOtherIndustrialActivities.From2000to2005,hewasamemberofdivisionalmanagementofSefarAGinThal.AsAssistantVice-President,hewasresponsiblefordistribution,marketingandthebranchesinEurope,LatinAmericaandAfrica.Priortothat,heheldvariousmanagementpositionsinthetextilemachineryindustry.SergeEntleitnerisanAustriancitizen.

4 RichardJakobDipl.El.-Ing.ETHborn1950HeadoftheGlassProcessingSystemsbusinessunitsince2007Heservedinvariouspositionswith-intheSchindlerGroup,mostrecentlyheadingthecorporatetaskforce.From2000to2005,hewasSeniorVice-PresidentinchargeoftheEasternEuropemarketregionandlaterNorthernEurope.Beforethat,asamemberofexecutivemanagementofSchindlerSwitzerland,hewasresponsiblefortheprofitcenternewinstallationsandassembly,atSchindlerFranceforthehomemarketbusinessandasGeneralManagerforvariousmarketregionsinSwitzerland.

5 KasparW.KelterbornLic.oec.HSGborn1964GroupChiefFinancialOfficersince2006From2003untilmid-2005,hewasCFOandamemberoftheExecutiveBoardofUnaxisGroup.From1996to2002,heheldvariousinternationalseniorman-agementpositionsintheareaoffinanceatClariantGroup;between1992and1995,heworkedforSandozInternationalAGinSwitzerlandandabroad.KasparW.KelterbornisamemberoftheBoardofDirectorsofSimilasanHoldingAG,Sarnen.

6 MartinPsterEngineerFH,BScineconomics,MBAborn1966HeadoftheAutomationSystemsbusinessunitsince2005HejoinedtheConzzetaGroupin2004asCEOoftheformerSecklerAG.From2002to2004,hewasCEOofFeintoolAuto-mationAG,Aarberg.Between1996and2001,heservedinvariousleadingandmanagementfunctionsinthemachineindustry.

7 RolfG.SchmidLic.oec.HSGborn1959HeadoftheSportingGoodsbusinessunitHejoinedtheConzzetaGroupin1996asHeadofthesportsdivisionofArovaMammutAG.HetookoverasCEOoftodaysMammutSportsGroupAGin2000.Between1985and1995,heheldleadingpositionsinthepharmaceuticalindustryaswellasinthewatchandtouristindustries.RolfG.SchmidisamemberoftheExecutiveBoardofeconomiesuisseandamemberoftheBoardofDirectorsofCFHoldingAG,St.Gallen,andKuhnRikonAG,Zell.

8 RalphSiegleFed.dipl.inrealestatemanagementborn1959HeadoftheRealEstatebusinessunitsince2003From2002to2003,hewasinchargeofportfoliomanagementatMobimoAG,Zollikon.Between1993and1998,hewasateamleaderatLivitImmobilienManagementAG,Zurich,becomingheadofpropertymanagementandamemberofmanagementin1999.

9 FerdiTngiEngineerFH,MBAborn1951HeadoftheSheetMetalProcessingSystemsbusi-nessunitsince2002HejoinedtheConzzetaGroupin2000asHeadoftheMachineryandSys-temsEngineeringbusinessunit.From1997until1999,hewasHeadofdivisionEuropeNorthandamemberofGroupmanagementatAGIECharmillesGroup,LosoneandGeneva.Between1992and1996,hewasamemberofGroupmanagementatAGIEGroup,Losone,withresponsibilityformar-keting,salesandcustomerservices.From1974to1989,heheldvariousmanagementpositionsintheprecisioninstrumentandmachineindustry.

With the exceptionof SergeEntleitner andBart J. tenBrink,allmembersoftheGroupExecutiveBoardareSwissnationals.

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5 Contentandmethodofdeterminingcompensation

Theamountofcompensationreceivedbythemembersof the Board of Directors and of the Group ExecutiveBoardisreportedinthenotestothefinancialstatementsofConzzetaAG(page73).

InaccordancewiththeArticlesofIncorporation,themembersoftheBoardofDirectorsdeterminetheirowncompensationonanannualbasis,takingaccountofthepersonalcontributionthateachhasmadeandthefinan-cialsituationofthecompany.

ThemembersoftheGroupExecutiveBoardreceiveasalarycomprisingafixedandavariablepart.Indeter-miningthefixedsalary,theindividualresponsibilityandexperience of the person concerned is taken into con-sideration.Thevariablepart(bonus)isbetween15and45% of the gross compensation and is based on theachievementoftheindividualmanagementtargetswhichare reviewed and agreed annually and which containquantitativeaswellasqualitativeelements.Thebonusreflects the overall situation and the extent to whichobjectiveshavebeenachieved;itisdeterminedbyfairconsiderationat theendof the financialyearandpaidoutinasinglecashsum.

A proposal regarding the compensation packagesforthemembersoftheGroupExecutiveBoardissubmit-tedbytheGroupChiefExecutiveOfficertotheChairmanoftheBoardofDirectorsforapproval.TheChairmanoftheBoardofDirectorsdeterminesthecompensationtobepaidtotheGroupChiefExecutiveOfficerandinformstheBoardofDirectorsonceayearaboutallcompensationpackages.Noformalizedcalculationmodelsareusedtodetermine compensationpackages, as appropriate ap-praisalofperformanceisconsideredtobeamanagementresponsibility.

