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Portrait of
the Interroll Group

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Interroll is one of the world‘s leading manufacturers of key products for unitrservices, distribution and in various segments of industry. The products includeaused primarily within the area of food processing, airport logistics, postalleload handling systems, internal logistics and automation. These solutions areueasy-to-integrate drive solutions such as drum motors for belt conveyors, DC-nnpowered and non-powered rollers for conveyor systems; energy-efficient flowastorage modules for compact pallet/container racking systems in distributionlcentres; crossbelt sorters, belt curves and other user-friendly conveyor modulesolfor cost-efficient material flow systems. Interroll serves more than 23,000 custo-rmers, mainly regional plant manufacturers and engineering specialists as weller

as system integrators, multinational companies and users. Interroll has 1,500

I

n

t

employees working in 28 companies and is listed on the SIX Swiss Exchange.

Conveying

Storage

Distribution

Managed by a strategic holding company based in Sant’Antonino, Switzerland, the group operates with two business divisions: “Global Sales & Service”
markets and distributes the full range of Interroll products according to
specified customer needs, while “Products & Technology” oversees the global
Centres of Excellence and other production sites, with responsibilities ranging from R&D, Product Management and Strategic Purchasing to Production
Technology and Manufacturing.

The key figures of the Interroll Group are presented at the inside of thisfront cover. The detailed financial report starts on page 57.

www.interroll.com · www.interroll.com/ir (Investor Relations)

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1

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Portrait of
the Interroll Group

0

o

r

t

a

p

Interroll is one of the world‘s leading manufacturers of key products for unitrservices, distribution and in various segments of industry. The products includeaused primarily within the area of food processing, airport logistics, postalleload handling systems, internal logistics and automation. These solutions areueasy-to-integrate drive solutions such as drum motors for belt conveyors, DC-nnpowered and non-powered rollers for conveyor systems; energy-efficient flowastorage modules for compact pallet/container racking systems in distributionlcentres; crossbelt sorters, belt curves and other user-friendly conveyor modulesolfor cost-efficient material flow systems. Interroll serves more than 23,000 custo-rmers, mainly regional plant manufacturers and engineering specialists as weller

as system integrators, multinational companies and users. Interroll has 1,500

I

n

t

employees working in 28 companies and is listed on the SIX Swiss Exchange.

Conveying

Storage

Distribution

Managed by a strategic holding company based in Sant’Antonino, Switzerland, the group operates with two business divisions: “Global Sales & Service”
markets and distributes the full range of Interroll products according to
specified customer needs, while “Products & Technology” oversees the global
Centres of Excellence and other production sites, with responsibilities ranging from R&D, Product Management and Strategic Purchasing to Production
Technology and Manufacturing.

The key figures of the Interroll Group are presented at the inside of thisfront cover. The detailed financial report starts on page 57.

www.interroll.com · www.interroll.com/ir (Investor Relations)K e y F ig u r e s o f t h e I n t e r r o ll G r o u p
in CHF million, if not noted differently

2010

I n f o r m a ti o n f o r I n v e st o r s
2009

2008

2007

2006

The shares of Interroll Holding AG have been listed at the Swiss Exchange SIX since June 5th, 1997 (Investdata: INRN; Reuters;
INRN.S; Security number: 637,289).

Incoming orders/net sales
Total incoming orders

285.2

238.9

347.8

375.9

313.4

Net sales with third parties: Components

178.1

157.9

223.7

235.2

196.5

Net sales with third parties: Subsystems

105.0

76.1

134.2

135.6

115.5

Total net sales

283.1

234.0

357.9

370.9

312.0

Profitability
EBITDA

35.8

18.8

58.2

67.5

44.5

in % of net sales

12.6

8.0

16.3

18.2

14.3

EBITA

24.8

8.0

48.0

56.6

36.3

in % of net sales

8.8

3.4

13.4

15.3

11.6

EBIT

20.4

3.1

43.4

45.2

30.6

in % of net sales

7.2

1.3

12.1

12.2

9.8

Result

14.4

5.7

33.8

31.9

20.2

in % of net sales

5.1

2.4

9.5

8.6

6.5

2009

2010

2008

2007

2006

Interroll Holding Ltd.

