Landis+Gyr : Corporate Governance Report (PDF)

MANAGE 125 Years

ENERGY

BETTER

Corporate Governance

Report 2020

Contents

Purpose of this Report	3
Group Structure and Shareholders	3
Capital Structure	5
Board of Directors	8
Group Executive Management	17
Compensation, Shareholdings and Loans	19
Shareholders' Participant Rights	19
Change of Control and Defense Measures	20
Auditor	20
Information Policy	21

Performance Report

Corporate Governance Report

Remuneration Report

Financial Report

Landis+Gyr - Annual Report 2020

3

Corporate Governance Report 2020

Purpose of this Report

This Corporate Governance Report contains the information required by the Directive on Information relating to Corporate Governance issued by the SIX Swiss Exchange, in force on March 31, 2021 (the "DCG"), and is structured in accordance with the DCG. In addition, we follow the recommendations of the Swiss Code of Best Practice for Corporate Governance.1 We continue to develop our corporate governance by reference to leading international standards. Good corporate governance is an essential and core element of the vision and values of the Landis+Gyr Group.

1 Group Structure and Shareholders

1.1 Group Structure

1.1.1 Our Group's Operational Structure

Landis+Gyr is a global provider of integrated energy management solutions for the utility sector. Our solutions help utilities solve their challenges in Smart Metering, Grid Edge Intelligence and Smart Infrastructure by improving their operations, protect their assets, lower their operating costs and provide better customer service with a focus on quality, reliability and innovation. Landis+Gyr employs more than 5,000 people in over 30 countries across five continents.

Landis+Gyr is organized as a group of companies. The ultimate parent company of the group is Landis+Gyr Group AG, a holding company governed by the laws of Switzerland.2 Landis+Gyr Group AG (the "Company") is headquartered in Cham in the Canton of Zug, Switzerland, with its registered address at Alte Steinhauserstrasse 18, 6330 Cham. As of March 31, 2021, the Company's share capital amounted to CHF 289,089,440.00, divided into 28,908,944 registered shares at a par value of CHF 10 each.

The general meeting of shareholders of the Company (the "General Meeting") is the supreme corporate body and the Company's board of directors (the "Board of Directors" or the "Board", each member a "Director") is accountable and reports to the shareholders by whom it is elected. The Board of Directors, while entrusted with

• As in force on March 31, 2021.

• As used in this report, references to the "Company" or to "L+G" are to Landis+Gyr Group AG, and references
  to "we", "us", "our" or the "Group" are to Landis+Gyr Group AG and its consolidated subsidiaries, unless context requires otherwise.

the ultimate direction of the Company as well as the supervision and control of management in accordance with art. 716b of the Swiss Code of Obligations (the "CO") and art. 16 of the Company's articles of association (the "Articles"),3 has, via the Company's organizational regulations (the "Organization Regulations"),4 delegated certain aspects of the day to-day management of the Group to the Chief Executive Officer (the "CEO"), who is in turn supported by the group executive management (the "Group Executive Management") and the extended executive management.5

The Group is organized in three regional reporting segments: the Americas, Europe, Middle East and Africa ("EMEA"), and Asia Pacific.

Americas

Our operations in the Americas are headquartered in Alpharetta, Georgia, USA and serve customers in North America, South America, Japan and certain other countries that have adopted the United States' ANSI metering standard. Our Americas segment primarily focuses on smart metering communications networks and solutions, connected intelligent devices, software and services.

EMEA

Our operations in EMEA are headquartered in Cham, Canton of Zug, Switzerland. The EMEA segment comprises our operations in Europe, the Middle East and Africa. In this region, the product offerings primarily focus on connected intelligent as well as standalone metering devices, software and services.

Asia Pacific

Our operations in the Asia Pacific region are headquartered in Sydney, Australia and serve customers in Australia, New Zealand, China, India, Southeast Asia and elsewhere in Asia (but excluding Japan and certain other counties that have adopted the United States' ANSI metering standard). This segment primarily focuses on connected intelligent and standalone metering devices, software and services.

1.1.2 Listing and Capitalization

The only listed company of the Group is the Company itself.6 The shares of the Company are listed on SIX Swiss Exchange (ISIN: CH0371153492, ticker symbol: LAND, valor number: 37,115,349). On March 31, 2021, the market capitalization (excluding treasury shares) of the Company's shares amounted to CHF 1,833,407,821. There are no other listed companies belonging to the Group.

With the exception of the Company's treasury shares (see below, Section 1.2), which are held by Landis+Gyr AG, the Company's only subsidiary (see below, Section 1.1.3), no shares of the Company are owned by any of the Group companies.

3 The Company's Articles are available on www.landisgyr.com/about/executive-management-and-board/.

• The Company's Organization Regulations are available on www.landisgyr.com/about/executive-management-and-board/.
  5 See Section 3.6.1 below for further descriptions regarding the duties of the Board.
  6 See Section 1.1.1 above for information regarding the Company's full company name, seat and registered address.