TherearenoshareoroptionparticipationprogramsfororloanstomembersoftheBoardofDirectorsortheGroupExecutiveBoard.

6 Shareholdersparticipationrights

RestrictionofvotingrightsandrepresentationEvery bearer share and every registered share has onevoteattheGeneralMeetingofShareholders.Theregis-teredsharesofConzzetaAGarenotsubject to restric-tionsofvotingrights.

Statutoryquora(Article10oftheArticlesofIncorporation)A resolution of the General Meeting of Shareholderswhichcarriesatleasttwo-thirdsoftherepresentedvotesandanabsolutemajorityoftheparvalueoftherepre-sentedvotesisrequiredfor:1changestotheArticlesofIncorporation2changestothesharecapital3thelimitationorannulmentofsubscriptionrights4theliquidationoftheCompany

SubjecttoArticle704CO,theGeneralMeetingofShare-holderspassesallotherresolutionsanddecidesitselec-tionsbyanabsolutemajorityofthevotescast,excludingblankandinvalidballots.

ConvocationoftheGeneralMeetingofShareholders(Article7oftheArticlesofIncorporation)TheArticlesofIncorporationhavenorulewhichdiffersfromapplicablelegalstandards.TheinvitationtoAnnualand Extraordinary General Meetings is issued by theBoardofDirectors,orbytheauditorsasthecasemaybe,nolaterthan20daysbeforethedateofthemeeting.Theinvitation,whichsetsoutanagendaofmattersfordis-cussion, theproposalsof theBoardofDirectorsandwhereapplicableofshareholderswhohavedemandedtheconvocationoftheGeneralMeetingorthetablingofanitemontheagenda,ispublishedintheSwissOfficialGazetteofCommerce.

Agenda(Article7oftheArticlesofIncorporation)ShareholderswhorepresentshareswithaparvalueofatleastCHF1millioncandemandtheinclusionofanitemon the agenda.The requestmust be submitted to theCompanyatleast40daysbeforetheGeneralMeetingofShareholders.

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Registrationsintheshareregister(Article4oftheArticlesofIncorporation)From the date of invitation to a General Meeting ofShareholdersup to thedayafter theGeneralMeetingitself,noregistrationswillbeacceptedinthesharereg-ister.

7 Changeofcontrolanddefensivemeasures

Dutytomakeanoffer(Article5oftheArticlesofIncorporation)Optingout:personsorcompaniesacquiringsharesintheCompany are not under obligation tomake anoffer inaccordancewiththeFederalActonStockExchangesandSecuritiesTrading.

8 Auditors

DurationofthemandateandtermofofficeoftheauditorinchargeThestatutoryauditorsofConzzetaAGandgroupauditorssince1939areKPMGAGinZurich,oritslegalpredeces-sor.Theauditor incharge,HanspeterStocker,hasheldthispositionsincethe2010businessyear.

AuditingfeesandadditionalfeesIn the reporting year, the auditors responsible for theGroups annual financial statements and some of theGroupcompaniesannualfinancialstatementssubmittedaccountsforthefollowingfees:Auditingfees:CHF384108Additionalfees:CHF159228

InformationalinstrumentspertainingtotheauditorsTheChairmanrepresentstheBoardofDirectorsvis--vistheauditors.Afterhearing theauditors and theGroupChiefFinancialOfficer,theChairmandeterminesthemainpointstheCompanywishestobecoveredbytheaudit.He discusses the audit resultswith the auditors, alongwith theGroupChiefExecutiveOfficerandtheGroupChief Financial Officer, and assesses the results. TheGroupChiefFinancialOfficeradoptstherecommendedimprovements.TheBoardofDirectorstakesnoteoftheauditorsreportswhicharecommenteduponbytheheadauditoratanordinarymeetingoftheBoardofDirectors.TheChairmanandtheGroupChiefFinancialOfficerbrieftheBoardofDirectors about their assessment and themeasuresadopted.They informtheBoardofDirectorsabouttheauditingcostsandgivetheiropinionofthequalityoftheauditservicesprovided.Unlessthereisacompellingreasontodoso,theBoardofDirectorsmakesnofurtherassessment.

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9 Informationpolicy

TheCompanypublishesanannualreportasofDecember31andaninterimreportasofJune30.Interestedpartiesare informed about the financial statements and otherimportant events in writing. A conference is held formedia representatives and financial analysts in con-junctionwiththepublicationoftheannualreportasofDecember31.Theconsolidated financial statements inaccordancewithSwissGAAPFERgiveatrueandfairviewoftheactualcircumstances.

ThisandotherinformationabouttheCompany,calendardatesandcontactscanbefoundathttp://www.conzzeta.ch

10 Significanteventssincethebalancesheetdate

SergeEntleitner,HeadoftheGraphicCoatingsbusinessunit, hasgivennotice andwill leave theGroup in July2011.

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