Information on the Interroll share

Via Gorelle 3

Number of registered shares

854 000

854 000

854 000

854 000

854 000

Number of average outstanding shares

775 724

771 475

762 323780 715799 084

Tel. +41 91 850 25 25

Number of outstanding shares per (31.12.)

779 600

771 775

768 958

762 112796 692

Fax +41 91 850 25 05

6592 Sant’Antonino, Switzerland

www.interroll.com
Market price: highest

CHF

371

320

581

632

434

Market price: lowest

CHF

267

173

215

420

300

Market price: per year end

CHF

368

307

256

581

434

CHF million

286.89236.55196.85442.79345.76

Ratio

19.79

41.38

5.82

13.15

17.10

2007

2006

Market capitalization per 31.12.
P/E Ratiowww.interroll.com/ir (Investor Relations)Contact

Paul Zumbühl
CEOTel. +41 91 850 25 25
investor.relations@interroll.com

Cash Flow
Operating cash flow

18.7

20.4

41.9

68.5

39.8

in % of net sales

6.6

8.7

11.7

18.5

12.8

Free cash flow

–8.4

–6.0

18.6

42.7

–10.4

in % of net sales

–3.0

–2.6

5.2

11.5

–3.3

Total investments/capital expenditures

27.4

21.9

22.4

24.0

10.7

Balance sheet
Total assets
Goodwill in % of equity
Net financial assets (debts)

700

102.70 %600

68.92 %

500

215.7

236.8

255.1

224.5

35.14 %

400

7.3

8.3

7.9

9.2

12.3

1.35 %

300

–12.9

–4.2

4.4

–6.1

–19.9

– 32.43 %200

Gearing (net debts/equity)

0.10

0.03

–

0.05

0.17

0.69

0.20

–

0.09

0.50

Equity

127.5

133.0

130.7

124.9

114.6

Equity ratio (equity in % of assets)

60.3

61.7

55.2

49.0

51.0

Return on equity (in %)

11.1

4.3

26.5

26.7

18.9

– 66.22 %
2006

100
2007

2008

10.4

1.6

22.3

22.6

18.4

1 255

1 206

1 315

1 275

1 166

Net sales per employee (in thousands CHF)

226

194

272

291

268

Productivity (Added value/total personnel expenses)

1.98

1.66

2.21

2.14

1.96

2009

2010
2010

2009

2008

Impressum

Values per share (in CHF)
Par value as per year end

Other key figures

Average number of employees© Swissquote
136.49 %211.3

Indebtedness factor (net debts/cash flow)

RONA (Return on net assets, in %)Interroll Share Price (yellow curve) compared to SPI/SXGE (black curve)

Reduction of par value

10.00

15.00

20.00

30.50

37.50

–

5.00

5.00

10.50

7.00

Concept and coordination:
Interroll Holding Ltd., Investor Relations

Distribution out of reserves from capital contributions*

5.00

Earnings per average share outstanding

18.59

7.41

44.00

44.17

25.38

Layout/DTP:

Cash flow per average share outstanding

24.09

26.43

54.93

87.77

49.80

Victor Hotz AG, Corporate Publishing & Print, ­Steinhausen

Equity per share outstanding as per year end

163.49172.36170.01163.89143.82* The distribution out of reserves from capital contributions in the year under review is proposed by the Board of Directors for the annual general assembly of May 13th, 2011.

This annual report is also available in German.
The German version is binding.

K e y F ig u r e s o f t h e I n t e r r o ll G r o u p
in CHF million, if not noted differently

2010

I n f o r m a ti o n f o r I n v e st o r s
2009

2008

2007

2006

The shares of Interroll Holding AG have been listed at the Swiss Exchange SIX since June 5th, 1997 (Investdata: INRN; Reuters;
INRN.S; Security number: 637,289).

