Corporate governance

Corporate governance at the Bell Food Group Ltd. encompasses all the binding principles and rules that relate to the company’s management, control and organisation.

The Bell Food Group Ltd is listed on Switzerland’s SIX stock exchange and follows the Swiss Code of Best Practice for Corporate Governance of economiesuisse and complies with the SIX Swiss Exchange Directive on Information relating to Corporate Governance (DCG). The corporate governance rules and regulations of the Bell Food Group Ltd are based on Swiss law, the Articles of Association and the by-laws. The Board of Directors reviews the Articles of Association and by-laws at regular intervals and adjusts them in line with changed circumstances.

Information policy

Every year in February, Bell Food Group Ltd publishes an annual report on the results for the previous year. In August, it publishes an interim report on the results for the first half of the current year. Both reports provide information on the business operations and results of the Bell Food Group. Current developments are announced in media releases and notices published on the company's website.

Board of Directors

The Board of Directors of Bell Food Group Ltd. currently consists of seven members who are elected for a period of one year at the annual general meeting.

Management team

The Group Executive Board of the Bell Food Group consists of the CEO, the CFO and the Division Heads of Bell International, Bell Germany and Convenience.

Group structure

Bell Food Group Ltd is the parent company of the Bell Food Group and has its registered office in Basel in Switzerland.

Media Release: Bell Food Group Investor Day in Marchtrenk

09.05.2019

At the Bell Food Group Investor Day 2019, investors and analysts visited the new Eisberg production site in Marchtrenk, eastern Austria, the most modern convenience food processing plant of its kind in Europe.

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Important dates

You can find all the relevant publication data and information on Bell Food Group events at a glance in our agenda.

Agenda

Capital structure

Share capital

The company's share capital is fully paid up and equates to CHF 3,142,856. It is divided into 6,285,712 registered shares with a nominal value of CHF 0.50 each.

Additional share information can be found on pages 6, 36 and 76 of the 2018 Annual Report.

Authorised and conditional share capital

There is no conditional or authorised share capital.

Changes in capital

On 10 April 2018, the Annual General Meeting of Bell Food Group Ltd. approved a capital increase by way of a subscription right offer and thus the increase of the company's share capital by CHF 2,000,000 divided into 4,000,000 registered shares with a nominal value of CHF 0.50 each. 2,285,712 new registered shares were issued in the context of the ordinary share capital increase. Since 7 June 2018, the company's share capital amounts to CHF 3,142,856, divided into 6,285,712 registered shares with a nominal value of CHF 0.50 each.

Shares, participation and dividend-right certificates

All registered shares of Bell Food Group Ltd. have a nominal value of CHF 0.50 each. Each share has one vote. However, shareholders can only exercise their voting rights if they are entered in the share register of Bell Food Group Ltd with voting rights. All registered shares are entitled to a dividend, except the treasury shares held by the company. Shareholders are not entitled to have certificates for registered shares printed out and delivered.

Bell Food Group Ltd has no outstanding participation certificates or dividend-right certificates.

Restriction of transferability and nominee entries

The transfer of registered shares as property or usufruct requires the permission of the Board of Directors. The Board of Directors may delegate all or some of its powers in this regard. In order to be registered in the share register, buyers have to submit a declaration that the shares were bought in their own name and on their own behalf. The company can otherwise only refuse to register someone as a shareholder for good cause and if a single shareholder directly or indirectly acquires more than five percent of the share capital.

Convertible bonds, bonds and options

Bell Food Group Ltd has no outstanding convertible bonds or options. Information about the outstanding bonds is provided on page 69 of the notes to the 2018 Annual Report.

Do you have any further questions?

If you have any questions about this position, please contact us:

Davide Elia
Head of Corporate Marketing / Communication

+41 58 326 3030 media@bellfoodgroup.com

Internal organisation and areas of responsibility

The Board of Directors of Bell Food Group Ltd defines the corporate strategy, issues the required instructions and oversees all the activities of the Bell Food Group, while the Group Executive Board is responsible for business operations. The Board of Directors reviews business planning, in particular the annual, multi-year and investment plans as well as the corporate objectives. The Board also identifies opportunities and risks and initiates any measures that are required. The areas of responsibility of the Board of Directors and the Group Executive Board are set forth in detail in the by-laws.

