Source: http://report.georgfischer.com/content/gfar/2015/en/business-report/corporate-governance/change-of-control-and-defense-measures.html
Timestamp: 2019-04-21 11:11:36+00:00

Document:
The Corporation has the operational divisions: GF Piping Systems, GF Auto­motive, and GF Machining Solutions, plus the Corporate Staff Units Finance & Controlling and Corporate Development. The Chief Executive Officer is also the Head of Corporate Development.
The CEO, supported by the other members of the Executive Committee, bears responsibility for the management of the Corporation, where this is not delegated to the ­divisions or the Corporate Staff Units. The Heads of the Divisions, supported by the Heads of the Business Units and Service Centers, bear responsibility for the management of the divisions. The Corporate Staff Units support the Board of Directors and the Executive Committee in their management and supervisory functions.
The parent company of all the Corporate Companies is Georg Fischer Ltd. It is incorporated under Swiss law and is domiciled in Schaffhausen, Switzerland. Georg Fischer Ltd is listed on the SIX Swiss Exchange (FI-N, security number 175 230). Its share capital is CHF 4 100 898, and its market capitalization was CHF 2 785 million as of 31 December 2015 (previous year: CHF 2 579 million).
An overview of all Affiliated Companies in the scope of consolidation can be found in the ­Financial Report. The list contains the company name, domicile, share capital, and percentage held by GF.
As of 31 December 2015, no shareholder or shareholder group had voting rights in excess of 5%. LSV Asset Management, Chicago (USA), and the UBS Fund Management (Switzerland) AG, Basel (Switzerland), had voting rights between 3% and 5%.
Nine disclosure notifications were filed in the year under review: eight in relation to the BlackRock Group (see group structure as published on the SIX disclosure platform), held indirectly by BlackRock, Inc. (USA), and one in relation to Norges Bank (the Central Bank of Norway), Oslo (Norway). Disclosure notifications pertaining to share­holdings in Georg Fischer Ltd that were filed with Georg Fischer Ltd and the SIX Swiss Exchange are published on the latter’s electronic publication platform.
There are no cross-shareholdings or shareholder pooling agreements with other companies.
Fully paid-in share capital amounts to CHF 4 100 898 and is divided into 4 100 898 registered shares each with a par value of CHF 1. Each registered share has one vote at the ­Annual Shareholders’ Meeting. The authorized capital and the conditional capital amount to a maximum of 600 000 shares. The maximum authorized or conditional capital is reduced by the amount that conditional or authorized capital is created by the issue of bonds or similar debt instruments or new shares.
a nominal value of CHF 1 each, through the exercise of conversion rights and/or warrants granted in connection with the issuance on capital markets of bonds or similar debt instruments of the company or one of its Corporate Companies. As of 31 December 2015, no such bonds or similar debt instruments were outstanding. The beneficiaries and the conditions and modalities of the issue of authorized capital are described in §4.4 a) of the Articles of Association of Georg Fischer Ltd and those of conditional capital in §4.4 b) of the Articles of Association of Georg Fischer Ltd.
The subscription to and acquisition of the new shares, and any subsequent transfer of the shares, are subject to the statutory restrictions on transferability (see the next section “Restri­c­tions on transferability”). Further information on the share capital and changes in capital in the last five years can be found here. No participation or profit-sharing certificates exist.
Entry in the company’s share register as a shareholder or beneficiary with voting rights is subject to the approval of the Board of Directors. Approval of registration is subject to the following conditions: a natural person or legal entity may not ­accumulate, either directly or indirectly, more than 5% of the registered share capital. Persons who are bound by capital or voting rights, by consolidated management or in a similar manner, or who have come to an agreement for the purpose of circumventing this rule, shall be deemed as one person.
Persons who hold shares for third parties (referred to as nominees) are only entered in the share register with voting rights if the nominee declares their willingness to disclose the names, addresses, and shareholdings of those persons on whose behalf they hold the shares. The same registration limitations apply, mutatis mutandis, to nominees as to individual shareholders.
Cancellation or easing of the restrictions on the transferability of registered shares requires a resolution of the Annual Shareholders’ Meeting passed by at least two-thirds of the shares represented and an absolute majority of the par value of the shares represented.
There are no outstanding convertible bonds, and GF has issued no options.
Unless otherwise provided for by law or the Articles of Association, the Board of Directors delegates operational management to the Chief Executive Officer, who is assisted in this task by the Executive Committee. The extent to which competencies are delegated by the Board of Directors to the Executive Committee and the nature of the cooperation between the Board and the ­Executive Committee are defined by the Organization and Business Rules.