Incoming orders/net sales
Total incoming orders

285.2

238.9

347.8

375.9

313.4

Net sales with third parties: Components

178.1

157.9

223.7

235.2

196.5

Net sales with third parties: Subsystems

105.0

76.1

134.2

135.6

115.5

Total net sales

283.1

234.0

357.9

370.9

312.0

Profitability
EBITDA

35.8

18.8

58.2

67.5

44.5

in % of net sales

12.6

8.0

16.3

18.2

14.3

EBITA

24.8

8.0

48.0

56.6

36.3

in % of net sales

8.8

3.4

13.4

15.3

11.6

EBIT

20.4

3.1

43.4

45.2

30.6

in % of net sales

7.2

1.3

12.1

12.2

9.8

Result

14.4

5.7

33.8

31.9

20.2

in % of net sales

5.1

2.4

9.5

8.6

6.5

2009

2010

2008

2007

2006

Interroll Holding Ltd.

Information on the Interroll share

Via Gorelle 3

Number of registered shares

854 000

854 000

854 000

854 000

854 000

Number of average outstanding shares

775 724

771 475

762 323780 715799 084

Tel. +41 91 850 25 25

Number of outstanding shares per (31.12.)

779 600

771 775

768 958

762 112796 692

Fax +41 91 850 25 05

6592 Sant’Antonino, Switzerland

www.interroll.com
Market price: highest

CHF

371

320

581

632

434

Market price: lowest

CHF

267

173

215

420

300

Market price: per year end

CHF

368

307

256

581

434

CHF million

286.89236.55196.85442.79345.76

Ratio

19.79

41.38

5.82

13.15

17.10

2007

2006

Market capitalization per 31.12.
P/E Ratiowww.interroll.com/ir (Investor Relations)Contact

Paul Zumbühl
CEOTel. +41 91 850 25 25
investor.relations@interroll.com

Cash Flow
Operating cash flow

18.7

20.4

41.9

68.5

39.8

in % of net sales

6.6

8.7

11.7

18.5

12.8

Free cash flow

–8.4

–6.0

18.6

42.7

–10.4

in % of net sales

–3.0

–2.6

5.2

11.5

–3.3

Total investments/capital expenditures

27.4

21.9

22.4

24.0

10.7

Balance sheet
Total assets
Goodwill in % of equity
Net financial assets (debts)

700

102.70 %600

68.92 %

500

215.7

236.8

255.1

224.5

35.14 %

400

7.3

8.3

7.9

9.2

12.3

1.35 %

300

–12.9

–4.2

4.4

–6.1

–19.9

– 32.43 %200

Gearing (net debts/equity)

0.10

0.03

–

0.05

0.17

0.69

0.20

–

0.09

0.50

Equity

127.5

133.0

130.7

124.9

114.6

Equity ratio (equity in % of assets)

60.3

61.7

55.2

49.0

51.0

Return on equity (in %)

11.1

4.3

26.5

26.7

18.9

– 66.22 %
2006

100
2007

2008

10.4

1.6

22.3

22.6

18.4

1 255

1 206

1 315

1 275

1 166

Net sales per employee (in thousands CHF)

226

194

272

291

268

Productivity (Added value/total personnel expenses)

1.98

1.66

2.21

2.14

1.96

2009

2010
2010

2009

2008

Impressum

Values per share (in CHF)
Par value as per year end

Other key figures

Average number of employees© Swissquote
136.49 %211.3

Indebtedness factor (net debts/cash flow)

RONA (Return on net assets, in %)Interroll Share Price (yellow curve) compared to SPI/SXGE (black curve)

Reduction of par value

10.00

15.00

20.00

30.50

37.50

–

5.00

5.00

10.50

7.00

Concept and coordination:
Interroll Holding Ltd., Investor Relations

Distribution out of reserves from capital contributions*

5.00

Earnings per average share outstanding

18.59

7.41

44.00

44.17

25.38

Layout/DTP:

Cash flow per average share outstanding

24.09

26.43

54.93

87.77

49.80

Victor Hotz AG, Corporate Publishing & Print, ­Steinhausen

Equity per share outstanding as per year end

163.49172.36170.01163.89143.82* The distribution out of reserves from capital contributions in the year under review is proposed by the Board of Directors for the annual general assembly of May 13th, 2011.