In addition to its non-transferable responsibilities and powers, the Board of Directors decides on mergers, litigation and contracts of special importance, capital investments in excess of CHF 5 million, and acquisitions and sales of property and companies. The Board determines the Bell Food Group's corporate structure and is responsible for hiring, dismissing and overseeing company managers and executives. The Board defines the company's salary, social security and investment policies, and monitors their implementation. It also makes decisions concerning the company's representation in industry associations and interest groups, the granting of third party loans exceeding CHF 100,000 and guarantees in any amount.

With the exception of the Compensation Committee, the Group Board of Directors is responsible for observing the recommendations outlined in the economiesuisse guidelines regarding the function and remit of the individual committees of the Bell Food Group. This makes it easier to retain an overview and takes account of majority shareholder structures.

More information on the Compensation Committee is provided in the compensation report on page xx.

The Board of Directors meets at least seven times a year, usually once every two months. Meetings generally last between four and six hours. Special meetings to discuss strategic transactions and other business likely to have a major impact are held as and when needed. The Chair of the Group Executive Board (CEO) and the Head of the Finance/Services Division of the Bell Food Group (CFO) are invited to participate in these meetings. No external advisors were engaged in the reporting year.

Since March 2018, the Eisberg and Hilcona divisions and, since June 2018, the Hügli division have been reporting directly to the Board of Directors of Bell Food Group Ltd, which has led to an increase in the number of Board meetings in the reporting year compared to previous years. In 2018, the Board of Directors held ten ordinary meetings, four extraordinary meetings and one constitutive meeting. The extraordinary Board meetings concerned the takeover of Hügli by way of a public offer and the capital increase carried out in the reporting year. The attendance rate at Board meetings was 93 percent.

In addition to the usual day-to-day business, the Board of Directors concentrated on the following subjects and projects in 2019:

  • Acquisition and integration of Hügli Holding Aktiengesellschaft and Sylvain & CO SA
  • Investment in the Dutch start-up Mosa Meat and acquisition of the assets of Grande Boucherie du Molard SA
  • Investment programme for Bell's locations in Switzerland (planning horizon stretching into 2025) and implementation of the new building projects of Bell Spain and Eisberg Austria
  • Preparation and implementation of the ordinary share capital increase and floating of two bonds
  • In-depth discussion of business performance in the reporting year
  • Adoption of the new quality strategy for the Bell Food Group and sales market strategy for Eisberg
  • Strategic decisions regarding implementation of the IT strategy at the Bell Food Group
  • Assessment of the site design for a new fresh convenience plant in Bad Wünnenberg (DE)
  • Execution of an employee survey for the Bell Food Group
  • Tender for external auditors

As a rule, the Board of Directors carries out a self-evaluation every two years during which the individual Board members are asked to comment on strategy, culture, competencies, organisation and governance. The most recent self-evaluation took place in December 2018.

Information channels and control instruments of the Group Executive Board

The Chairman of the Group Executive Board (CEO) and the Head of the Finance/Services division (CFO) regularly report on business performance to the Board of Directors. The Chairman of the Board of Directors is in close contact with the Group Executive Board and usually meets with the CEO once a month.

The Head of the Bell Food Group Finance/Services division (CFO) submits a management report (MIS) to the Board every month including a consolidated and a division income statement, key indicators and analyses. Financial reporting is a permanent component of Board meetings. Deviations are discussed and the measures that may be required are implemented.

Internal control system

The Bell Food Group operates a comprehensive internal control system (ICS), based on the internationally recognised COSO framework (www.coso.org), that is an integral component of quality assurance (QA). This was restructured in 2017/2018 and implemented step by step at all units of the Bell Food Group. Controls focus even more sharply on asset protection and financial reporting. Institutionalised assessments measure the quality of the internal control system. Every year, the results of these assessments are compiled in a report and binding measures are defined for areas where potential for improvement has been identified.

Internal audit

In addition to the statutory auditors, internal auditing monitors compliance with guidelines and regulations as an independent entity on behalf of the Board of Directors and reviews the expedience of control instruments and the organisational structure and procedures as well as the effectiveness of the internal control system. It monitors the development of new business processes and modifications to existing business processes in a supervisory or advisory function and supports the Group Executive Board in the achievement of its objectives by making recommendations for improvements to business processes. Internal audit pursues a risk-oriented approach to auditing. Findings are documented and communicated to the Chairman of the Board of Directors. The implementation of measures is monitored.

Internal audit coordinates its auditing activities and maintains a close exchange of information with the statutory auditors.

