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R&M CoRpoRate SoCial ReSponSibility 1

Corporate Social Responsibility

English

2

Preface

Publication details

Published by: Reichle & De-Massari AG, Corporate C

Most of the photographs in this report were taken b

Paper: FSC-certified; using resources from sustainab

Dear Reader

As a result of the global financial and economic crisis, governments, politi-cians, society and industry are called upon to think and act in a new and com-prehensive way. For us as for other international companies this means that the demands placed on our employees and on the quality of our processes and procedures keep on rising. We, too, are called upon to improve our pro-ductivity as we compete on the international stage, and to further expand our leading position, particularly in emerging markets. Together with our partners we have to find new ways to make our services available in as eco-friendly a manner as possible. We can only hope to achieve that goal if we abide by our system of values, if we consistently apply the rules of proper business con-duct, and demonstrate time and time again our ability as a company to cope with global transformation processes.

For us, key factors for the future include the management of environmental aspects and the measures we adopt to establish and expand our innovative strength, along with the development of the human resources that entails. It is no surprise, then, that this report focuses on these aspects. This brochure is meant to give you an initial insight; we hope it also serves to trigger a desire to look more closely at these issues.

Wetzikon, April 2010

Martin Reichle

R&M CoRpoRate SoCial ReSponSibility

ommunications, Binzstrasse 31, CHE-8620 Wetzikon; Copy and Layout: Corporate Communications R&M.

y our member of staff Jürg Neff on the construction site for the new company building at HQ.

le forests; pulp produced chlorine-free.


Contents

2 Preface

4 A family business A family of entrepreneurs looks to the future The company at a glance Quality Innovation

6 Organization Management approach Code of Conduct Employee structure Qualifications, basic and advanced training Health management Equality Motivation and satisfaction Anti-cyclical investment policy

10 Region Committed to our site CS location monitoring 2009 European Innovation Scoreboard 2009 Committed to promoting young talent

12 Partners Vendor selection / purchasing guidelines Partnerships / joint ventures

14 Environmental aspects Management approach Energy consumption Reduction in CO2 emissions Use of materials

17 Future 2010 Sustainable Development Program

18 R&M in figures

19 Definition of sustainable development

4

Hans ReichleCompany founder

A family business

A family of entrepreneurs looks to the futureThe fundamental idea of entrepreneurial responsibility is deeply rooted in the personal value structure of R&M’s company founders and is therefore also at the very core of its corporate philosophy, shaping every single strategic decision. And this was the case long before the concept of Corporate Social Res ponsibility existed here in Switzerland. In keeping with these values, R&M’s management approach encompasses economic, ecological and social aspects to an equal degree. Forty-six years after the company was founded the objective remains the same: to set up a business that benefits every stakeholder – our customers, our employees, our partners and the region as a whole.

The company at a glanceThe independent Swiss family business of Reichle & De-Massari AG (R&M) boasts more than 46 years of experience in the information and communica-tions technology market. We develop and manufacture passive cabling solu-tions for high-quality communication networks (Layer 1) and, with our copper and fiber optic systems, make a major contribution worldwide to operational reliability in voice, data and image transmission. Our solutions stand out by virtue of their maximum availability in cost-effective network operations. With our high product quality and forward-looking system design we ensure that networks are future-capable and investments secure in the long term. Our cabling solutions are used in office buildings, by network operators, in resi-dential buildings and in industry. We are the market leaders in Switzerland, and we rank among the top three players in Europe and the Middle East. R&M is present with its own market organizations in more than 30 countries. The company was founded in 1964 and is fully owned by the Reichle family. Together with Martin Gasser (CFO) and Martin Rosatzin (CTO), brothers Martin and Peter Reichle now run this dynamic company in its second generation as CEO and COO respectively.


Martin ReichleCEO

Peter ReichleCOO

Martin GasserCFO

A family business

QualityThe prime concern with all R&M products and services is ensuring an uncom promisingly high quality and intelligent modularity. And because these are such important issues we have put in place a system of Corporate Quality Management. It is key to the high investment security our customers demand. It applies not only to our products and systems, but also to our support, our services and our processes, resulting in convincing customer solutions. Quality Management covers Quality Planning, Quality Assurance and Quality Control.

InnovationHigh-quality innovative products have always been a trademark of R&M. That is why Research and Development (R&D) is such an important part of our company. We bundle technological competence in the area of high-frequency technology and fiber optics to create the mainstay for constant innovation. Our objective is to maintain and strengthen the culture of innovation within our company, so we deploy all available in-house and outside resources to detect trends very early on through internal and external sources. We also play an active role in standardization bodies and operate a company-wide employee suggestion scheme, which runs via a central platform on the Intranet. Our Innovation Radar scans for concrete ideas capable also of influencing our services and processes.