This annual report is also available in German.
The German version is binding.

C o n t e n t scontents
Highlights 2010

3

Report by the Board of Directors and Group Management

5

Review of the financial year

9

Goals and strategy of the Interroll Group

16

Market segments

18

Innovation

21

Sustainability

24

Staff

27

Interroll products – What our customers say

30

Corporate Governance

37

Financial report of Interroll Group

57

Consolidated financial statements of Interroll60

Financial statements of Interroll Holding Ltd.

123

1

2

H i g h l i g h t s

2 0 1 0Highlights 2010
January		Interroll draws up measures aimed at unlocking additional market potential for future
growth and realigning the Group’s global sales organisation.
February		In the UK, the British Airport Authority specifies Interroll’s Belt Curve as a standard
baggage handling component to be used at British airports.
March		Committed to expanding its market activities in the Americas, Interroll relocates its
US operations in Jeffersonville, IN, to a new production centre.
April		Interroll decides on a significant increase in its production capacity in China andplans to open a new facility in the first half of 2011.
May		The European Hygienic Engineering & Design Group (EHEDG) grants certification to
the new sensorless Synchronous Drum Motor for food manufacturing applications.
June		Interroll secures its largest ever US sorter contract from one of North America’s premier postal companies.
July		Interroll launches its global programme aimed at realigning the Group’s sales organisation.
August		Interroll posts encouraging results for the first half of 2010.
September	At the Motek trade fair in Stuttgart (Germany), Interroll unveils its intelligent drive concept for roller conveyors with zero-pressure accumulation – Interroll RollerDrive
EC310.
October		Interroll celebrates the grand opening of its new Centre of Excellence for Conveyor
Modules and Subsystems in Sinsheim (Germany, near Heidelberg).
November	With a view to expanding its market share in Australia, Interroll signs a deal with its
long-standing Australian licence partner to acquire the company’s local business
operations effective from January 2011.
December	The new Driver modules for RollerDrives are nominated for the coveted iF Product
Design Award 2011.

3

EFFICIENCY“Before you can inspire people

to build a ship you must first stoket h e i r d e s i r e f o r t h e s e a .” *Nothing is as stimulating as theenthusiasm for an idea. It is
the lifeblood of innovation;
it sets us free from theshackles of mediocrity;
it encourages us to tread
new paths, broaden our
horizons and unleash the

I n s p i r e d

p o w e r o f c r e a t i v i t y. F o re ff i c i e n cy

products designed to shape thew o r l d o f i n t r a l o g i s t i c s – t o d a y,tomorrow and beyond. Our new
slogan captures the spirit of renewalt h a t l i e s a t t h e h e a r t o f o u r c o m p a n y.
We stand for commitment, motivationand excellence. These are the values
that define us and will continue todrive us well into the future.

* after Antoine de Saint-Exupéry

4b yR e p o r t

b y

t h e
B o a r do f
D i r e c t o r s
a n d
G r o u p
M a n a g e m e n t

R e p or t b y t h e B o a r d of D i r e c t or s
a n d Gro u p M a n a g e m e n t
Dear Shareholders and Business Associates,
Operating against the backdrop of a challenging business environment, Interroll developed wellduring the 2010 financial year. Despite continuing turbulence within the financial markets, theeconomy gradually recovered over the course of the second
half of 2010. At the same time, the price of commodities such as
steel and technopolymers began to spiral upwards again.
In brief

In the period under review, sales revenue generat-Interroll can look back on an encour-ed by the Interroll Group rose by 27.5 % in local

aging financial year. Sales revenue
increased by 21 % year on year tocurrency. Expressed in the currency of consolidation,

CHF 283.1 million, while net profit surged

revenue was up 21.0 % from CHF 234.0 million tofrom CHF 5.7 million to CHF 14.4 million.

