Cotecna Annual Activity Report 2012

ANNUAL ACTIVITY REPORT

Established in Geneva, Switzerland, Cotecna is one of

the world’s leading companies in the fields of inspection,

security, testing and certification.

A world leader in Customs inspection contracts, Cotecna

specializes in the development of solutions enabling gov-

ernments to combat fraud, to protect Customs revenue,

to maintain internal security and to facilitate lawful com-

mercial exchanges at national borders.

The company also provides the private sector with a wide

range of testing, inspection and certification services, as

well as assistance in trade finance services and electronic

documentation.

Founded by Elie Georges Massey in 1974, Cotecna is a family-

owned business with an international network comprising

around a hundred offices in more than 60 countries. The

Group, with a workforce of close to 4 000 employees and

agents, combines professionalism, reliability, infrastruc-

ture and international expertise with flexibility and proximity.

Cotecna’s proactive approach ensures that its services

always respond to the changing needs of its customers.

Every year, the Group issues government certificates for

goods valued at over USD 30 billion.

PROXIMITY, INNOVATION AND EFFICIENCY:

THE VALUES WHICH MAKE COTECNA

A RESPECTED LEADER

IN ITS INDUSTRY.

COMPANY PROFILE | 1

CONTENTS

INTERVIEW WITH THE CEO 4

Interview with Robert Massey, CEO of Cotecna

MAIN ACHIEVEMENTS 8

Government contracts and commercial activities

Trade fairs and conferences

Awards and recognition

PRODUCTS AND SERVICES 16

Government services

Verification of Conformity (VoC)

Commodities

Consumer goods

Laboratories

Trade finance services

Affiliations, accreditations and certifications

CORPORATE SOCIAL RESPONSIBILITY 26

Water, health and education

Corporate social responsability

CORPORATE GOVERNANCE 30

Business ethics and compliance

Internal control

Quality Management System

Group structure

Human resources

Worldwide presence

CONTENTS | 3

COTECNA | ANNUAL ACTIVITY REPORT 2012 | 4

INTERVIEW WITH THE CEO

INTERVIEW WITH ROBERT MASSEY,CEO OF COTECNA

INTERVIEW WITH THE CEO | 5

The past two years have been difficult for many businesses; how has Cotecna fared in this particular context?

It is true that the consequences of the crisis have

considerably slowed down the activities of many

companies over this period. However, the flexibility

and excellent responsiveness we derive from our

company’s family structure and human scale have

enabled us to remain stable and solid.

So you are achieving growth?

That’s right. Compared to 2011, the 2012 figures

show that profitability is substantially higher.

How should we interpret the economic indicators for 2013?

The level of international trade is having an impact

on our industry. Although China has been marking

time recently, we are once again seeing a recovery in

business activity, which is influencing the volume of

inspections. And of course, higher volumes means

more growth for our business.

« TO WIN CONTRACTS, YOU NEED IN-DEPTH

KNOWLEDGE OF THE MARKETS,

A PRESENCE ON THE GROUND,

AND KNOWLEDGE OF HOW TO WORK

WITH LOCAL EXPERTISE. »


So the outlook is generally good?

Absolutely. In fact we have signed several new con-

tracts, for example with the governments of Gabon

and El Salvador, which have called on our services

to support their processes of modernizing Customs

facilities and improving equipment. This means we

will create more than 200 local jobs and will provide

our expertise in operating scanners, a speciality that

has become one of the spearheads of our services.

Besides Gabon and El Salvador, are there any other developments in the pipeline?

The Verification of Conformity business is expanding

rapidly, which offers us opportunities for growth and

diversification. This is because new standards are

always being introduced, and emerging countries

increasingly need these types of services, to protect

consumers. This is where we have something to

offer, as well as strong credentials.

But it must be difficult to succeed in such a competitive environment?

To win contracts, first you need a level of visibility, a

good reputation and references. But you also need

in-depth knowledge of the markets, presence on the

ground, and knowledge of how to work with local

expertise. In this respect, Cotecna is particularly well

placed, and we are continuing to redeploy people in

different regions in order to provide solutions for

governments and for private customers. Being local

naturally makes it easier to do business.

INTERVIEW WITH THE CEO | 7

Are you pursuing a policy of growth?

Cotecna has always progressed in stages, and we

are careful to do this in a balanced way. But it is true

that today there are major opportunities in the field

of private commerce.

Have you put in place a specific strategy to develop the commercial sector?

In this domain, we have restructured our busi-

nesses and put in place a growth strategy. We

will also be concentrating more generally on the

inspection of agricultural products and consumer

goods. This strategy underpinned our activities

throughout 2012, and we are very pleased that it is

already bearing fruit.

You have been at the head of Cotecna for many years; does your enthusiasm ever wane?

Whatever profession you are in, I think the most

important thing is to always take pleasure in what

you do, and to never work on your own. Ours is a

great business, because we tackle very concrete

problems in teams, working closely with directors,

decision-makers and government representatives.

This means our impact on the ground is quantifi-

able, and the aim of our business is to continue to

improve quality of life for everyone. While we con-

tinue to evolve with the dynamism and pragmatism

that have made Cotecna so successful to date, the

source of my enthusiasm will never dry up.

MAIN ACHIEVEMENTS | 9

Following the signing of new contracts, Cotecna

plans to create more than 200 local jobs in

2013, particularly in El Salvador and Gabon.

ISO 17020The Cotecna Group is one of the few inspection companies to have received ISO/IEC 17020 accreditation on a worldwide scale, for all of its offices.

5 400As part of Brazil’s national strategy to boost its soybean production, Cotecna is the official inspector for all yields higher than 5 400 kg per hectare.200

Cotecna has been named « Best Collateral Management

Company » for the second year running, a title that

recognizes its role of supporting trade finance.N°1

15Cotecna will have

responsibility for the acquisition, installation

and operation of 15 scanners at eight

sites in El Salvador.