Through our close proximity to our partners we are able to develop needs-based, innovative products, solutions and services. And our system solu-tions set the standard in modularity, application diversity and flexibility. So our customers benefit from far-sighted solutions capable of meeting future challenges head-on.


Martin RosatzinCTO

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Organization

Management approachCommitted, qualified and healthy employees are essential to the success of any business. That is why R&M operates a personnel management system based on sustainable values that puts all the focus on the interests and qualities of its staff. The result is a very good working climate and a high level of innovation. For us, sustainable personnel management means communicating as transparently and as openly as possible in-house too, and promoting a team spirit. We celebrate successes together and master challenges as a team.

Code of ConductWe support our staff in adhering to our company principles. Our Code of Conduct defines the conduct we expect of our employees in accordance with these principles. The Code is an integral part of the conditions of employment, and all employees of the R&M Group undertake to observe the principles of the Code of Conduct. A Coordination Unit has been set up to this effect and will be operational as of mid-2010. It is there to advise employees, examine any violations, and answer questions. In extreme cases, violations of the Code of Conduct are punished with instant dismissal and even criminal prosecution.

Employee structureA total of 600 people were employed with R&M as at December 31, 2009. The number of employees is down slightly on last year’s figures. By con-trast the number of apprentices increased proportionally to 6.5 % of the workforce. We are actively committed to apprenticeship training and offer apprenticeships in the commercial sector as well as in development, IT and logistics. For 2010 we have set ourselves the target of increasing the apprentice quota to 8 %. This corresponds to a doubling of the quota in two years and is more than 2 % above the national average of 5.7 %*. R&M regards this as part of its mission to assume responsibility and make a lasting contribution to the training of young people.

* Source, BFS, 2008


Organization

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Qualifications, basic and advanced trainingAll our employees are qualified and graded according to Towers Watson (formerly Watson-Wyatt). This ensures the greatest possible fairness in wages throughout the company.

Our very own R&M Academy is responsible for the technical and personal advanced qualifications of our workforce and is continually adapted in line with economic requirements. Each year priorities are set to help achieve our corporate strategy. The topics selected are based on the results of the appraisal interviews conducted annually with our staff.

Each employee has the possibility of taking part in an individual training pro-gram. R&M promotes its workforce through a variety of training courses and workshops. And occupational training is not aimed just at young employees.

R&M is an ISO 9001 certified company. We have long recognized that the high quality standards of our processes and services can only be sustained by employing an outstandingly qualified and motivated workforce.

In August the new R&M process environment was implemented, a result of our process re-engineering activities.

2009 saw the launch of our continuous improvement process (CIP) entitled “R&M Get Better”. In connection with the new processes the relevant internal audits were established, and they are set to become a cornerstone of CIP in the medium term.


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Organization

Health managementSafety at work is part of our company-wide Safety Management. It includes for example extracting the adhesive vapors released during fiber optic manu-facture. A specific prevention program with a range of measures relating to exercise, relaxation and healthy eating are designed to promote a holistic health awareness among our workforce worldwide. The program comprises mini workshops on the above topics as well as a company-wide exercise day. A massage service is offered at subsidized rates to our workforce at the R&M headquarters in Wetzikon as well as in Asia. Other health benefits in-clude the provision of free drinking water and seasonal and regional fruit. Seated and pedestal desks for office workstations are available on request. As a result of these measures, absenteeism due to illness has been declining continually and was down to 1.7% in 2009. Sustainability is a defining a spect of the continuation of this program in the future. All the meeting rooms in the new building are to be equipped with standing desks. Standing makes a welcome change from sedentary activities. Meetings also become more efficient as a result and are around 30 % shorter in duration.

EqualityNo gender-specific differences are made in terms of remuneration or career paths. At R&M the defining criteria for professional success are know-how, experience and Evolution Drivers.

Motivation and satisfactionThrough our participation in the cash Employer Award, each year we obtain an objective overall view of the current mood among Swiss employees. These activity and industry benchmarks are assessed to provide measures that are communicated to the workforce and then checked at a later stage with regard to the achievement of objectives. This constant process enables us to improve steadily and significantly, for our sake and the sake of our workforce.