CHF 283.1 million. The foreign currency loss of 6.5 %is attributable primarily to the euro. Incoming orders

developed in line with sales revenue, and Interroll captured additional market share on all continents.

Kurt Rudolf
Chairman of the Board of Directors

Built on solid financial foundations and committed to a sustainableapproach to business, Interroll pressed ahead with its strategic
projects in the period under review. In doing so, the company
reached a number of milestones that will support healthy growthwell into the future. In particular, this applies to the realignmentof our sales organisation, the establishment or expansion of thecompany’s Centres of Excellence, the strengthening of ourglobal network and ongoing efforts in the area of research anddevelopment.
Sales organisation: focusing on growth
In the financial year under review Interroll took on the task of realigning its sales organisation (cf. Corporate Governance, page

Paul Zumbühl
Chief Executive Officer37), the aim being to unlock the potential for future growth to thegreatest extent possible and take advantage of the structural changes witnessed within the market. These measures will significantly enhance customer value. System integrators, plant manufacturers and users alike will benefit from one-stop access to Interroll’s entire range of key intralogistics products. These products are destined primarily for growth markets such as food processing,
airport logistics, postal services, distribution and industrial manufacturing. Customers are offeredeasy-to-integrate, plug-and-play products for all primary interfaces within the area of internal logistics: solutions delivered under the Interroll brand. As a result of our restructuring efforts, the degreeof market penetration of our entire product portfolio will be visibly improved and the level of productivity within our global sales network will be raised by a significant margin. Additionally, Interroll
will become more accessible to customers.
5

R e p o r t
b y t h e
B o a r do f
a n d
G r o u p
M a n a g e m e n t

D i r e c t o r s

The new global sales platform with its sales and service enterprises is to be managed by theGroup’s “Global Sales & Service” division. As a second Group division, “Products & Technology”
brings together Interroll’s Centres of Excellence and production facilities worldwide; this area
will be responsible for research and development, product management, strategic purchasing,production technology and local manufacturing.
The new organisational structure will replace that centred around business units, which were introduced at the beginning of 2001 (cf. Corporate Governance, page 40). At the time, Interroll
established global product platforms for the purpose of raising productivity levels and improving
customer value. In 2003, Interroll sold its Bulk Handling unit in order to focus entirely on conveyor
technology for internal unit-load handling. Measures aimed at focusing the company’s products
and competences as well as efforts to set up a global network were essential prerequisites for the
next phase of corporate development. The programme of realignment (see page 53) initiated in2010 will be implemented on a step-by-step basis by the end of 2011.
Production: new infrastructure, improved productivity
In the financial year under review Interroll continued to expand its production in Europe, the Americas and Asia, the overriding objective being to boost productivity, shorten the turnaround time forlarge-scale projects and introduce additional capacity for future growth.
In October 2010, Interroll opened its new Global Centre of Excellence for conveyor modules andsubsystems in Sinsheim (Germany, near Heidelberg). The newly created centre brings together
the company’s full range of expertise relating to Crossbelt Sorters, Belt Curves, Roller/Belt Conveyors and other modules used as key products in unit-load conveyor systems around the globe.
The Interroll facility, which occupies a 42,700 square metres site, is the first to be established at
the newly developed Sinsheim-Süd business park. At the official opening ceremony, Heribert
Rech, Minister of the Interior of Baden-Württemberg, applauded the courage displayed by Interroll
in investing in a new plant at the height of the worst economic crisis since the end of the Second
World War.
In the United States, too, Interroll relocated to new production premises. In addition to meeting thecompany’s operational requirements, the new facility in Jeffersonville, Indiana, will allow Interroll
to position itself even more successfully with an extended range of products “manufactured in the
USA”.
Interroll also expanded its infrastructure in Asia during the period under review. Interroll Thailand
relocated to a new production facility in 2010, and Interroll China will follow suit during 2011.
The enterprise in Suzhou, to the west of Shanghai, will move to a larger, 10,000+ square metresproduction centre within the same business park. In taking this step, Interroll will be better
placed to satisfy the surge in demand for interal logistics solutions in Asia.

