AnnuAl RepoRt 2010

Electrotechnics Division sales were
104.6 % higher than the previous
year, and 41.4 % higher excluding
the Electrotechnics Americas acquisition,
as the sector experienced
strong re-stocking combined with
large underlying demand increases.
Thanks to a particularly effective integration
combined with strong demand
Electrotechnics Americas made a small
operating profit during the year, when
the acquisition plan had anticipated a
loss. The Division returned to profit for
all of 2010, including Electrotechnics
China which also generated an operating
profit for the first time during the
year.
The closure of the Watches and
Jewelry Division in Switzerland was
completed to schedule and significantly
below budget as better than planned
final production orders and equipment
sales were achieved. This more than
offset increases in the severance package
agreed with affected employees.
The Group has a net cash position
of CHF 51.9 million at 31 December
2010, in addition to which Group had
a book value of CHF 46.3 million strategic
platinum group metals. CHF 30.6
million of these metals had already
been sold forward for value in 2011
and have realized CHF 20.3 million
gains during 2011.
The shareholder’s equity at 31
December 2010 amounted to CHF
310.5 million or 60.3 % of the total
balance sheet value. The Board of
Directors intends to invest in organic
growth and acquisitions and proposes
to not pay any dividend in 2011.
During 2010 the Group completed
the implementation of new employee
share participation plan, and over 118
senior and key employees of the Group
were able to invest in total CHF 18.4
million shares in Metalor Technologies
International SA via several special
purposes vehicles. These vehicles
were loaned a total of CHF 11.6 million
by the Company in order for them to
buy further shares in the Company and
thus create a more leveraged participation
than would be available by direct
participation in the Company itself. All
shares were sold at market value.
Identification of risks to which the
Company and its subsidiaries are
exposed, as well as adequate organizational
means to measure and
manage such risks, are among the
Board of Directors’ duties. During
2010, the Board of Directors actively
participated in the process of identifying
strategic, financial, operational
and other major risks. The Company
has implemented a procedure which
ensures that such risks are adequately
managed at divisional and corporate
level under the supervision of
the Corporate Management and are
regularly reported to the Board. This
allows the Board of Directors to gain
a comprehensive knowledge of the
Company’s major risks and to adequately
prioritise actions and allocate
resources.
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