Our remuneration system is characterized by long-term performance incentives set in the future. It is based on sustainable incentives and shapes


Organization

behavior patterns that systematically enhance the motivation and solidarity of managers and employees. It includes performance-related remuneration based on jointly defined annual targets (MBO) and oriented against inter -national compensation studies (Towers Watson). Employee satisfaction is ascertained regularly using internal audits and employee surveys; indeed, we believe that employee satisfaction is a major contributing factor to the quality of our work.

Flextime working arrangements are also in place, offering flexibility to full-time and part-time employees.

Anti-cyclical investment policyThe difficult global economic situation poses a challenge also to R&M. Thanks to our long-term continuity-based business operations we have the financial room for maneuver we need to offset the impact of the crisis. We are seizing this opportunity to implement an anti-cyclical investment policy aimed at securing, and further expanding, our market position and the qualified jobs we need to attain our objective. This investment activity puts in place sound basic conditions not only in the current economic climate but also to enable us to participate in the future economic upturn.

We have for instance increased the number of employees in Product Management and in R&D to push ahead specifically with new solutions for data centers, Fiber To The Home (FTTH) and new copper technologies such as Cat. 6A.

Other strategic projects include the new building that is to house our inno-vation, production and logistics center at the company headquarters in Wetzikon as well as the introduction of a powerful project management tool for optimum resource planning. The introduction of SAP has also helped us optimize our processes further. With this efficiency boost we are able to serve our customers even more effectively and rapidly.


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Region

Committed to our siteThe Wetzikon site has always played a key role for R&M, a company founded back in 1964. The decision to construct the new office building in Wetzikon, too, is a clear commitment to Switzerland as a production site and to the region’s continued economic development. We keep our production costs competitive through effective controlling, efficient procedures, a high level of automation, and measures aimed at promoting high levels of commitment among our workforce.

Besides the excellent transport connections, we particularly appreciate the good political and economic climate and the expertise of the suppliers based in the region. We consider the structures that have evolved here as a clear-cut competitive advantage. Other location advantages include good access to universities, advanced technical colleges and institutes as well as the proverbially high levels of motivation and low absenteeism of the workforce. For a technology-oriented company such as R&M these outline conditions are key to continuing to operate successfully in the market.

The Zurich Oberland region has a long industrial history, and that heritage is still felt today. The authorities have a great deal of understanding for the concerns of entrepreneurs. And there are many energetic entrepreneurs. What’s more, many local residents are keen to work in industry. So together with the optimum transport connections these are key components that make for an attractive environment for industrial firms.

CS location monitoring 2009In a current location ranking of the Greater Zurich Area, the Zurich Oberland region was voted the most innovative industrial location and is among the top ten regions nationwide in Switzerland.http://www.greaterzuricharea.ch/app/app_publications/publications_de.asp


http://www.greaterzuricharea.ch/app/app_publications/publications_de.asp

Region

European Innovation Scoreboard 2009In the ninth edition of the European Innovation Scoreboard (EIS), which provides a comparative assessment of the innovation performance of the European states, Switzerland led the ranking as innovation leader in Europe. The Summary Innovation Index (SI) gives an at-a-glance overview of aggregate national innovation performance and is calculated as a composite of the 29 EIS indicators.For more information visit http://www.eis.eu/

Committed to promoting young talentWe support the junior sections of various team sports throughout Wetzikon’s catchment area. It is a way for us to bridge the gap between business and society. We regard this approach not just as a way of assuming our social responsibility but also as a worthwhile investment in a common future. As a result of our growth strategy and the increase in production capacity, R&M is creating additional jobs in the medium term – vacancies which we would also like to fill with employees from the region.


http://www.eis.eu/

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Partners

Vendor selection / purchasing guidelinesTogether with our suppliers we want to sustainably foster and maintain inno vation and maximum performance. Our policy of cooperation is based on mutual expectations and duties, with the focus on quality, reliability, transpar-ency, communication and sustainability.

The guidelines we set for our suppliers are formulated by standards and defined requirements. These standards contain material specifications and regulations governing manufacturing processes. We expect our suppliers to observe statutory norms and environmental guidelines, engage in preventive environmental protection and adhere to, and promote behavior based on business ethics. Moreover, all business activities within the supply chain must comply with the local legislation. In instances where national statutory regulations, international legal provisions, industry standards and our guide-lines all address the same topic, the most stringent provisions are to be applied in each and every case.

At least once a year we visit our 35 main suppliers from eight countries, and we use vendor assessments as part of our supplier management system to rate and re-qualify them. If shortcomings emerge, they are given the possibility of remedying them within a deadline which we set. Vendors who fail to comply, or no longer comply, with our guidelines are not taken into consideration.