6

R e p o r t

b y

t h e
B o a r do f
D i r e c t o r s
a n d
G r o u p
M a n a g e m e n t

Networks: building on our global strength
In order to improve market penetration in Australia, Interroll negotiated an agreement with its local
licence partner to take over this company’s business activities effective from the beginning of
2011. Additionally, Interroll made preparations for market entry in Turkey and Indonesia, the aim
being to establish its own local sales offices in 2011.
Other measures aimed at strengthening the company’s global network included the introduction ofextensive sales collateral in several additional languages. As a result, Interroll’s sales material is
now available in ten languages. Additionally, the company showcased its product portfolio at morethan twenty trade fairs worldwide. We also conducted intensive staff training in 2010, the focus
being on preparing the team for the new sales organisation and coordinating our customer communications.
Next-generation products
Our centre for research and development in Wassenberg (Germany) made significant progresswith regard to projects in the development pipeline. In the period under review, the Interroll Research Centre (IRC) rolled out a state-of-the-art Driver to complement the Synchronous Drum Motor launched in 2009 as a world premiere. Working in close collaboration with a major customer,
the IRC developed a compact, fully protected unit that makes the Synchronous Drum Motor a truly
versatile drive solution for conveyor belt systems.
In 2010, Interroll also launched its EC310 RollerDrive. The powered roller, control module and power
supply have been brought together to form an intelligent unit that can be used in modular
solutions for customised conveyor and assembly lines. Owing to its streamlined design, integrated
control technology and perfectly coordinated functionality, the EC310 can be fitted seamlessly
to new or existing handling systems. In 2010, the new control modules to be used in combination
with Interroll’s RollerDrives were nominated for the acclaimed iF Product Design Award for 2011.
Other product developments included modules for dynamic pallet flow storage systems.
Distribution out of reserves from capital contributions
In view of the financial stability of the company and the encouraging results achieved, the Board of
Directors will propose to the Annual General Meeting of Shareholders on 13 May 2011 a distribution out of reserves from capital contribution of CHF 5.00 per registered Interroll share. This distribution (instead of a dividend) is usually tax exempt.
Thank you to the Interroll team
We would like to thank all our members of staff around the globe. Our encouraging performancein the year under review was a testament to their committed contribution. Operating in a rapidlychanging business environment, our team made a significant effort to implement those measuresthat form an integral part of the company’s long-term objectives. In addition to performing
duties attributable to day-to-day business, staff members had to take on several major projects
such as the establishment or expansion of production centres.

7R e p o r t
b y t h e
B o a r do f
a n d
G r o u p
M a n a g e m e n t

D i r e c t o r s

OutlookWith economic conditions likely to remain volatile, Interroll is cautiously optimistic when it comes to
its business performance in the immediate future. Developments within the procurement markets
point to a further surge in commodity prices. At the same time, the imbalances seen between therespective economies have resulted in foreign exchange fluctuations. As a consequence, wehave seen continued pressure being exerted on investment spending in the area of internal logistics.
As a financially sound enterprise with a new organisational structure and best-in-market products, we will be looking to unlock long-term market potential on a continual basis. At the heart ofour growth strategy for the future are high-end solutions tailored to the requirements of resourcefriendly intralogistics. Furthermore, our global network will provide us with the launch pad needed
to seize unfolding market opportunities in emerging economies such as China, India and Brazil.

			Kurt Rudolf								 Paul Zumbühl
Chairman of the Board of Directors				Chief Executive Officer8R e v i e w

o f

t h e

f i n a n c i a ly e a rR e v i e w of t h e f i n a n c i a l y e a r
SalesInterroll can look back on an encouraging financial year. Operating within a challenging economic
climate, our company recorded a solid performance in 2010. Despite the continuing turbulence
within the financial markets, the economy picked up over the course of the second half of 2010. At
the same time, commodity prices – e.g. for steel and technopolymers – spiralled upwards in linewith economic recovery. Owing to improved productivity levels and a consistent system of procurement management applied at a global level, Interroll was largely able to neutralise the effectsof surging material prices.
In brief