BEST COLLATERAL MANAGEMENT COMPANY

GOVERNMENT CONTRACTS AND COMMERCIAL ACTIVITIES


WORLDWIDE

Signing of a partnership with Orange for M2M solutions

Cotecna and Orange Business Services have

signed a partnership agreement to develop M2M

(Machine-to-Machine) solutions for communication

and geolocation, meaning the real-time and secure

monitoring and traceability of machines, equipment

and systems, particularly for transit monitoring. In

the wake of this agreement, in 2012 Cotecna pre-

sented its Cotrack® solution at an Orange Business

Live conference in Rome.

GABON

New Customs scanners

As part of the modernization of its Customs admin-

istration, the contract signed between the govern-

ment of Gabon and Cotecna relates to the supply and

operation of X-ray scanners for Owendo port and

Port-Gentil. The contract also covers the deploy-

ment of our risk management system (CRMS®) as

well as provisions for training.

NIGERIA

Extension of the Destination Inspection (DI) contract

The Destination Inspection contract, which has

been in place between Cotecna and the Nigerian

Customs Services since 2006, concluded at the

end of 2012. In light of the significant progress

this has enabled the administration to achieve,

particularly in terms of facilitating trade, fight-

ing fraud, protecting revenues and strengthen-

ing the Customs expertise of its personnel, the

Nigerian government extended the contract for

a period of six months.

A long-term contract to verify the conformity of imported goods

The Standards Organization of Nigeria (SONCAP)

has commissioned Cotecna, as well as three other

companies, to verify the conformity of imported

goods according to current best practice.

ZAMBIA

First contract for Cotecna

At the end of the year, Cotecna was commissioned by

the Zambia Revenue Authority to test seven scanners

recently acquired by the State, which are currently

being deployed on the country’s borders.


TOGO

Electronic monitoring system successfully implemented on six sites

To support the process of modernizing the Togo

Customs administration, Cotecna has put in place

an electronic monitoring system for goods in tran-

sit. This system strengthens and complements

Customs capacities in terms of the physical moni-

toring of goods, thereby boosting efforts to combat

fraud. It enables the tracking and surveillance of

vehicle movements in real time, from their point of

departure to their point of arrival.

EL SALVADOR

Non-intrusive inspection services contract

As part of its program to modernize its Customs,

El Salvador has selected Cotecna for the imple-

mentation and operation of non-intrusive inspec-

tion systems. The contract includes the purchase,

installation and operation of equipment, including

15 scanners, as well as civil works to be carried

out at eight inspection sites. To fulfil its mission,

Cotecna will employ and train nearly 150 local

personnel.

BRAZIL

Cotecna inspects high-yield soybean harvests

The purpose of Brazil’s Strategic Soybean Committee

(CESB) is to increase productivity and promote the

latest soybean cultivation technologies across the

country. The Committee, which for the past three

years has rewarded the best producers, has appointed

Cotecna as the official inspector for all yields greater

than 5 400 kg per hectare.

ECUADOR

Cotecna in charge of transit monitoring and traceability

Cotecna has been appointed by the National Customs

Service of Ecuador (SENAE) to monitor the traffic of

containers in transit in Ecuador in order to guarantee

their integrity, from their arrival in the country to

their final destination. Monitoring is carried out in

real time using an electronic seal that issues alerts

in case of intrusion or diversion.


COLOMBIA

Mineralogy laboratory opened

To meet the growing needs of the coal industry

in Colombia, Cotecna has opened a mineralogy

laboratory in Zipaquirá, specializing in the analysis

and quality control of metallurgical and thermal

coals, coke and minerals. The laboratory also offers

an online service as well as a unique coal mixture

analysis procedure.

IRAQ

Verification of conformity for imported goods

Officially appointed by the Central Organization

for Standardization and Quality Control (COSQC),

Cotecna manages the implementation of the

Verification of Conformity (VoC) program for

imported goods in Iraq. As part of this mission,

Cotecna carries out verifications and inspec-

tions at a number of border posts. It also issues

Certificates of Conformity (CoC) and Non-

Conformity Reports (NCR).

INDONESIA

Cotecna inspects Non-B3 imports

Cotecna has been officially appointed by KSO

Sucofindo-Surveyor Indonesia (KSO SCISI) to

handle the inspection of non-hazardous and

Non-toxic (non-B3) merchandise cargos imported

into Indonesia from Asia and the Middle East.

PHILIPPINES

Cotecna inspects raw materials for the World Food Program

The United Nations World Food Program (WFP)

supports the Philippine government and its

local authorities with the food needs of the popu-

lation. To facilitate its mission, the World Food

Program has commissioned Cotecna to inspect

and monitor raw materials in the country.


INDIA

Two calls for tenders won by Cotecna for cotton inspection

Cotecna has won two calls for tenders in India for

cotton inspection. The first contract, awarded by the

Cotton Corporation of India, is for the pre-shipment

supervision and inspection of cargos of cotton bales

at embarkation. The second, signed by the National

Agricultural Co-operative Marketing Federation of

India Ltd (NAFED), consists of weighing, testing

and sampling cotton production in the states of

Maharashtra, Gujarat and Andhra Pradesh.

THAILAND

Inspection of rice quality for a refugee camp

Cotecna has been chosen by the Border Consortium

to check the quality and quantity of rice distributed

at a refugee camp on the border between Thailand

and Burma. This service includes the disinfection

of rice by fumigation, as well as the verification of

the distribution of stocks in depots before their

delivery in containers.

A new laboratory specializing in wood analysis

The Group has opened a laboratory in Sri Racha

in Chonburi province, eastern Thailand, for the

analysis of eucalyptus wood chips for the paper and

biofuel industry in Asia. Its mission is to check the

quality of wood and supply fumigation, sampling

and stock inspection services.


WORLDWIDE

Commodities conferences

The Global Grain conferences are held every year

for professionals around the world involved in the

grain and oilseed industry. They are an opportu-

nity to meet experts and country representatives,

to check the state of markets and trends, and to

meet customers, buyers and sellers. Cotecna

was represented at the Global Grain conferences

in Singapore and Switzerland (Geneva), and in Bali

as the co-sponsor of the World Rice Conference.