Auditors

Auditors

PricewaterhouseCoopers; since 1998

Auditor in charge

Gerd Tritschler, lead auditor since 2013

At the recommendation of the Board of Directors, the auditors are elected by the Annual General Meeting every year. Re-election is possible.

The Board of Directors oversees the activities of the external auditors. The auditors brief the Chairman of the Board of Directors on the results of their audit three times every year. They also report to all members of the Board once every year.

The performance of the auditors is assessed by the Chairman of the Board of Directors, the Chairman of the Group Executive Board (CEO) and the Head of the Bell Food Group Finance/Services division (CFO) on the basis of comprehensive assessment criteria. The focus falls on the audit team's technical competence, assertiveness, independence and interaction with our internal units. Other external factors also affect the assessment. The auditors are elected by the Annual General Meeting every year.

The activities of the statutory auditors comprise their legal and statutory obligations, including an evaluation of the existence of the internal control system (ICS).

Compliance

Bell Food Group Ltd is committed to complete integrity and compliance with the laws as a central tenet of its corporate culture. Management does not permit corruption or breaches of competition laws. A central compliance system is in place for the whole Group designed to prevent, identify and react to compliance breaches. The focus falls on antitrust law and the Bell Food Group's preventive measures in this area. Employees at all relevant levels are regularly trained in order to improve their understanding of the issue of compliance. The aim is to prevent potential misconduct in advance by raising awareness of and clarifying this subject. The issue of integrity is constantly highlighted as part of an ongoing dialogue.

The Bell Food Group has its own Code of Conduct. This framework condenses many existing guidelines and describes the rules that are binding for the company and all its employees in their dealings with one another as well as with their business partners.

Data protection is an element of compliance and this area was restructured in terms of content and personnel in 2018 in line with changed statutory framework conditions in the European Union. Data protection guidelines were adopted, a white paper was drawn up with standards, organisational charts, process workflows and recommendations and intensive training courses were held to raise awareness of the topic. The data protection guidelines and software tools were introduced and implemented throughout the Group. The Group companies carried out self-audits and Group-wide stress tests in preparation for information requests under the EU's General Data Protection Regulation.

Do you have any further questions?

If you have any questions about this position, please contact us:

Michael Gloor

+41 58 326 2754 info-compliance@bellfoodgroup.com

Risk management

The Bell Food Group has applied structured risk management since 2009. As a food manufacturing company, the risk situation can be described as stable overall. As part of the risk management process, the Board of Directors, Group Executive Board and Executive Boards of the country organisations assess the major risks every year. The Bell Food Group generally defines risk as possible events or actions that could lead to a deviation from the defined objectives or strategy implementation. Positive deviations are seen as opportunities and negative deviations are deemed to be risks. Opportunities are integrated into the strategy process, while negative deviations are analysed during the risk management process. Risks are assessed for probability of occurrence and quantitative impact in the event they occur.

A full survey of the possible risks is carried out every three years. The risks that are relevant for the Bell Food Group are identified and measures are formulated if possible to reduce the probability of occurrence and/or the impact of potential risks. Every measure is given a responsible owner. In the in-between years, the Board of Directors and Group Executive Board monitor the status of the measures and carry out current assessments. As part of the risk management process of the Bell Food Group, risks that could potentially cause a loss of more than a specified amount at EBIT level within three years are actively managed. The relevant level of loss for these major risks is CHF 5 million for the Bell Switzerland division and CHF 1 million for the other divisions. Where possible, safeguards and measures are implemented to protect the company against risks that cannot be influenced or that can only be influenced to a limited extent.

In 2018, a new risk assessment was carried out for Hügli and a risk management audit was carried out for Bell Switzerland, Bell International, Hilcona and Eisberg. Management has identified a sudden increase in raw materials prices, epidemics, shifts in agricultural policies and changed consumer needs as major risks.

The financial market risks are limited to foreign currency exposure, in particular in the Eurozone.

Internal audit carried out general health checks to identify the operational risks associated with new acquisitions, and Management defined and implemented the required measures.

More information on risk assessment is provided on pages 30 and 31 of the 2018 Annual Report.

Board of Directors

The Board of Directors of Bell Food Group Ltd. currently consists of seven members who are elected for a period of one year at the annual general meeting.

Management team

The Group Executive Board of the Bell Food Group consists of the CEO, the CFO and the Division Heads of Bell International, Bell Germany and Convenience.

Group structure

Bell Food Group Ltd is the parent company of the Bell Food Group and has its registered office in Basel in Switzerland.