Performance Report

Corporate Governance Report

Remuneration Report

Financial Report

Landis+Gyr - Annual Report 2020

4

1.1.3 Non-listed Companies Belonging to the Landis+Gyr Group

The Company's only shareholding is in Landis+Gyr AG, which in turn directly or indirectly owns the other companies in the Group. The table below sets forth, as of March 31, 2021, the name, place of incorporation, ownership interest and share capital of all direct and indirect subsidiaries which belong to the Company's consolidation scope.

Non-listed Direct and Indirect Subsidiaries of Landis+Gyr Group AG

							Share capital
Company name	Registered office		Country		Interest %		in thousands	Currency
Landis & Gyr Pty​Ltd.	Mascot, NSW	Australia	100	50,587	AUD
Landis & Gyr Holdings P/L	Mascot, NSW	Australia	100	45,587	AUD
Bayard Metering P/L	Mascot, NSW	Australia	100	45,587	AUD
Landis+Gyr GmbH	Vienna	Austria	100	300	EUR
Landis+Gyr NV	Huizingen	Belgium	100	116.6	EUR
Landis+Gyr E.d.M. Ltd.	Curitiba	Brazil	100	31,543	BRL
Landis+Gyr Canada, Inc.	Quebec	Canada	100		n/a	CAD
Landis+Gyr Meters &
Systems Co. Ltd.	Zhuhai	China	100	65,000	HKD
Landis & Gyr Ltd.	Hong Kong	China	100	32,000	HKD
Landis+Gyr s.r.o.	Prague	Czech Republic	100	5,000	CZK
Landis+Gyr OY	Jyväskylä	Finland	100	16,819	EUR
Landis+Gyr SAS	Montluçon	France	100	2,460	EUR
Landis+Gyr GmbH	Nuremberg	Germany	100	1,023	EUR
Rhebo GmbH	Leipzig	Germany	100	279	EUR
Landis+Gyr A.E.	Corinth	Greece	100	7,950	EUR
Landis+Gyr Ltd.	Kolkata	India	100	457,400	INR
Landis+Gy S.p.A	Rome	Italy	100	1,500	EUR
Landis&Gyr Japan KK	Kawasaki	Japan	100	20,000	YEN
Landis+Gyr SA de CV	Reynosa	Mexico	100	10	MXN
Landis+Gyr Mexico S.A. de C.V.	Reynosa	Mexico	100	10	MXN
Landis+Gyr B.V.	Gouda	Netherlands	100	90	EUR
Landis & Gyr Ltd.	Auckland	New Zealand	100	300	NZD
Landis+Gyr AS	Billingstad	Norway	100	1,000	NOK
Landis+Gyr Sp. z o.o.	Warsaw	Poland	100	5,000	PLZ
Landis+Gyr Pte. Ltd.	Singapore	Singapore	100	3,503	USD
Landis+Gyr d.o.o.	Sencur	Slovenia	100	200	EUR
Landis and Gyr (Pty) Ltd	Kosmosdal	South Africa	70	2,000	ZAR
Landis & Gyr S.A.U.	Seville	Spain	100	3,000	EUR
Landis+Gyr AB	Vallentuna	Sweden	100	1,000	SEK
Landis+Gyr AG	Cham	Switzerland	100	29,700	CHF

							Share capital
Company name	Registered office	Country		Interest %		in thousands	Currency
Caligyr AG	Cham	Switzerland	100	100	CHF
Ampy Holdings Ltd, UK	Peterborough	United Kingdom	100	42,306	USD
Bayard Metering (UK) Ltd	Peterborough	United Kingdom	100	6,986	GBP
Generis Technology Ltd.	Manchester	United Kingdom	100	0.747	GBP
Landis+Gyr Ltd.	Peterborough	United Kingdom	100	2,800	GBP
Landis+Gyr (Stockport) Ltd.	Peterborough	United Kingdom	100		n/a	GBP
Landis+Gyr Innovations, Inc.	Delaware	USA	100	0.01	USD
Landis+Gyr Investments, LLC	Delaware	USA	100	0.1	USD
Landis+Gyr Technologies
Canada, Inc.	Delaware	USA	100	0.03	USD
Landis+Gyr Technology, Inc.	Delaware	USA	100	0.01	USD
Landis+Gyr Midwest, Inc.	Delaware	USA	100	0.01	USD

1.2 Significant Shareholders

The number of registered shareholders registered in the Company's share ledger as of March 31, 2021 amounted to 7,612, holding a total of 20.4 million shares, which equals approximately 70.7% of the Company's total shares. A total of 8.5 million shares, equaling approximately 29.3% of the Company's total shares, were held by unregistered share- holders. As of March 31, 2021, the Company held 81,777 treasury shares (which are registered), which represents 0.28% of the Company's share capital. The sources of the Company's treasury shares are explained in more detail in Section 2.3.2 below.