Conferences on trade finance

As a world-renowned expert in trade finance,

Cotecna is often invited to take part in major confer-

ences. In 2012, our company was represented on the

panel at the Euromoney Trade Finance conference

in Switzerland (Geneva) and at the Exporta Supply

Chain Finance conference in the Netherlands

(Amsterdam). Cotecna was also present as a

speaker at the Exporta Brazil & Latin America Trade

& Commodity Finance conference, and took part in

the Euromoney Trade and Commodity Finance in

Brazil (São Paulo).

SWITZERLAND

Soybean inspections in Brazil presented at the Global Commodities Forum

At the UNCTAD Global Commodities Forum held

at the Palais des Nations in Geneva, Cotecna Trade

Services SA presented a case study: Cotecna’s

inspection of soybean production as part of the

national productivity challenge launched by Brazil’s

Strategic Soybean Committee (CESB).

Cotecna at the Geneva School of Business Administration

As part of its training activities, Cotecna was invited

to give a lecture to students at the Haute École de

Gestion in Geneva on « The Role of Inspection in

International Commodity Trading ».

PORTUGAL

Sponsor of the Sea Market Seminar

The aim of the Sea Market Seminar, held in Porto in

2012, is to develop business opportunities and facili-

tate partnerships between businesses in the sector,

particularly Portuguese and French. Cotecna, the

event’s official sponsor, presented to a large num-

ber of leading figures its viewpoint on the facilitation

and safety of the flow of merchandise in ports.

Presence at the Portugal Exportador Forum

At the Portugal Exportador Forum, Cotecna pre-

sented to companies looking to develop or increase

business on international markets, its expertise

in exports as well as the tools that can be used to

develop their field of activity.

TRADE FAIRS AND CONFERENCES

AWARDS AND RECOGNITION


CHINA

Participation in Trade Fairs

At the end of the year, Cotecna took part in two of the

most important industry events in China: the Hong

Kong Electronics Fair and the China Import and

Export Fair in Canton. Cotecna’s presence at these

events was aimed at promoting its expertise in con-

sumer goods inspection and its government services.

INDIA

Vegetable oil industry trade fairs

In 2012, Cotecna took part in the conference organ-

ized by the Indian Oilseeds and Produce Export

Promotion Council (IOPEPC) on the promotion and

development of the export of oilseed products.

Cotecna also attended the international Globoil

India conference in Mumbai, the annual meeting

place for the vegetable oil trade and industry.

WORLDWIDE

Cotecna is named Best Collateral Management

Company for the second time

Credit organizations and trading firms rated

Cotecna as the Best Collateral Management

Company in Trade Finance magazine’s annual

ranking of the best companies in the sector, for

the second year running. This honor rewards the

quality of Cotecna’s work in trade finance as well

as its innovative approach.

GHANA

Cotecna’s subsidiary receives the Certificate of Merit

For the 60th anniversary of the World Customs

Organization (WCO), Ghana’s Customs services

awarded its Certificate of Merit to Gateway Services

Limited, Cotecna’s subsidiary in Ghana, as well as to

two other state bodies, for their exceptional services

rendered to the country’s administration. Cotecna

is the only inspection company to have obtained

this prize.

NIGERIA

Cotecna is popular with an industry body

At its 40th annual general meeting, the Manufacturers

Association of Nigeria presented Cotecna with an

award for the quality of its services. Cotecna’s col-

laboration with all Association members, as well as

its contribution to the country’s development and

industrial growth, were also recognized.

Cotecna’s expertise is recognized worldwide

by all players in government administrations,

Customs authorities and the commercial sector.

For the past 39 years, the company’s experience

in Testing, Inspection and Certifi cation (TIC) has

ensured contractual and regulatory conformity

for a wide range of commodities, including agri-

cultural products, metals and minerals, as well

as consumer goods and other merchandise.

The services supplied by Cotecna guarantee

Customs revenue based on the true value of the

goods, and make it easier to detect imports that

are prohibited, restricted or controlled. Cotecna

also facilitates lawful cross-border commercial

exchanges through the introduction of new

technologies and effi cient processing.

Working closely with Customs authorities,

Cotecna supplies IT solutions for assessment,

classifi cation and risk management, and pro-

vides training programs to ensure the quality

and eff ectiveness of services and personnel.

Cotecna also offers bespoke trade finance

services.

The company is constantly developing its net-

work of accredited testing laboratories around

the world, particularly in South America, Europe

and Asia.

Objectives - Facilitate world trade through tailor-made

solutions

- Speed up the Customs clearance process

- Ensure the application of the international

regulations and directives in force

- Secure and improve Customs revenues

- Capacity building for Customs authorities

through training and the transfer of skills and

technology

- Reduce the possibilities of fraud, tax evasion and

tariff discrimination

- Strengthen national security (ports, airports and

border crossings)

- Support the fight against international terrorism

- Protect consumers by ensuring the contractual

conformity of consumer goods

- Detect fraudulent or counterfeit merchandise

PRODUCTS AND SERVICES | 17

PRODUCTS AND SERVICES

DESTINATION INSPECTION (DI)Cotecna was the first company to offer Destination

Inspection services in 1999. Today, it is an

acknowledged leader in this field, offering tailor-

made solutions to help Customs’ capacity building

in the inspection of goods when they arrive in their

destination country.

Services - Physical inspection

- Non-intrusive inspection (scanner imaging)

- Computerized Risk Management System

(CRMS®)

- Document review

- Valuation of goods for payable duties and taxes

- Tariff classification

PRE-SHIPMENT INSPECTION (PSI)Since 1984, Cotecna has been supplying pre-ship-

ment inspection services on every continent. As one

of the leading players in the market for services to

governments, Cotecna offers customized solutions

to meet the special needs of Customs departments

and, in addition, contributes to the improvement of

Customs procedures.