All members of the Board of Directors are non-executive. There are no significant business relationships between the members of the Board or the companies or organizations they represent and Georg Fischer Ltd or a Corporate Company.
As per §16.2 of the Articles of Association of Georg Fischer Ltd, the members of the Board of Directors have to be elected individually, and their term of office ends at the next Annual Shareholders’ Meeting. Re-election is possible.
When selecting Board members, particular emphasis is placed on entrepreneurial experience, relevant expertise, or particular international ties. The Board of Directors also aims to achieve a proper balance of competence and knowledge, taking into account the main operational focus of the Corporation, its international orientation, and the accounting requirements of listed companies. Members of the Board must resign their mandate at the Annual Shareholders’ Meeting following their 70th birthday.
At the 119th Annual Shareholders’ Meeting on 18 March 2015, Dr. iur. Eveline Saupper was elected as new member of the Board of Directors. Rudolf Huber and Isabelle Welton did not stand for re-election.
Pursuant to §16.3 of the Articles of Association of Georg Fischer Ltd, the Annual Shareholders’ Meeting elects a member of the Board of ­Directors as its Chairman for the period of one year until the next ordinary Annual Shareholders’ Meeting. Re-election is possible.
With the exception of the election of a Chairman of the Board of Directors, who is elected by the Annual Shareholders’ Meeting, the Board of Directors constitutes itself by electing a Vice Chairman from within its ranks once a year. Alongside the election of Andreas Koopmann as Chairman of the Board of Directors, Gerold Bührer was elected by the Board of ­Directors as its Vice Chairman on the day of the Annual Shareholders’ Meeting on 18 March 2015.
In addition, pursuant to §20.1 of the Articles of Association of Georg Fischer Ltd, the Annual Shareholders’ Meeting elects the members of the Compensation Committee.
The members of the three standing Board Committees are listed on page 40. The Board Committees provide preliminary advice to the Board of Directors and do not make any definitive decisions. They discuss the issues assigned to them and make proposals to the Board of Directors as a whole. The CEO attends the meetings of the Board Committees, but is not entitled to vote. Minutes of the committee meetings are sent to all members of the Board of Directors. The Chairmen of the individual committees also make a verbal report at the next meeting of the Board of Directors and submit any proposals.
Decisions are made by the Board of Directors as a body. Members of the Executive Committee also participate in Board meetings for agenda items relating to the company’s business, but are not entitled to vote. Only the Chief Executive Officer is present when personnel topics are dealt with. Personnel topics affecting him directly are treated in his absence. Invitations to Board meetings list all the items that the Board of Directors, a Board Committee, or the CEO wish to discuss. All participants in a Board meeting receive detailed written material on the proposals in advance.
The Board of Directors meets at least four times a year under the leadership of its Chairman. During the year under review, it met six times: one meeting lasted less than two hours, four meetings lasted less than a day, and the strategy meeting lasted one and a half days in total but was integrated in a week-long market trip that included visits to customers, partners and Corporate Companies of GF in Germany. The dates of the regular meetings are generally set well in advance to enable all members to attend personally. In the year under review, the attendance rate was 96%. The three standing Board Committees met a total of 16 times.
External consultants are called on for their services when specific topics are involved. Further information is provided in the section on the Board Committees.
In 2015 the Board of Directors worked on the implementation of the findings out of the self-assessment which took place in 2014. Further optimization were incorporated into the annual planning for 2016. Another assessment is planned for autumn 2016.
The Audit Committee consists of three Board members. It supports the Board of Directors in monitoring accounting and financial reporting, supervises the internal and external audit function, assesses the efficiency of the internal control system including risk management and compliance with legal and statutory provisions, acknowledges the sensitivity analy­sis of the pension funds of Georg Fischer Ltd, and issues its opinions on transactions concerning equity and liabilities at Georg Fischer Ltd. The Audit Committee also decides whether or not the ­consolidated financial statements and those of Georg Fischer Ltd can be recommended to the Board of Directors for ­presentation to the Annual Shareholders’ Meeting.
As a rule, the Chairman of the Board, the CEO, the CFO, the Head of Internal Auditing, and representatives of the external auditor also take part in the meetings. At the request of the Audit Committee the external auditor also provides information on current questions related to the financial reporting requirements and financial issues.
During the business year just ended, the Audit Committee held five regular and one extraordinary meeting, four of which lasted half a day, and the other two lasted about two hours.