To the best of Landis+Gyr's knowledge, the following shareholders had holdings reaching or exceeding 3 % or more of the voting rights in the Company as of March 31, 2021, as notified in accordance with art. 120 of the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (the "FMIA"):7

Shareholder (Beneficial owner / legal shareholder)		Number of shares		% of voting rights
Kjeld Kirk Kristiansen, Thomas Kirk Kristiansen,
Sofie Kirk Kristiansen, Agnete Kirk Thinggaard / KIRKBI Invest A/S		4,445,265		15.38%
Rudolf Maag	3,000,000	10.38%
Franklin Resources, Inc. / Franklin Templeton Investments Corp.,
Franklin Templeton Investment Management Limited,
Templeton Investment Counsel, LLC		931,580		3.22%
BlackRock, Inc., New York, NY, U.S.A. (Mother Company)		920,642		3.18%
PGGM Vermögensbeheer B.V.		890,700		3.08%

7 The number of shares shown in this Corporate Governance Report and the holding percentages are based on the last disclosure of shareholding communicated by the respective shareholder to the Company and the Disclosure

Office of SIX Swiss Exchange. The number of shares held by the relevant shareholder may have changed since the date of such shareholder's notification. Any reportable changes since the date hereof can also be found on the website of the SIX Exchange Regulation (SER), which also includes the individual reports of the significant share- holders: www.ser-ag.com/en/resources/notifications-market-participants/significant-shareholders.html/.

Performance Report

Corporate Governance Report

Remuneration Report

Financial Report

Landis+Gyr - Annual Report 2020

5

Notifications made in accordance with art. 120 FMIA during the 12 months preceding March 31, 2021, can be viewed at: www.ser-ag.com/en/resources/notifications-market-participants/significant-share- holders.html/

1.3 Cross-shareholdings

The Company does not have any cross-shareholdings exceeding 5% of the capital or voting rights with any other company.

2 Capital Structure

2.1 Capital

On March 31, 2021, the Company's ordinary share capital as registered with the Commercial Register of the Canton of Zug amounted to CHF 289,089,440, divided into 28,908,944 fully paid-in registered shares with a nominal value of CHF 10.00 per share. The shares are limited in transferability and non-assessable.

On March 31, 2021, the Articles provided for two types of conditional capital (arts.

3a and 3b of the Articles) as well as an authorized capital (art. 3c of the Articles). According to art. 3a of the Articles, the Company's share capital may be increased by up to CHF 4,500,000 through the issuance of up to 450,000 fully paid-in registered shares with a nominal value of CHF 10 each (the "Conditional Capital for Employees"). According to art. 3b of the Articles, the Company's share capital may be increased by up to CHF 28,908,940 through the issuance of up to 2,890,894 fully paid-in registered shares with a nominal value of CHF 10 each (the "Conditional Capital for Financing and Acquisitions"). According to art. 3c of the Articles, the Board may increase the Company's share capital by up to CHF 28,908,940 by issuing a maximum of 2,890,894 fully paid-in registered shares with a nominal value of CHF 10 each (the "Authorized Capital").

2.2 Conditional Capital and Authorized Capital of the Company 2.2.1 Conditional Capital

2.2.1.1 Conditional Capital for Employees

According to art. 3a of the Articles, the Company may increase its share capital by up to CHF 4,500,000 by issuing up to 450,000 fully paid-in registered shares with a nominal value of CHF 10.00 each, upon the exercise of option rights or in connection with similar rights regarding shares (including performance stock units (the "PSUs") and/ or restricted stock units (the "RSUs")) granted to officers and employees at all levels of the Group. Pre-emptive rights and advance subscription rights of shareholders do not apply, and the shares may be issued at a price below the market price. If fully utilized, the maximum amount of this conditional capital (CHF 4,500,000) would equal approximately 1.6% of the existing share capital. The time period for an increase of the Company's share capital pursuant to art. 3a of the Articles is unlimited.8

2.2.1.2 Conditional Capital for Financing and Acquisitions

According to art. 3b of the Articles, the Company may increase its share capital by up to CHF 28,908,940 by issuing up to 2,890,894 fully paid-in registered shares with a nominal value of CHF 10 each, through the exercise or mandatory exercise of conver- sion, exchange, option, warrant or similar rights for the subscription of shares granted to shareholders or third parties alone or in connection with bonds, notes, loans, options, warrants or other securities or contractual obligations of the Company or any of its group companies (the "Financial Instruments"). The pre-emptive rights of shareholders are excluded in connection with the issuance of registered shares upon the exercise of any Financial Instruments. The then current owners of such Financial Instruments are entitled to acquire the new registered shares issued upon conversion, exchange or exercise of any Financial Instruments. The Board of Directors is authorized to restrict or withdraw advance subscription rights of shareholders in connection with the issuance of Financial Instruments by the Company or one of its group companies under certain terms and conditions. Certain further terms and conditions apply in case advance subscription rights are neither granted directly nor indirectly by the Board of Directors. If fully utilized, the maximum amount of this conditional capital (CHF 28,908,940) would equal approximately 10.0% of the existing share capital. The time period for an increase of the Company's share capital pursuant to art. 3a of the Articles is unlimited, provided that certain terms and conditions as described in art. 3b of the Articles may impose time limitations on the conversion, exchange or exercise of the Financial Instruments.9

• For a more comprehensive description of the terms and conditions of the issuance of such conditional capital, refer to art. 3a of the Articles.

• For a more comprehensive description of the terms and conditions of the issuance of such conditional capital, refer to art. 3b of the Articles.