In local currency, sales for the Interroll Group rose by 27.5 % in the financial year un-

Additional market share in all

der review. Expressed in the currency of consolidation, Group sales increased fromregions – Net profit almost trebles –Solid financial base

CHF 234.0 million to CHF 283.1 million, up 21.0 % or CHF 49.1 million year on year.
The foreign currency loss of 6.5 % is attributable primarily to the euro. The propensity

to invest in logistical equipment and systems was again adversely affected by foreign exchange
fluctuations as a result of the imbalances between the various economies. Order intake developedin line with sales revenue.
Interroll managed to secure market growth in all regions covered by the Group. Within this context,
the upward trend was also supported by new product launches. Sales in North America (+32 %)and Asia (+45 %) showed above-average growth. In North America, Interroll managed to expand
its market share primarily by attracting additional customers and establishing new sales channels.
Business in Europe saw a return to stability despite the weakness of the euro and tentative investment spending. Here, sales expressed in local currency rose by a respectable 20 %.
EBITDA, EBIT and net profit
Earnings before interest, taxes, depreciation and amortisation (EBITDA) almost doubled year on
year to CHF 35.8 million (2009: CHF 18.8 million). Earnings before interest and taxes (EBIT)
also rose sharply from CHF 3.1 million to CHF 20.4 million, a trend that was mirrored by net profit,
which almost trebled from CHF 5.7 million to CHF 14.4 million.

9

R e v i e w

o f

t h e

f i n a n c i a ly e a rNet sales Interroll Group in CHF million
0

100

200

300

400

2007

370.9

2008

357.9

2009

234.0

2010

283.1

EBITDA in CHF million
0

20

40

60

80

2007

67.5

2008

58.2

2009

18.8

2010

35.8

EBITDA in % of net sales
0

5

10

15

20

2007

18.2

2008

16.3

2009

8.0

2010

12.6

EBIT in CHF million
0

12

24

36

48

2007

45.2

2008

43.4

2009

3.1

2010

20.4

EBIT in % of net sales
0

10

5

10

15

20

2007

12.2

2008

12.1

2009

1.3

2010

7.2

R e v i e w

o f

t h e

f i n a n c i a ly e a rResult in CHF million
0

10

20

30

40

2007

31.9

2008

33.8

2009

5.7

2010

14.4

Operating cash flow in CHF million
0

20

40

60

80

2007

68.5

2008

41.9

2009

20.4

2010

18.7

Return on equity in %
0

10

20

30

40

2007

26.7

2008

26.5

2009

4.3

2010

11.1

Ordinary capital expenditure in CHF million
0

10

20

30

40

2007

24.0

2008

22.4

2009

22.9

2010

27.4

Indebtedness factor (net debts/operating cash flow)
–1

0

1

2

3		

2007

0.09

2008

–

2009

0.20

2010

0.62

11

R e v i e w

o f

t h e

f i n a n c i a ly e a rFinancial position and capital expenditure
At the end of December 2010, total assets stood at CHF 211.3 million (year-end 2009: CHF
215.7 million), while the equity ratio reached a solid 60.3 %. Investments (e.g. in new production
equipment and in SAP) amounted to CHF 27.4 million in the period under review. Net debt
rose from CHF 4.2 million to CHF 12.9 million due to the rise in current assets following the growthin sales and ongoing investment projects. Compared to the previous financial year, cash flow
contracted slightly from CHF 20.4 million to CHF 18.7 million. This was attributable primarily to therise in working capital as a result of significant growth in sales revenue.
Business segments: Components and Subsystems
The “Components” segment encompasses Interroll’s Drives & Rollers business unit, while the“Subsystems” segment includes Interroll Dynamic Storage and Interroll Automation.
Components segment
After a restrained start in the first quarter of 2010 incoming orders in the Components segment gradually gained momentum in all regional markets as the year progressed. Compared to the previous
year, incoming orders expanded 15.3 %. Sales to third parties rose by 20.2 % in local currency.
Expressed in the currency of consolidation, sales to third parties increased from CHF 157.9 million
to CHF 178.1 million. Within this context, all product groups managed to contribute to revenue
growth. As a result of strict cost control in combination with productivity increases and higher volumes, EBITDA rose by 43.4 %, up from CHF 19.6 million to CHF 28.1 million. The operating
profit (EBIT) more than doubled to CHF 16.5 million, with a margin of 9.3 % (2009: CHF 7.4 million,
margin 4.7 %).
In Europe, sales were up 15 % in local currency, while sales expressed in consolidated currencyrose by just 8 % due to the weakness of the euro. In the United States, sales increased by 22.4 %,while the Group’s business in Asia surged by around 42 %. Committed to expanding its market
share in Australia, Interroll took the decision to take over local business activities from its long-standing licence partner in Australia effective from the beginning of 2011.