Services

- Physical inspection

- Document review

- Valuation of goods for payable duties and taxes


SCANNER SERVICESCotecna was the first private sector company to

invest in scanner imaging technology for con-

tainer inspection services. This solution permits

non-intrusive inspection of freight, thus helping

to reduce port congestion while detecting fraud.

Our solutions are available within the framework

of a Public/Private Partnership (PPP) or technical

assistance and consultancy services.

Services - Build Operate Transfer (BOT) contracts

- Feasibility studies and consultancy

- Assistance with scanner purchase,

implementation, operation and maintenance

- Training and capacity building


ELECTRONIC TRANSIT MONITORING SYSTEM – COTRACK® Cotrack® is a remote monitoring solution devel-

oped by Cotecna to strengthen the capacity of

Customs to control transit traffic and to com-

bat fraud effectively, while at the same time

facilitating commercial exchanges. Cotrack®

is based on the use of leading edge technolo-

gies in terms of GPS, telecommunications and

information graphics.

Services - Technical feasibility services

- Implementation of control solutions during

transit operations


- Technical assistance and maintenance

COMPUTERIZED RISK MANAGEMENT SYSTEM (CRMS®)A perfect complement to Cotecna’s other services,

Computerized Risk Management System is an inno-

vative solution for analysing commercial operations

and recommending the appropriate level of Customs

intervention in relation to the fraud risk and the avail-

ability of human and material resources.

CRMS® uniquely combines random and selective cri-

teria with an econometric analysis and risk assess-

ment model. The system calculates the probability

of fraud by concentrating on the goods at risk, an

approach which speeds up the importation proce-

dure and encourages conformity.

Services - Feasibility studies

- Examination of Customs procedures connected

with risk management and scanners

- Establishment of risk management committees

- Establishment of national databases on fraud

- Adaptation of solutions to the context and the

Customs targets

- Deployment of solutions on a pilot site and

subsequently at national level

- Customs training



CUSTOMS VALUATION – VALUEQUEST®

ValueQuest® is a complete modular software

package allowing governments and Customs ser-

vices to verify the accuracy of the declared value

of the goods. Designed in close cooperation with

the Customs authorities, it helps them meet their

requirements with reference to the implementa-

tion of the WTO agreements on Customs valu-

tion. ValueQuest® is a solution which promotes the

transfer of skills in valuation and facilitates the fight

against commercial fraud.

Services - Building of a dedicated national valuation

database for Customs

- Customization of software applications to local

regulatory texts

- Training of users and capacity building


- Additional services for the verification of

transaction existence and enquiries

ELECTRONIC SINGLE WINDOW An average Customs transaction involves 20-30 dif-

ferent parties, 40 documents, 200 data elements

which are repeated at least 30 times and rekeying

of 60-70% of all data at least once.

Electronic Single Window Solutions from Cotecna

brings the entire international trading community

together in one single access point to accelerate and

secure the clearing process for goods.

Cotecna combines its operational expertise with

strong partnerships and solid technology suppliers.

Services - Feasibility studies

- Reengineering of processes and procedures

- Up to 100% financing in PPP (Public/Private

Partnership)

- Customization of the solutions to stakeholders

objectives and the local context

- Operation of Electronic Single Window solution



- Full transfer of the solutions in the frame of BOT

contracts


POST-CLEARANCE VERIFICATION (PCVS) Cotecna has developed a tailor-made set of services

for verification and capacity-building with the aim of

supporting the Customs authorities in their efforts to

apply the Kyoto convention and the SAFE standards

of the World Customs Organisation relating to risk

management and the facilitation of trade.

Cotecna’s post-clearance verification services are

based on our ValueQuest® software package, a com-

plete and customisable system to verify the accuracy

of the tariff position and declared value of the goods.

They also include CRMS®, our Computerized Risk

Management System, which analyses commercial

transactions in order to assign them an appropriate

level of intervention.

Services - Document check and investigation

- Analysis of Customs value for duties and taxes

payable


- Establishment of a transactional database

- Computerized Risk Management System

(CRMS®)

- Technical assistance

- Production of reports

VERIFICATION OF CONFORMITY (VOC)

Cotecna’s Verification of Conformity services help to

ensure that international trade products satisfy re-

commended international standards. In this way, the

company supports consumer protection by detect-

ing fraudulent goods and encouraging transparency

when issuing Certificates of Conformity.

Services - Document verification

- Physical inspection

- Sampling for laboratory analyses

- Laboratory conformity testing

- Drawing up Certificates of Conformity (CoC)

recognized in the destination country

- Conformity audits and assessments


COMMODITIESServices - Loading and discharge supervision operations

- Vessel hatch and hold inspection. Water tightness

- Ship certification validity

- Draft survey and tank gauging

- Supervision of weighing / tally control

- Visual control and report on condition

- Contractual sampling

- Sample preparation and sealing

- Laboratory testing and analyses

- Traceability and identity preservation

Agricultural products

Cotecna has a worldwide network of specialists

and laboratories at the disposal of shippers, trad-

ers and government organizations to assess the

quality, quantity and integrity of their products. The

company offers its services to every segment of the

market, from cereals to pulses via oilseeds, feed-

stuffs, liquid cargoes, sugar, fibers, fruits, coffee,

fertilizers and more.

Metals and minerals

Our on-site, independent inspection services for fer-

rous and non-ferrous metals, coal, ores and other

minerals, concentrates, and scrap metal help to pre-

serve the interests of our customers. Our analyses

make it possible to determine, among other things,

the properties of products, their tolerance of humid-

ity and their particle size distribution.

Full Outturn Guarantee (FOG)

In partnership with first class insurers, Cotecna pro-

vides customers with a guarantee against the pos-

sible shortage of goods which may occur between

their loading in the point of origin and unloading at

destination. The customer is compensated if a dif-

ference should occur.


