Leclanche : Annual Report 2020

Leclanché Group

2020 Annual Report

Leclanché SA Avenue des Sports 42 • Case postale • CH-1400Yverdon-les-Bains• Suisse [phone] • www.leclanche.com

Table of Content

Corporate governance	2	- 26
Compensation Report	27	- 32
Report of the statutory auditor on the Compensation Report		33
Consolidated financial statements 2020	34- 85
Report of the statutory auditor on the consolidated financial statements	86	- 91
Statutory financial statements 2020	92 - 104
Report of the statutory auditor	105- 109
Contacts & Disclaimer	110

CORPORATE GOVERNANCE

The following section has been prepared in accordance with the Swiss Code of Obligations and the Directive on Information Relating to Corporate Governance issued by the SIX Swiss Exchange. Additional disclosures required by the Directive on Information Relating to Corporate Governance for issuers subject to the Ordinance against Excessive Compensation at Listed Companies (OaEC) can be found in the separate section, Compensation Report, or in Leclanché SA's Articles of Association (https://www.leclanche.com/investor-relations/articles-of-association/).

Except when otherwise provided by law, the Articles of Association or Leclanché's Organisational Regulations, all areas of Management are fully delegated by the Board of Directors to the Executive Committee.

1. Group Structure and Shareholders

Group structure

Leclanché SA (the "Company") was incorporated in Yverdon-les-Bains (Switzerland) as a Swiss limited company on 3 August 1909 with the Register of Commerce of the Canton of Vaud. The Company has its corporate legal headquarters at Avenue des Sports 42, CH-1400Yverdon-les-Bains. The Company is listed under the Main Standard on the SIX Swiss Exchange under Swiss security number 11030311 (ISIN: CH0110303119). The Company is listed under the symbol "LECN". As of 31 December 2020, the market capitalisation of the Company was kCHF 291'278 (31 December 2019: kCHF 214'575).

Leclanché S.A.'s subsidiaries and associates are:

	Registered	Country	Currency	Share capital	Ownership
	offices			(LOC)	interest
Leclanché GmbH	Willstätt	Germany	EUR	270'600.00	100%
Leclanché Service GmbH (1)	Willstätt	Germany	EUR	25'000.00	100%
Leclanché UK Ltd	London	England	GBP	100.00	100%
Leclanché North America Inc.	Wilmington,	USA	USD	0.01	100%
	Delaware
Leclanché Canada Inc.	Victoria, British	Canada	CAD	0.00	100%
	Colombia
Leclanché France SASU (2)	Versailles	France	EUR	2'500	100%
Leclanché Norway AS (3)	Oslo	Norway	NOK	30'000	100%
Exide Leclanché Energy Private	Ahmedabad,	India	INR	1'285'940'340	19.85%
Limited (ELEPL) - Nexcharge (4)	Gujarat
Solec Power Ltd	Basseterre	Saint Kitts	USD	100.00	50%
		and Nevis

1. Leclanché Service GmbH was incorporated on 28 May 2019 and is fully owned by Leclanché GmbH
2. Leclanché France SASU was incorporated on 26 June 2020 and is fully owned by Leclanché SA
3. Leclanché Norway AS was incorporated on 15 June 2020 and is fully owned by Leclanché SA
4. Exide Leclanché Energy Private Limited (ELEPL) - Nexcharge was incorporated on 29 September 2018. The ownership interest of Leclanché SA was 19.85% as of 31 December 2020.
5. Solec Power Ltd was incorporated on 29 March 2019. The interest ownership of Leclanché is 50% at the end of 2020.

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Leclanché S.A. and its subsidiaries (the "Group") are dedicated to the design, development and manufacturing of customised and turnkey energy storage solutions for electricity generation and transmission, mass transportation, heavy industrial machines and specialty battery systems.

There are no other companies belonging to the Group.

The operational structure of the Group corresponds to the segment reporting presented on Note 3 of the consolidated financial statements.

Significant shareholders

Pursuant to the information provided to the Company by its shareholders in accordance with Article 120 & seq. of the FMIA (Financial Market Infrastructure Act), the following shareholder held more than 3% of the voting rights of Leclanché S.A. as of 31 December 2020.

		Number of	Voting rights	Total purchase		Total purchase
Shareholder		Existing Shares		positions
	(%)(1)	positions (Rights)
		(Rights,%)	(1)
		held
SEFAM (2)	195'221'483	75.1	4'011'133	(4)	1.5

1. The percentages reflected are based on the outstanding share capital of the Company as included in the Commercial Register of the Canton of Vaud (i.e. CHF 26'006'947.90, divided into 260'069'479 fully paid-in registered shares each with a nominal value of CHF 0.10).
2. SEFAM means: AM INVESTMENT SCA, SICAV-SIF - Illiquid Assets Sub-Fund and AM INVESTMENT SCA, SICAV- SIF - R&D Sub-Fund , together with STRATEGIC EQUITY FUND - Renewable Energy Sub-Fund, STRATEGIC EQUITY FUND - Multi Asset Strategy Sub-Fund, STRATEGY EQUITY FUND - E Money Strategies Sub-Fund (also called Energy Storage Invest) and, all these funds being in aggregate the main shareholder of Leclanché, hereunder referred to as "SEFAM" (Crestbridge Management Company being the beneficial owner as per the reporting platform of SIX Regulation AG's Disclosure Office). Date of publication of most recent notification: 20 January 2021.