The Compensation Committee consists of three Board members, which are elected on a yearly basis by the Annual Shareholders’ Meeting. It supports the Board of ­Directors in setting compensation policy at the highest corporate level. It uses knowledge of external compensation specialists about market data from comparable companies in Switzerland, in addition to publicly available data obtained on the basis of compensation disclosures. Comparable industrial corporations headquartered in Switzerland and the industrial market of Switzerland were used as a basis. In the reporting year, the remuneration was evaluated based on the comprehensive external reports obtained in 2014. In 2015 the Compensation Committee reviewed in depth the short-term incentive plan of the Corporation in order to align the plan with the Strategy 2020 and contemporary market practice as well as the long-term incentive plan to bring in line with requirements of proxy advisors. The Compensation Committee proposes to the Board of Directors the total amount of compensation to be paid to the entire Executive Committee and the Chief Executive Officer. The Compensation Committee held four meetings during the past fiscal year, each of which lasted about an hour and a half.
The Nomination Committee consists of three Board members. It supports the Board of Directors in succession planning and assists in the selection of suitable candidates for the Board of Directors and the Executive Committee. The Nomination Committee is kept informed annually about succession planning for the top senior management levels, about the talent pipeline at the senior management and the diversity situation. In the year ­under review, the Nomination Committee held six meetings, which lasted an hour on average.
The Board of Directors is informed in depth about business performance every month. The members of the Board receive the monthly report, which contains current information concerning business performance and the financial statements of the Corporation, the divisions, and Corporate Companies together with a detailed commentary. The Executive Committee presents and comments on business performance and tables all important matters at the Board meetings. It also presents its assessment of business performance for the coming months.
In addition, the Board of Directors receives regularly the forecast containing the expected figures at year-end. Once a year, the Board of Directors receives and approves the budget of the Corporation and the divisions for the following year. The Board of Directors holds as a general rule a two-day meeting once a year to discuss the strategies of the divisions and the Corporation as a whole.
The Chairman of the Board of Directors attends the Corporate Convention of the senior management and the Executive Committee’s planning meeting and is a regular attendee at other corporate management meetings. The Chairman of the Board of Directors and the CEO inform and consult each other regularly on all business matters that are of fundamental importance or have far-reaching ramifications. The Chairman of the Board receives the invitations and minutes of the Executive Committee and Corporate Staff Meetings. He visits Corporate Companies on a regular basis to see their operations in person and how they are implementing the Corporation’s strategy. In 2015, he visited Corporate Companies in Europe and in the US.
Internal Auditing reports to the Chairman of the Audit Committee operationally and to the CFO administratively. Based on the audit plan ­approved by the Audit Committee, Corporate Companies are audited either annually or every two to three years, depending on the risk assessment and based on a comprehensive audit program. In the year under review, 27 internal audits were conducted. The audit reports are reconciled with the management of the audited Corporate Companies and distributed to the line mana­gers, the external auditor, the Executive Committee, the Chairmen of the Board of Directors, and of the Audit Committee. Audit reports with significant findings are presented to and discussed in the Audit Committee.
Internal Auditing ensures that all discrepancies arising in internal and external audits are addressed and submits a report to the Executive Committee and the Audit Committee. The Head of Internal ­Auditing prepares an annual report, which is discussed by the Executive Committee and the Audit Committee. He also serves as the secretary of the Audit Committee.
The Service Center Law & Compliance informs the Board of Directors and the Executive Committee about legal issues and significant changes to the law. The Corporate Compliance Officer (CCO) is appointed by the Chief Executive Officer and in this function reports to the General Counsel; he reports to the CEO directly if necessary. Especially through preventive measures and training in the divisions along with information and advice to the Corporate Companies, the CCO ensures that the Corporate Companies comply with the law, internal directives, and the Corporation’s principles of business ethics in their business activities. The Executive Committee, in consultation with the CCO, defines priority issues.
Further implementation of the “Compliance Agreement for Intermediaries” as a guideline for GF business partners who act in the name or interest of Corporate Companies within the GF Corporation.
An internal e-learning program on the subject of anti-corruption was held for about 600 employees.
An internal e-learning program was conducted on competition and cartel law for about 560 employees.
Training courses on antitrust law, anti-corruption, export controls, and/or other compliance topics at various Corporate Companies and for specific employee groups with compliance functions (including GF Business Unit Controllers and Export Control Appointees of GF Machining Solutions Corporate Companies in Europe).
Ongoing advice and support for internal revisions and update of the compliance topics in the Internal Audit Program.