CONSUMER GOODS Services - Raw material quality control

- Initial production inspection

- During production inspection

- Final random inspection

- Pre-shipment inspection

- Loading supervision

- Factory audit and social audits

- Laboratory testing

- Product conformity testing

Manufactured products

By offering a full range of services including product

inspection, process evaluation and technical assis-

tance, the Cotecna network of experts ensures that

the product conforms with the customer’s specifi-

cation, or the standards in force, and that it can be

used in complete safety.

www.cotecna-inspection.com

Cotecna has developed a sophisticated and user-

friendly website guiding customers through all steps

of inspection for consumer goods. Customers can

order inspections directly on-line.

LABORATORIESCotecna has a global network of laboratories cer-

tified to national and international standards that

offer testing services for grains, cereal products,

feedstuffs, vegetable oils and consumer goods such

as toys.

We also provide quality certificates on the basis of

the results presented by independent and accred-

ited laboratories (e.g. Gafta and FOSFA for agricul-

tural products).

TRADE FINANCE SERVICES Cotecna’s mission in the field of trade finance ser-

vices is to assist borrowers and lenders in set-

ting up cost effective yet solid, Basle II compliant

financing structures. Services include the moni-

toring of the collateral at any stage of the financed

transactions, local custody and handling of titles

or other documentation related to the goods, and

other specific interventions.


INFORMATION TECHNOLOGIES

Vestalis®

Vestalis® is an in-house web based application

developed by Cotecna to serve the customer in the

Trade Finance Services sector allowing borrowers

and banks access to their contracts in real time.

The access is secured by a personal password and

login and communications are encrypted.

E-dox®

Cotecna has developed E-dox®, a state-of-the-art

solution to issue e-documents that are fully compli-

ant with eUCP600 requirements. The E-dox® solu-

tion enables the transmission of e-certificates by

email instead of the traditional paper certificates,

and significantly speeds up and secures the process

of transmitting such documents.

AFFILIATIONS, ACCREDITATIONS AND CERTIFICATIONS The Cotecna group and its subsidiaries are certified

and/or officially accredited by national and interna-

tional organizations. This guarantees professional

standards practiced by each entity in the Group, in

the fields of inspection, testing and the verification

of systems management.

Cotecna is also a member of the International

Federation of Inspection Agencies (IFIA), whose

mission is to examine and improve the methods,

standards, safety procedures and rules used

by its members to benefit themselves and their

customers.

Many Cotecna entities are individual members of

bodies guaranteeing compliance with trade stand-

ards in specific fields. These bodies include IFIA,

FOFSA, Gafta, IFA and SAL.

ISO/IEC 17020

Cotecna is one of the few companies in the TIC

industry to benefit from ISO/IEC 17020:1998 world-

wide accreditation for its Verification of Conformity

(VoC) ser vice. Issued by the United Kingdom

Accreditation Service (UKAS), this quality label

covers all the company’s inspection structures. It is

an acknowledgement of Cotecna’s capacity to evalu-

ate the conformity of products in relation to a set of

defined criteria, whether national or international

standards, or the particular conditions stipulated

by individual companies. The Quality Management

System of this standard is assured by four regional

offices – Buenos Aires, Dubai, Singapore and

Geneva – all under the direct supervision of the

Group’s head office. Furthermore, some offices

have received individual ISO/IEC 17020 accreditation

for their national service. Cotecna’s Shanghai office

is the latest to have been awarded this certification.


ISO/IEC Guide 65

Our Dubai office received ISO/IEC 65:2005 accredi-

tation from the Emirates National Accreditation

System (ENAS). It is now recognized as a certification

body working to regional and international standards

on specific products and merchandise.

Gafta, FOSFA and ISO/IEC 17025

Our international network of laboratories is certified

to national and/or international standards: Gafta and

FOSFA for laboratories specializing in the testing of

agricultural products, and ISO/IEC 17025:2005 for

those carrying out tests on other raw materials. The

most recently accredited laboratories in this field are

Santos and Paranaguá in Brazil, Rostov in Russia

and Chennai in India.

National accreditations

Cotecna possesses many accreditations awarded

by national bodies for the inspection of agricultural

products, foodstuffs, consumer goods and indus-

trial products. For example, Cotecna is accredited

by SENASA in Argentina for the inspection and cer-

tification of cereal products destined for export.

Transparency International

Cotecna is a member of Transparency International

Switzerland (TI), a global civil society organization

leading the fight against corruption. It units peo-

ple through an international coalition that works to

end the devastating impact of corruption on men,

women and children around the world.


By supporting government agencies in the

control and monitoring of products and goods,

Cotecna makes an effective contribution to

the economic and social development of the

countries in which it conducts its activities,

particularly the developing countries.

While protecting tax and Customs revenues,

Cotecna simultaneously creates jobs and off ers

work to local suppliers. At the same time, our

company helps to maintain internal security

by preventing the importation of counterfeit

medicines, dangerous toys and illegal arms.

The use of modern processes further helps to

reduce the environmental impact and to assist

governments in achieving international targets

such as the Millennium Development Goals.

The social contributions made by Cotecna

extend far beyond the company’s commercial

activities and include many charitable actions.

The natural extension of a corporate philosophy

based on integrity, confi dentiality and transpar-

ency, its commitments are concentrated in the

fi elds of water, health and education. They are

also manifested as the occasion arises through

emergency aid in the event of natural disasters.

WATER, HEALTH AND EDUCATION

« AROUND THE WORLD, COTECNA

IS COMMITTED TO OFFERING COMMUNITIES,

IN COUNTRIES WHERE WE WORK,

A BETTER FUTURE. »

CORPORATE SOCIAL RESPONSIBILITY | 27

CORPORATE SOCIAL RESPONSABILITY

WORLDWIDE


COLOMBIA

ECUADOR

RUSSIA

CUBA

PHILIPPINES

JAPAN

HAITI

PAKISTAN

INDIA/NEPAL

BULGARIASWITZERLAND

Health WaterFood supplies Education

IN AFRICA

CORPORATE SOCIAL RESPONSIBILITY | 29

SENEGAL

TOGO

BENIN

NIGERIA

CONGO

ANGOLA

MADAGASCAR

NIGERMALI

BURKINA FASO

TANZANIA

RWANDA

BUSINESS ETHICS AND COMPLIANCE

Cotecna is committed to professional excellence.