Take the example of copper cable purchasing. A defined process (Quality Assurance Process) for testing and qualifying copper cables for our Freenet system was put in place together with our vendors using Sharepoint. This means the vendor concerned obtains access to an Extranet hosted by R&M. The vendor is required to save his test results within the production batches on the platform. The reports are then verified at R&M’s own test laboratory, with additional tests carried out if required. In the event of deviations, the vendor is required to make good immediately. This process is to be rolled out worldwide in the very near future. Suppliers’ Days are also held on a regular basis to promote communication and the exchange of knowledge.

Integrating suppliers at an early stage of development projects is an impor-tant success factor for ensuring the transfer of knowledge on the one hand and achieving the high time-to-market targets on the other.


Partners

Partnerships / joint venturesSwitzerland’s economy is exposed to intense international innovation com-petition. So good cooperation between universities, advanced technical colleges, institutes and businesses operating in Research and Development (R&D) is of particular importance to us for seizing the opportunities that present themselves.

R&M operates various projects with partners both in Switzerland and abroad, for instance the Celestica Research Institute in Canada. Together we are currently drawing up a white paper for the International Electrotechnical Com-mission (IEC). It examines the reliability of high-quality fiber optic connectors for applications in the 40 Gbps range.

In the Plastic Optical Fiber (POF) sector we co-authored a scientific paper with the University of Athens. The paper looks at the influence of cascaded connectors on the bit error rate (BER) with regard to an IEC standardization of an optical interface for a POF connector.

Together with the University of St. Gallen (HSG) and 10 partner companies, we are developing efficient instruments to carry out supply chain assess-ments with our partners in the logistics sector.

In cooperation with the Swiss Federal Laboratories for Materials Testing and Research (Empa) and the Paul Scherrer Institute, we also conducted analyses aimed at optimizing the cleave surface in fiber optics. The findings have successfully been incorporated into our developments.

Other cooperation projects with national and international universities and technical committees are underway and will be published in due course.

R&M was actively involved in the Life in the S5 City project by the Swiss Federal Institute of Technology Zurich (ETH). It showcases the region’s developments and its potential, and provides decision-making criteria for future regional development, policy and business.


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Environmental aspects

Management approachThe main impact of our business activities on the environment results from the continual improvement of our production processes and the careful handling of the resources required.Although our manufacturing activities are limited to assembly and perfor-mance & materials testing, the ISO 14001 environmental management standard first established in 1996 is applied at R&M through self-declara-tion. No materials are processed and no auxiliary materials are used. For this reason ISO 14001 certification was dispensed with, a standard that was created primarily for manufacturing companies. The points on life-cycle assessment contained in the standard do not apply to us.

We are also guided by the RoHS and WEEE environmental directives.

Energy consumptionAs a matter of principle R&M does not operate production facilities with a large energy consumption. For example we adapted the production process for our components in such a way as to dispense with laser welding due to its high energy requirements and the risk posed to the workforce.

We also place a great deal of emphasis on energy efficiency and the sparing use of resources at our offices. The infrastructure set up around our employees corresponds to that of an ecologically oriented office environment. All our workplaces use flat screens and all the equipment is fitted with an energy-saving circuit. These measures have helped to considerably reduce our energy consumption.


Environmental aspects

Reduction in CO2 emissionsConcern about the future calls for new, alternative concepts. R&M develops sustainable technologies, i.e. products and systems, that allow the efficient use of resources without putting a burden on the atmosphere.

We realized early on that by reducing our transport routes we could make a sizeable contribution towards reducing CO2 emissions, too. As a result of the constant monitoring and fine-tuning of our logistics processes, we have been able to cut our deliveries of goods to the regions to once a week only, without any losses.

Our new company premises, which will be ready for move-in by mid-2010, is another trendsetting example. The R&M Cube is one of the greatest low-exergy office buildings anywhere in Switzerland. With sustainability in mind we decided to erect the new office building entirely in keeping with the principles of Minergie/Low Exergy. By applying this exciting and spectacular concept to industrial buildings technology we are able to keep operating and maintenance costs low and cut our energy consumption by around 30 per-cent compared with conventional building services management. We are also helping to conserve energy resources as we do not use any fossil fuels such as oil or gas. CO2 emissions are reduced significantly as a result. As of August 2010 the dynamic energy consumption of the R&M Cube can be monitored online, in real time.

