Notes to the separate financial statements of Comet Holding AG

These separate financial statements were prepared in accordance with the principles of the applicable Swiss Accounting Law (Title 32 of the Swiss Code of Obligations).

Receivables and loans

Receivables and loans are stated at nominal amounts less any necessary write-downs.

Non-current financial assets and investments in subsidiaries

Investments in subsidiaries are recognized at historical cost less necessary impairment; they are individually tested annually for impairment.

Comet Holding AG directly held the following companies at December 31, 2019:

Loans to subsidiaries were as follows:

Comet Holding AG (the “Company”) is the Group’s only company listed on a stock exchange. The Company’s registered office is in Flamatt, Switzerland. The registered shares of Comet Holding AG have been listed in the main market segment of the SIX Swiss Exchange in Zurich since December 17, 2002.

Assorted data on the stock of Comet Holding AG is provided on page 32 of the annual report.

Listed and non-listed Group companies

Comet Holding AG has no publicly traded subsidiaries. The companies consolidated in the Comet Group are presented in note 2, “Investments in subsidiaries”.

Registered shareholders

At December 31, 2019, Comet Holding AG had 3,932 voting shareholders of record (i.e., voting shareholders registered in the share register; prior year: 5,121). Of the total issued registered stock, 100% (prior year: 100%) represented free float. Comet Holding AG held no treasury stock at December 31, 2019 (prior year: nil). The structure of share ownership size classes among the shareholders of record at December 31, 2019 was as follows:

This analysis includes only the stock of shareholders who were registered in the share register. At December 31, 2019 the shares of unregistered owners amounted to 31% of the total (prior year: 27%).

Significant shareholders

Ownership interests in companies domiciled in Switzerland whose shares are listed at least partly in Switzerland must be notified both to the issuer company and to the SIX Swiss Exchange when the holder’s voting rights reach, increase above or fall below certain thresholds. These notification thresholds are 3%, 5%, 10%, 15%, 20%, 25%, 33 ⅓%, 50% and 66 ⅔ % of voting rights. The relevant details are set out in the Swiss Stock Exchange Act (BEHG) and in the Ordinance of the Swiss Financial Market Supervisory Authority on Stock Exchanges and Securities Trading (the FINMA Stock Exchange Ordinance).

At December 31, 2019 the Company, according to disclosure notifications, had the following significant shareholders (defined for this purpose as shareholders with voting rights in excess of 3% of the Comet capital stock recorded in the Swiss commercial register of companies):

The Company has not been notified of nor is aware of any other shareholders that held more than 3% of its shares. To the best of the Company’s knowledge there were no voting pool agreements.

Reportable changes during fiscal year 2019

In the fiscal year, three reportable announcements were published. For a complete list of all announcements under section 20 BEHG, refer to the publication platform of the disclosure section of the SIX Swiss Exchange: www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html

Cross-shareholdings

There were no cross-shareholdings with other publicly traded companies.

Capital stock

The capital stock at January 1, 2019 was CHF 7,759,882, divided into 7,759,882 registered shares with a par value of CHF 1.00 per share.

In fiscal year 2019 the capital stock was increased by 4,326 shares from the portion of authorized capital designated for equity-based compensation. Including the increase of 4,326 shares from this portion of authorized capital, Comet Holding AG at December 31, 2019 thus had a new total of CHF 7,764,208 of capital stock, divided into 7,764,208 registered shares with a par value of CHF 1.00 per share. The capital stock is fully paid in.

At its meeting on August 9, 2019 the Board of Directors established that the capital increase from authorized capital for equity-based compensation was properly performed. The information in the commercial register, and the Bylaws of Comet Holding AG, were updated to reflect the change in capital stock.

At the balance sheet date, Comet Holding AG held no treasury stock (prior year: nil).

Authorized capital for equity compensation

Under section 3b of its Bylaws, a portion of the Company’s unissued authorized capital is designated for use only as equity-based compensation (in German this portion is known as “bedingtes Aktienkapital”). In such a capital increase, stock is issued to Executive Committee members and / or Board members of Comet Holding AG. With respect to this portion of authorized capital, the other shareholders’ pre-emptive rights are excluded. The issuance of stock or stock subscription rights is based on a compensation plan (in the form of a written regulation) adopted by the Board of Directors.