As a company, we believe that our contractual

and business obligations can only be fulfi lled

through uncompromising dedication to our

customers’ requirements and by adopting the

highest professional and ethical standards in all

we do. This constitutes our business promise.

For this reason, Cotecna has implemented a

Business Ethics and Compliance programme

throughout its network of offices. At the heart of the

programme is the Business Ethics and Compliance

Code. The Code’s principles and rules apply to all

Group activities, and include standards for technical

and professional conduct in the following areas:

- Integrity

- Conflicts of interest

- Confidentiality

- Prevention of bribery

- Ethical marketing and fair competition

Most importantly, we place business ethics and com-

pliance above all commercial considerations. To

ensure the effectiveness of the implementation of our

Code, we subject our Business Ethics and Compliance

programme to an annual independent assessment

conducted by the company’s external auditors.

COMMITTEESThe Compliance Committee was established in

2004 and comprises a non-executive Chairmanship

held by one of the non-executive Board members,

the Company Compliance Officer and the Chief

Executive Officer, as well as management repre-

sentatives from the operational, legal, and human

resources departments.

The Compliance Committee conducts peri-

odic reviews of Cotecna’s Business Ethics and

Compliance Programme throughout the Group and

provides policy guidance to the Boards on com-

pliance-related matters. As part of its remit, the

Compliance Committee also reviews the appoint-

ment of business partners and key suppliers.

Regular reports on the activities of the Compliance

Committee, which met eight times in 2012, are sub-

mitted to the Boards of Directors.

Although there are currently no other committees,

the Boards may establish them on an ad hoc basis

for specific tasks, if and when it determines them

to be necessary.

The complete Cotecna Business Ethics and Compliance

Code can be viewed on our website at www.cotecna.comwww.cotecna.com

[email protected] – Helpline: +41 22 849 78 14

Issued by the Group Board of Directors – January 2010

INTEGRITYCONFLICTS OF

INTERESTCONFIDENTIALITY ANTI-BRIBERY FAIR MARKETING

BUSINESS ETHICS & COMPLIANCE PRINCIPLES

In all our activites we:

• Operate in a professional,

independent and impartial

manner

• Carry out our work honestly and

do not tolerate any deviation

from our approved methods and

procedures

• Ensure that where approved

test methods make provision

for tolerances in results, such

tolerances are not abused to alter

the actual test findings

• Report data, test results and

other material facts in good faith

and we do not improperly change

them

• Only issue reports and certificates

that correctly present the actual

findings, professional opinions or

results obtained

We avoid conflicts of interest:

• With any related entity in which

we have a financial or commercial

interest and to which we are

required to provide services

• Between Cotecna’s companies

and/or divisions engaged in

different activities but which may

be providing services to either the

same client or each other

• Between our employees’ interests

and those of Cotecna

We treat all information received in

the course of the provision of our

services as business confidential to

the extent that such information is

not:

• Already published

• Generally available to third parties

• In the public domain

We prohibit:

• The offer or acceptance of a bribe

in any form, including kickbacks

on any portion of a contract

payment

• The use of other routes or

channels for provision of

improper benefits to, or the

receipt of improper benefits from,

customers, agents, contractors,

suppliers or employees of any

such party or government officials

We only present Cotecna and

conduct marketing, including

comparisons with competitors or

their services, in a manner that is:

• Truthful

• Not deceptive

• Not misleading or likely to

mislead

CORPORATE GOVERNANCE | 31

INTERNALCONTROL

The Boards of Directors are responsible for the inter-

nal controls throughout the Group. These controls

are formalised in a documented Internal Control

System conforming to NAS 890 (Swiss Auditing

Standard) and are designed to give reasonable

assurance regarding the efficiency and effectiveness

of operations, the maintenance of proper accounting

records, the reliability of financial information and

compliance with applicable laws, regulations and

internal procedures.

The Boards’ internal control systems includes a

periodic risk analysis, a documented organizational

structure, defined authority limits for management,

the implementation of key controls throughout the

Group and the regular review of financial and opera-

tional information.

A dedicated Internal Audit function, reporting to the

Boards, conducts periodic financial and operational

audits throughout the Group. The Internal Audit

Manager communicates key results to the Boards of

Directors and detailed results to the Chief Executive

Officer, to the Executive management and to regional

and national management.


QUALITY MANAGEMENT SYSTEM

Cotecna has been certified ISO 9001

for 10 years!

The Cotecna Quality Management System

(QMS) and the Group Certifi cation Program were

introduced ten years ago. Since then, nearly all

offi ces affi liated to the Group have been certifi ed.

AUDITS CONDUCTED IN 2012 Our recent Group certification, ISO 9001:2008,

received in 2012, covers more than 40 of our affili-

ated companies throughout the world. Our QMS

audits comply not only with ISO 9001 but also with

the Compliance Code drawn up by the International

Federation of Inspection Agencies (IFIA), of which

Cotecna is a member.

In 2012, only the Bangkok entity (Thailand) obtained

this certification; the other main entities are already

certified. In addition, and likewise in terms of Group

certification, several affiliated entities have satis-

fied the terms of another audit: Cotonou (Benin),

London (UK), Dubai (United Arab Emirates), Durban

(South Africa), Alexandria (Egypt), and Moscow and

Rostov (Russia).

In 2012, a number of quality managers and qual-

ity representatives successfully completed the IRCA

Lead Auditor course. Improvements were made in

the internal systems for the exchange of knowledge

and information between Group quality managers

and staff worldwide.