1. The total purchase positions relate to the conversion rights under the SEFAM Convertible Loans. For additional information, see section 2 below. "Capital Structure/Convertible loans" and to Note 17A of the consolidated financial statements.

Five (5) disclosure notifications according to Article 120 & seq. of the FMIA were published by the Company in

2020. These notifications (including further details on the above-mentioned notifications) can be accessed at: https://www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html

Cross-shareholdings

The Company has no cross-shareholdings in excess of 5% of the capital or the voting rights with any other shareholders.

2. Capital Structure

Share capital

As of 31 December 2020, the issued share capital of the Company amounts to kCHF 26'007, divided into 260'069'479 fully paid-in registered shares with a nominal value of CHF 0.10 each.

Conditional share capital

Pursuant to Article 3ter and 3quinquies of the Articles of Association, the conditional share capital of the Company represents an aggregate amount of kCHF 3'967 and is divided into the following components:

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Conditional capital reserved for equity Incentive Plans

Pursuant to Article 3ter of the Articles of Association, the Company's share capital can be increased by a maximum aggregate amount of kCHF 600 through the issuance of a maximum of 6'000'000 fully paid-in registered shares with a nominal value of CHF 0.10 each, by the issuance of new shares to employees of the Company and Group companies. The pre-emptive rights of the shareholders are excluded. The shares or rights to subscribe for shares shall be issued to employees pursuant to one or more regulations to be issued by the Board of Directors or, to the extent delegated to it, the Appointments and Remuneration Committee, taking into account performance, functions, levels of responsibility and profitability criteria. The Board of Directors determines the issue price. Shares or subscription rights may be issued to employees at a price lower than that quoted on the stock exchange. The new registered shares are subject to the restrictions set forth in Article 4 (Transferability of shares) of the Articles of Association. As of 31 December 2020, no shares were issued on the basis of Article 3ter of the Articles of Association.

Conditional capital reserved for Financing Purposes

Pursuant to Article 3quinquies of the Articles of Association, the Company's share capital can be increased by a maximum aggregate amount of kCHF 3'367, by issuing a maximum of 33'669'258 fully paid-in registered shares with a nominal value of CHF 0.10 each. The increase takes place through the exercise of conversion, option, or similar rights, which are granted in connection with newly or already issued bonds, similar obligations, loans or other financial market instruments or contractual obligations of the Company or one of its Group companies and/or by the exercise of option rights issued by the Company or one of its Group companies ("Financial Instruments"). Shareholders' pre-emptive rights are excluded with respect to the issuance of Financial Instruments. The then current holders of Financial Instruments are entitled to subscribe for the new shares. The conditions of Financial Instruments shall be determined by the Board of Directors. The Board of Directors is authorised to restrict or deny the advance subscription rights of the shareholders:

1. In connection with the Convertible Loan Agreement with Recharge ApS ("Recharge") and ACE Energy Efficiency SPC ("ACE") dated 7 December 2014, with any amendments (the "Convertible Recharge Loan/ACE"); or
2. For the purpose of financing or refinancing of investments or the expansion plan of the Company; or
3. If the Financial Instruments are issued to strategic investors or partners; or
4. If the Financial Instruments are issued on national or international capital markets or through a private placement; or
5. For the purpose of a firm underwriting of such Financial Instruments through a banking institution or a syndicate of banking institutions or a third party/third parties with subsequent offering to the public; or
6. For the purpose of financial restructuring, in particular for the conversion of debt into equity.

The conversion rights granted to Recharge/ACE under the Convertible Recharge Loan/ACE, in accordance with paragraph 1, are necessary for the restructuring and future expansion of the Company. The conversion will be carried out in accordance with the terms of the Convertible Recharge/ACE Loan. The conversion could be exercised until 30 June 2016, which can be extended (in accordance with the terms of the respective contracts). If advance subscription rights are excluded on the basis of this Article 3quinquies (Conditional Share Capital for Financing Purposes), the following shall apply: The Financial Instruments will be issued in accordance with the conditions of the relevant market, taking into account the financing and operating position of the Company, the share price and/or other similar instruments with a market value. The issuance with an issue price below the market price of the shares is possible. The conversion rights may be exercised for a maximum period of 10 years, and the options may be exercised for a maximum period of 7 years, in both cases from the date of the relevant issuance or entry. The new registered shares shall be subject to the limitations pursuant to Article 4 of these Articles of Association.

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