In May 2019, in accordance with the compensation plan, the members of the Board of Directors were granted a total of 1,679 shares of stock in payment of CHF 153,948 of fixed retainers due for fiscal year 2018. In addition, as part of their compensation for 2019, the members of the Board of Directors were granted a total of 835 shares in payment of CHF 76,561 of fixed retainers due for the period from January 1, 2019 to the 2019 Annual Shareholder Meeting. The fully paid shares were applied to the retainers due at a price of CHF 91.69 per share.

Members of the Executive Committee were granted a total of 1,812 shares in payment of CHF 166,142 of profit-sharing compensation due for fiscal year 2019. The fully paid shares were applied to the compensation due at a price of CHF 91.69 per share.

As a result of these grants of a total of 4,326 shares made in 2019, the Company’s unissued authorized capital for equity-based compensation showed the following movement:

At the end of the year, the remaining unissued authorized capital for equity-based compensation was CHF 198,912, or 2.6% of the existing capital stock.

Authorized capital for other capital increases

At December 31, 2019, in addition to shares outstanding and to unissued authorized capital for equity-based compensation, the Company had unissued authorized capital for purposes set out in section 3a of the Bylaws (in German: “genehmigtes Aktienkapital”). The Board of Directors is authorized, at any time until April 26, 2020, to increase the capital stock by a maximum of CHF 1.4 million by issuing up to 1,400,000 fully payable registered shares with a par value of CHF 1.00 per share, which represents 18% of the existing capital stock. Increases by way of firm commitment underwriting and increases by part of the total authorized amount are permitted. The amount of the respective issue, the date when entitlement to dividend commences, the terms of any exercise of pre-emptive rights and the nature of the contributions are determined by the Board of Directors.

The Board of Directors is authorized to exclude shareholders’ subscription rights and assign these rights to third parties if the shares in question are to be used for the acquisition of companies via equity swaps or to finance the cash purchase of companies or parts of companies, or to finance new investment projects of Comet Holding AG, or for providing an ownership interest to an industrial partner (either in order to cement a strategic alliance or in the event of a takeover offer for the Company). Stock for which pre-emptive rights are granted but not exercised must be sold by the Company at market prices.

The ownership interests in Comet Holding AG held by current members of the Board of Directors and Executive Committee are disclosed below. This disclosure includes all persons who held positions on the Board of Directors or Executive Committee for all or part of the year under review, regardless of whether they still did so at the balance sheet date. The shareholdings shown include those of respective related parties.

The Board members Patrick Jany and Christoph Kutter (who both joined the Board on April 25, 2019) and the 2019 interim CFO Beat Malacarne did not own stock of Comet Holding AG at December 31, 2019.

Each 10,000 registered shares of Comet Holding AG, of a par value of CHF 1.00 per share, represented 0.1288% of all voting power (prior year: 0.1289%). The members of the Board of Directors and Executive Committee held an aggregate total of 1.1% of voting rights (prior year: 1.1%). No material changes in ownership interests arose after the balance sheet date of December 31, 2019.

Comet Holding AG has not issued any conversion rights or stock options.

In fiscal year 2019 and the prior year, Comet Holding AG held no treasury stock.

On April 20, 2016, Comet Holding AG issued a bond in the amount of CHF 60 million (denomination: CHF 5,000). The term of the bond is five years and it matures on April 20, 2021. The fixed coupon over the term is 1.875%, payable annually on April 20.

Listing: SIX Swiss Exchange (security number 32 061 943, ISIN number CH0320619437, ticker symbol COT16).

The Group is taxed as a single entity for purposes of value-added taxation, and Comet Holding AG therefore has joint and several liability for the value-added tax obligations of its Swiss subsidiary.

The annual average number of full-time equivalents in 2019 and 2018 was less than 10.

On February 3, 2020, the subsidiary Comet Technologies Malaysia Sdn. Bhd. was founded in Penang, Malaysia. The company is wholly owned by Comet Holding AG. There have been no other events after the balance sheet date with a material effect on the amounts in the financial statements.

The Board of Directors released these annual financial statements on March 12, 2020 for publication and will present them to shareholders for approval at the Annual Shareholder Meeting on April 23, 2020.