ISO 9001 AND GAFTAIn terms of the Group’s ISO 9001:2008 certifica-

tion program, nine units in the Commercial division

fulfilled the ISO requirements, as well as two Gafta

rules, 123 and 124, covering monitoring, sampling

and weighing. These include Alexandria (Egypt) as

well as Moscow and Rostov (Russia). Three more of

our offices will be audited in 2013.

LOOKING AHEADIn 2013, the Group’s headquarters in Geneva will be

audited again in line with ISO 9001:2008, while other

offices in Africa, Asia, Europe and the Americas are

currently preparing for further audits as part of our

Group certification program.


GROUP STRUCTURE

Holding

Services for Governments

Services for theCommercial sector

COTECNA SACotecna SA is the Group’s Swiss, non-listed

holding company. The Group’s main operat-

ing companies are Cotecna Inspection SA and

Cotecna Trade Services SA and their subsidi-

ary companies.

Capital

Cotecna SA has a share capital of CHF 2 000 000

divided into 4 000 bearer shares of CHF 500 each.

Shareholders

All the company’s shares are held by members of

the Massey Family.

Remuneration

The remuneration of members of the Board is

determined by the Annual General Meeting of

Shareholders.

Company Financial Accounts

Consolidated Cotecna SA accounts are prepared

each year in accordance with International Financial

Reporting Standards (IFRS). The annual budget and

3-year plan are the outcome of an in-depth review

process, and monthly performance reviews are

undertaken by the management.

Auditors

Cotecna SA’s auditors are KPMG.

Board of Directors

Arlette Massey

Chairperson

Robert Massey

Director

Philippe Massey

Director

Georges Massey

Director

Claude Béglé

Non-Executive Director

Dan Kerpelman


Thierry de Loriol


The members of the Board are nominated by the

Annual General Meeting for a term of office of

one year.

The role of the Board of Cotecna SA is to ensure

the protection and development of the Cotecna SA

portfolio of investments, principally Cotecna

Inspection SA and Cotecna Trade Services SA and

their respective subsidiary companies.


Arlette Massey

Dan Kerpelman Thierry de Loriol

Claude Béglé Georges Massey

Philippe MasseyRobert Massey


COTECNA INSPECTION SACotecna Inspection SA is the Group’s main

operational subsidiary in the fi eld of government

services. Group Services are also placed under

Cotecna Inspection SA.

Board of Directors

Arlette Massey

Chairperson

Robert Massey

Director and Chief Executive Officer

Philippe Massey

Director

Claude Béglé


Thierry de Loriol


The Cotecna Inspection SA Board of Directors

focuses primarily on the strategic management of

the company’s institutional activities.

The members of the Board are nominated by

the Annual General Meeting for a term of office of

one year.

Chief Executive Officer

The Board of Directors delegates the operational

management of Cotecna Inspection SA to Robert

Massey, who has been Chief Executive Officer since

January 1993.

Cotecna Inspection’s ISO 9001:2008 Quality

Management Systems defines the Company’s oper-

ating framework.

Remuneration

The remuneration of members of the Board is

determined by the Annual General Meeting of

Shareholders.

Executive Committee at 31 December 2012

Robert Massey

Chief Executive Officer

Serge Depallens

Executive Vice President – Chief Financial Officer

Jean-Michel Caffin

Executive Vice President – Head of Global

Business Development

Haja Rajaonarivo

Senior Vice President – Human Resources

Didier Reymond

Executive Vice President – Contract Management

Tyrone Taylor

Executive Vice President – Contract Management


Group Services

Nicolas Billot

Senior Vice President – CITT (Information

Technology & Telecommunications)

Alison Bourgeois

Vice President – Corporate Communications

Antoine Chavan

Senior Vice President – Legal Department

Serge Depallens

Executive Vice President – Finance &

Administration

Pierre-Olivier Pellegrin

Senior Vice President – Security & Inspection

Technology

Adrian Walker

Group Compliance Officer – Compliance &

Internal Audit

COTECNA TRADE SERVICES SACotecna Trade Services SA is the principal sub-

sidiary of Cotecna SA focusing on commercial

activities, mainly for private customers.

Board of Directors

Robert Massey

President

Dan Kerpelman

Vice President

Philippe Massey

Director

The Quality Management System ISO 9001:2008 of

Cotecna Trade Services SA defines the company’s

operating framework.

Executive Committee at 31 December 2012

Serge Depallens

General Manager

Matthieu Delorme

Chief Operating Officer

Marc Hoffer

Vice President – Asia (since 7 January 2013)


COTECNA WORKFORCECotecna’s overall worldwide workforce remained

relatively stable in 2012. Fluctuations were mainly

due to contract developments and structural

changes in the company, which resulted in a slight

decrease in numbers. Reductions were notably due

to the ceasing of our scanners business in Peru. In

addition, reclassification of business in Africa led

us to remove several dozen posts from our payroll.

These declines were mostly offset by the growth

in our business in Asia and Eastern Europe, with

appointments of inspectors, laboratory specialists

and sales staff. New contracts in Gabon and El

Salvador, as well as the rapid growth of Cotecna

Trade Services, will lead to the creation of several

hundred posts throughout the Group in 2013.

EMPLOYEES AT 31 DECEMBER

2007 2 578

2008 2 754

2009 2 371

2010 2 255

2011 2 262

2012 2 233

EMPLOYEES BY GEOGRAPHICAL REGION AT 31 DECEMBER 2012

Geneva 99

Europe 217

Africa 1 113

Americas 363

Asia 383

Middle East 58

Total 2 233

COTECNA AGENTSCotecna has a worldwide network of around 1 500

agents and experienced representatives, often in

countries where the Group does not have sub-

sidiaries or joint venture partners. They have all

been carefully selected and work under continuous

control on the basis of methodologies, techniques

and procedures laid down by Cotecna, including

quality audits.

HUMAN RESOURCES


With over 100 offices established around the

world and a total workforce of more than 4 000

employees and agents, Cotecna can rightly call

itself an international company. 25 nationalities

are represented at the Group’s head offices in

Geneva, and this cultural diversity can also to be

found, in the field where the company attaches

high importance to skills development at the local

and regional levels.