Continuation of specific compliance measures for intermediaries in China (e.g. ongoing checks regarding the appropriateness of compensation paid to intermediaries as well as examination of their ownership structure so as to avoid conflicts of interests).
Further implementation of a web-based system for the prevention of business with sanctioned persons and organizations.
Advice was given on issues relating to export controls, cartel law, and labor law.
Introduction of the function “Compliance Agents” (carried out by the Business Unit Controllers) for risk assessment and internal control.
The Board of Directors and the Executive Committee attach great importance to the thorough handling of risks in the areas of strategy, finance, markets, management and resources, operations, and sustainability. The Head of the Service Center Risk, Tax & IP Services acts as the Chief Risk Officer (CRO) and, in this function, directly reports to the CEO. The CRO is supported by a non-executive risk officer of each division. Supplemented by internal experts of the corporate risk management, the risk officers under the leadership of the CRO constitute the Corporate Risk Council which met twice during the year under review. In addition, the CRO conducted workshops with the management of the three ­divisions as well as with the Executive Committee to analyze the risk situation, to discuss measures to mitigate the risks, and to define the actual top risks of each unit. Based on the results of the workshops, a risk report was prepared which was presented to and analyzed by the Board of Directors.
The handling of financial and operational risks are explained in the financial part of the Annual Report.
The Board of Directors evaluates and assesses the performance of the Executive Committee and its members at least once a year in the absence of the Executive Committee members. The Chairman of the Board of Directors must approve any appointments of ­Executive Committee members to external Boards of Directors or to high-level political or other public functions.
The Chief Executive Officer is responsible for the management of the Corporation. Under his leadership, the Executive Committee addresses all issues of relevance to the Corporation, takes decisions within its remit, and submits proposals to the Board of Directors. The Heads of the three Divisions and two Corporate Staff Units are responsible for drafting and achieving their business objectives and for managing their units autonomously. No management responsibility is delegated to third parties at the Executive Committee level (management contracts).
As at the end of the year under review, the Executive Committee remained unchanged with the following members: Yves Serra, CEO and at the same time Head of Corporate Development; Pietro Lori, Head of GF Piping Systems; Josef Edbauer, Head of GF Automotive; Pascal Boillat, Head of GF Machining Solutions; Roland Abt, CFO and Head of Corporate Finance & Controlling.
As of 31 December 2015, Georg Fischer Ltd had 13 949 shareholders with voting rights (previous year: 13 390), most of whom reside in Switzerland. To maintain this broad base, the Articles of Association provide for the statutory restrictions summarized hereinafter.
The total number of votes exercised by one person for their own shares and shares for which they vote by proxy may not exceed 5% of the votes of the company’s total share capital. Persons bound by capital or voting rights, by consolidated management, or otherwise acting in concert for the purpose of circumventing this provision are deemed to be one person.
The restriction of voting rights under §4.10 of the ­Articles of Association may be revoked only by a resolution of the Annual Shareholders’ Meeting, passed by a two-thirds majority of the shares represented and an absolute majority of the par value of the shares represented.
A shareholder may, on the basis of a written power of attorney, be represented at the Annual Shareholders’ Meeting by another shareholder entitled to vote or the independent proxy. Shareholders can also confer powers of attorney and issue instructions to independent proxies electronically. Partnerships may be represented by a partner or authorized signatory, legal entities by a person authorized by law or the Articles of Association, married persons by their spouse, wards by their legal guardians, and minors by their legal representative, regardless of whether such representatives are shareholders or not.
No regulations exist which deviate from those stipulated by law.
Shareholders representing a minimum of 0.3% of the share capital may request that an item be added to the agenda. The application must be submitted in writing no later than 60 days before the meeting and must specify the item to be discussed and the shareholder’s proposal.
The deadline for entering shareholders in the share register with regard to attendance at the Annual Shareholders’ Meeting is around ten days before the date of the Annual Shareholders’ Meeting. It is mentioned in the invitation to the Annual Shareholders’ Meeting.
The Articles of Association of Georg Fischer Ltd do not contain any regulations governing “opting-out” or “opting-up”. As of 1 January 2014, the contractually agreed period of notice for the members of the Executive Committee is basically twelve months. Furthermore, a change of control will result in the cancellation of all existing disposal limitations for shares allocated according to the share plan. In the event of a change of control, bondholders and banks have the right to demand the immediate repayment of bond issues and loans before they are due.