The R&M Cube is part of our anti-cyclical investment program, which is being implemented in spite of the difficult economic context. It also includes a new ERP solution, which will result in a significant increase in efficiency, and will come to bear fully in the new high-bay warehouse facility.


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Environmental aspects Future

We are shortly to introduce an Energy Management Cockpit (Monitoring) and Consultancy for all R&M buildings. Responsibility for this task lies with Reichle Immobilien AG and applies to all new buildings worldwide.

Use of materialsWith regard to the use of adjuvants such as solvents, resins and paints, we make every effort either to dispense with them completely or, where they are necessary, to use them very sparingly. Our Research & Development (R&D) is required to make consistent use of eco-friendly materials and to examine the usability of possible alternatives as part of a continuous improvement process.

To avoid incurring any unnecessary logistics expenditure, R&M avoids partial deliveries whenever possible. We also avoid oversized packaging, with the advantage of a much reduced consumption of filler material.

We use chlorine-free bleached or recycled paper for all promotional articles and correspondence paper.

The appropriate containers have been set up in all our areas of activity so that waste and scrap material can be disposed of properly and, whenever possible, recycled.


Environmental aspects Future

2010 Sustainable Development Program

Objective Measure Responsibility Deadline

Optimize our quality processes

Integrate process management view into 2010 management review

Corporate Quality Management

December 31, 2010

Reduce quality costs from 1.07 % to < 0.9 %

Reduce fixed quality costs

Corporate Quality Management

December 31, 2010

Promote junior staff Increase apprentice quota to 8 % of the workforce domestic

Human Resource Management

September 30, 2010

Employee satisfaction from the 2010 annual appraisal interview is > 5.0

Increase in manage-ment competence through Evolution Drivers workshops


March 2011

Increase in employee competence level

Focused training pro-gram based on the analysis of employee appraisal interviews


December 2010

SAP rollout Roadmap created for the rollout for market organizations and regions

CFO June 30, 2010

Securing the financial strength, EBIT > 10 %

Efficiency boost and cost control through process optimization

CFO December 31, 2010

30 % CO2 reduction New “Cube” building at the Swiss head-quarters

COO August 31, 2010


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R&M in figures Definition of sustainable development

Key financial figures 2009 2008 2007

Sales CHF million 192 247 241Domestic % 25 22 25Foreign % 75 78 75EBIT % 6.0* 7.0* 13.0Innovation** % 21 20 16Development expenditure % 4.5 4.4 4.6* Includes an exceptional charge for PC restructuring** Sales of products less than 3 years in age

Key employee figuresNumber of employees 600 676 645Domestic % 55 53 55Abroad % 45 47 45Proportion of apprentices*** % 6.4 4.8 3.7Fluctuation rate % 8.7 11.2 8.1*** Domestic

Key HSE (Health, Safety & Environment) Power consumption1 kWh 1 100 370 993 969 956 635Paper consumption1 metric tons 6.8 9.0 7.9Water consumption1 m3 2 326 2 117 1 956Heating oil consumption1 liters 30 981 19 374 24 956Number of stoppages2 cases 366 399 385Long-term stoppages cases 3 3 7 hours 2 250 3 332 6 8551 Headquarters Switzerland2 Illness and accident


R&M in figures Definition of sustainable development

Sustainable action is based on the three-pillar concept of economic, ecologi-cal and social development (the “triple bottom line”), all of which interact. The concept of sustainability was first brought to the world’s attention in 1987 when the Brundtland Report entitled “Our Common Future” was released by the United Nations World Commission on Environment and Development. The Brundtland Commission defined sustainable development as a develop-ment that “meets the needs of the present without compromising the ability of future generations to meet their own needs”. And although the report was published over twenty years ago now, its issues remain as topical as ever. With its report the Brundtland Commission was responding to a demand for sustainable development first issued by the Club of Rome in 1972. Founded in 1968, the Club of Rome adopted a global perspective in examining the causes and inner correlations of the economic, ecological, political and demo-graphic situation and development in the world.

R&M is guided by the Brundtland Commission’s definition of sustainability and has shaped its entrepreneurial activities accordingly. This means that it pursues a company policy that takes account not only of economic require-ments but also of ecological constraints while striving for social equilibrium (the “triple bottom line”).

Economy Society

Ecology


20 R&M CoRpoRate SoCial ReSponSibility

Reichle & De-Massari AG

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CHE-8620 Wetzikon

Phone +41 (0)44 933 81 11

Fax +41 (0)44 930 49 41

www.rdm.com

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