Alongside these many different origins, languages

and cultures, Cotecna benefits from a wide range of

expertise. The company places great importance on

maintaining and developing these diverse skills by

aligning its training programs with its strategy, by

encouraging individual development, and by prepar-

ing the next generation to take up the challenges of

the TIC industry.

In 2012, Cotecna continued to strengthen the

links it maintains with its local entities, redeploy-

ing management skills by country and by region.

The aim is to get closer to the customer base, to

increase proactive responses to new demands

and to ensure ever closer cooperation between

head office and its partner companies. As part of

the Group’s drive for growth and consolidation,

the same movement has taken place in the com-

mercial department, in order to offer more local,

more responsive services and to be able rapidly to

meet the specific needs of customers. This decen-

tralization of skills, which has enabled Cotecna to

adapt to each region, also extends to the Group’s

IT systems, which ensure that day-to-day business

is handled efficiently, in real time.

WORLDWIDE PRESENCE


WORLDWIDE PRESENCE

AFRICAANGOLA↘ Luanda ↘ Cabinda ↘ Cunene/Santa

Clara ↘ Kuando-Kubango/

Katwitwi (2013)↘ Lobito ↘ Namibe

BENIN↘ Cotonou

BURKINA FASO↘ Ouagadougou

CHAD↘ N’djamena

CONGO↘ Pointe-Noire ↘ Brazzaville

GABON↘ Libreville

GHANA↘ Accra ↘ Takoradi↘ Tema

NIGER↘ Niamey ↘ Dan Issa ↘ Gaya ↘ Konni ↘ Magaria ↘ Maradi ↘ Matameye ↘ Torodi ↘ Zinder

NIGERIA↘ Lagos ↘ Abuja↘ Apapa↘ Banki ↘ Jibiya ↘ Kano ↘ Tincan Ashaye ↘ Tincan RoRo

SENEGAL↘ Dakar

SOUTH AFRICA

↘ Durban ↘ Johannesburg

TOGO

↘ Lome ↘ Cinkasse ↘ Kodjoviakope↘ Sanvee Kondji↘ Zongo

AMERICASARGENTINA

↘ Buenos Aires↘ San Lorenzo

BOLIVIA

↘ Santa Cruz

BRAZIL

↘ Sao Paulo ↘ Aratu ↘ Itacoatiara ↘ Paranaguá ↘ Rio Grande ↘ Santos ↘ Sao Francisco Do Sul↘ Vitória

COLOMBIA

↘ Santafe De Bogota ↘ Buenaventura↘ Cartagena↘ Medellín↘ Zipaquirá

ECUADOR

↘ Guayaquil ↘ Cuenca ↘ Esmeraldas ↘ Machala↘ Manta↘ Quito

EL SALVADOR

↘ San Salvador

UNITED STATES

↘ Houston

URUGUAY

↘ Nueva Palmira

ASIACHINA↘ Shanghai ↘ Beijing ↘ Guangzhou ↘ Qingdao

HONG KONG↘ Hong Kong

INDIA↘ Mumbai ↘ Chennai↘ Goa↘ Hyderabad↘ Indore↘ Joda/Barbil↘ Kakinada↘ Kandla↘ Kolkata↘ Krishnapatnam↘ Ludhiana↘ Mundra↘ New Delhi↘ Tuticorin↘ Visakhapatnam

INDONESIA↘ Jakarta

JAPAN↘ Tokyo

PHILIPPINES↘ Makati City

SINGAPORE↘ Singapore

SOUTH KOREA↘ Seoul

THAILAND↘ Bangkok↘ Sri Racha

VIET NAM↘ Ho Chi Minh City

EUROPEFRANCE↘ Orvault ↘ Rouen

GERMANY↘ Düsseldorf

ITALY↘ Milan

KAZAKHSTAN↘ Astana

PORTUGAL↘ Porto

RUSSIAN

FEDERATION↘ Moscow↘ Astrakhan↘ Azov↘ Makhachkala ↘ Murmansk↘ Nakhodka↘ Novorossiysk↘ Rostov-On-Don↘ Saint-Petersburg↘ Taganrog↘ Taman↘ Tuapse↘ Vladivostok↘ Volgograd ↘ Vyborg↘ Yeisk

SPAIN↘ Barcelona↘ Tarragona

SWITZERLAND↘ Geneva

TURKEY↘ Istanbul ↘ Gemlik↘ Iskenderun↘ Izmir ↘ Mersin

UKRAINE↘ Odessa

UNITED KINGDOM↘ Hounslow

MIDDLE EASTEGYPT ↘ Alexandria ↘ Cairo

IRAQ↘ Baghdad↘ Abu Folos↘ Al Waleed↘ Khour El Zobair↘ Maakal↘ Monzareya↘ Rabiaa↘ Safwan↘ Shalamja↘ Sheeb↘ Tribeel↘ Um Qasar↘ Zerbatya

JORDAN↘ Amman

SAUDI ARABIA↘ Al Khobar

UNITED ARAB

EMIRATES↘ Dubai↘ Abu Dhabi

Cotecna SA

Rue de la Terrassière 58P.O. Box 6155, 1211 Geneva 6

SwitzerlandTel. +41 22 849 69 00Fax +41 22 849 69 89

[email protected]

Cotecna Corporate CommunicationsApril 2013 – [email protected]

Content, concept & design by blossom communicationwww.blossom-com.ch

Photo creditsCotecna (pages 11, 12, 19)

11mm (pages 2, 13)Oliver O’Hanlon (pages 5, 6, 7, 35)

iStockphoto (pages 8, 16, 20, 22, 30)Fotolia (page 26)

Marc Roger (page 32)Raphael Olivier (pages 17, 33)

Gateway Services Limited (pages 15, 21)Mike Omoruyi - Bolamik Ventures (page 18)

www.cotecna.com

Cotecna Annual Activity Report 2012

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