In 2012, PricewaterhouseCoopers, Zurich (Switzerland), was elected as external auditor. Since the Annual Shareholders’ Meeting 2012, Stefan Räbsamen is the auditor in charge. The latter is changed every seven years. The statutory auditor is elected at the Annual Shareholders’ Meeting for a term of one year.
In 2015, the Corporation spent about CHF 2.48 million (previous year: CHF 2.43 million) worldwide in connection with the annual audits conducted by PricewaterhouseCoopers at Georg Fischer Ltd, the GF Corporation, and the Corporate Companies. For additional services, PricewaterhouseCoopers received in 2015 fees of approximately CHF 0.42 million (previous year: CHF 0.48 million). Thereof CHF 0.17 million (previous year: CHF 0.2 million) for services related to tax advice and CHF 0.25 million (previous year: CHF 0.28 million) for other consulting mandates in connection with accounting.
In cooperation with internal and external audit, the Audit Committee evaluates the potential for improvements regarding the collaboration, the processing of the assignments and the interfaces or overlapping of internal and external audit work. The auditor in charge of the external auditor attended the five ordinary meetings of the Audit Committee.
For the evaluation, the members of the Audit Committee use first of all the knowledge and experience which they have acquired as a result of similar functions at other companies. Internal Auditing also issues an annual list of all services rendered by external auditors for the Corporation and their costs. The costs for the annual audits of Georg Fischer Ltd, the Corporation, and of all Corporate Companies were approved by the Audit Committee. Further services from PricewaterhouseCoopers are examined by the Head of Internal Auditing and, depending on the amount, approved either by the CFO or by the Managing Directors of the respective Corporate Companies.
Corporate Communications and Investor Relations are the two Service Centers responsible for information and communication in the Corporation. The communication strategy is based on GF’s business strategy and supports the positioning of both the Corporation and the divisions. Communication with all GF stakeholders is active, open, and timely. If possible and permissible, ­employees are notified first.
The introduction of the new corporate-wide intranet in mid-November marks an end for now to the revamping of the GF means of communication. Over the past three years, we have given a modern new look to the website, corporate design, and publications, such as the Annual Report and Sustainability Report, as well as the employee magazine “Globe”. The aim of this redesign was and is to boost the GF brand both within the Corporation and externally, and to position GF as a modern and client-oriented company that stands out from the competition, as well as making GF attractive for job-seekers (such as university graduates). In addition, communication via various social media channels has been expanded (LinkedIn, Xing, YouTube, Facebook, and Twitter). The fact that for the second year in a row the Swiss Association for Internal Communication (Schweizerischer Verband für interne Kommunikation, SVIK) has selected the “Globe” as Switzerland’s best employee magazine is a good indication that the path we have chosen is the right one. We will continue on this path. The ongoing trend towards digitalization, however, requires that Corporate Communications invests more in innovation and adaptation, without neglecting traditional ways of communication.
The shares of Georg Fischer Ltd are listed on the SIX Swiss Exchange. Therefore, GF is subject to the requirements on ad hoc publicity, i.e., the obligation to report any potential share-price-relevant information. GF also maintains a dialog with investors and journalists at respective events and roadshows.
Subscription to the e-mail service is free of charge. All media releases, Annual Reports, and Mid-Year Reports go online at the website www.georg­fischer.com at the same time as they are published. Shareholders receive the short version of the Annual Report and the Mid-Year Report automatically, and other interested parties receive them on request.
On 27 January 2016, Georg Fischer Ltd acquired the remaining 10% of the capital of Georg Fischer Hakan Plastik AS, Cerkezköy (Turkey), for CHF 11 million. In addition, on 27 January 2016, the outstanding earn-out in the amount of CHF 31 million was paid by Georg Fischer Ltd to the former owners of Georg Fischer Hakan Plastik AS, Cerkezköy.
As communicated in the Media Release of 4 February 2016, CFO Roland Abt has decided to step down from his position at the end of 2016. Roland Abt has been proposed for nomination as member of the Board of Swisscom Ltd. The nomination of Roland Abt at Swisscom Ltd will bring his total external mandates in Swiss listed companies to two, exceeding the amount allowed by the GF Articles of Association.
No disclosure notification was made between 1 January and the editorial deadline on 19 February 2016. Disclosure notifications pertaining to shareholdings in Georg Fischer Ltd that were filed with Georg Fischer Ltd and the SIX Swiss Exchange are published on the latter’s electronic publication platform and can be accessed via the following link.
Copyright © 2016 Georg Fischer Ltd. All rights reserved.

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