12

Key figures for the Components segment, in CHF million

2010

2009

2008

incoming orders

182.6

158.4

220.3

Net sales to third parties

178.1

157.9

223.7

Change in % to the previous year

12.8

– 29.1– 4.9

EBITDA

28.1

19.6

40.5

Change in percent to the previous year

43.4

– 51.6– 15.4

in % of net sales to third parties

15.8

12.4

18.2

EBIT

16.5

7.4

28.8

in % of net sales to third parties

9.3

4.7

12.9

Capital expenditure

12.9

13.2

16.9

Average number of employees

805

770

814

R e v i e w

o f

t h e

f i n a n c i a ly e a r


Auszeichnung: iF Product Design Award 2011 für die neuen RollerDrives-Steuermodule

The Group’s encouraging performance was also supported by a number of new products rolled
out over the course of the year. This included the world premiere of the Interroll Synchronous Drum
Motor as an energy-saving drive solution for belt conveyors. The motor was certified by the European Hygienic Engineering & Design Group. One of the market’s leading industrial companies iscurrently testing the motor as a drive solution for its high-tech food manufacturing systems.
A new solution featuring drum motors as plug-and-play cassettes for checkout systems was also
very well received in the period under review. Autumn 2010 marked the launch of a new RollerDrive generation that was showcased at the Motek trade fair in Germany. This product has considerable potential even within the market for smaller system producers, the main benefit being its
user-friendly design. Compared to 2009, revenue generated from RollerDrive sales surged by 50 %.
Interroll is currently using this product solution as a springboard from which to further strengthen
its position as a technology leader. At the end of 2010, the new control units for RollerDrives were
nominated for the coveted 2011 iF Product Design Award 2011.

13

R e v i e w

o f

t h e

f i n a n c i a ly e a rSubsystems segment
While business within the Subsystems segment remained stagnant at the beginning of fiscal 2010,
it gradually recovered over the course of the year. Net sales to third parties in local currency were
propelled upwards by 42.9%; in consolidated currency net sales to third parties rose by 38% from
CHF 76.1 million to CHF 105.0 million. EBITDA picked up noticeably from CHF – 0.8 million to CHF 7.7
million, while EBIT also returned to positive territory at CHF 3.9 million (2009: CHF – 4.3 million). At
the end of 2010, incoming orders were up 27.4 %, rising from CHF 80.5 million to CHF 102.6 million.
In Europe, demand and investment spending remained relatively subdued in 2010, although sales
growth of 39 % in local currency and 31.6 % in consolidated currency pointed to a greater propensity to invest as the year progressed. The Americas and Asia recorded a significant boost in
business, expanding by 47.1 % and 50 % respectively.

Key figures for the subsystems segment, in CHF million

2010

2009

2008

Incoming orders

102.6

80.5

127.6

Net sales to third parties

105.0

76.1

134.2

Change in % to the previous year

38.0

–43.3

–0.6

EBITDA

7.7

–0.8

17.7

Change in percent to the previous year–

–104.5–11.5

in % of net sales to third parties

7.3

–1.1

13.2

EBIT

3.9

–4.3

14.6

in % of net sales to third parties

3.7

–5.7

10.9

Capital expenditure

14.5

9.7

5.5

Average number of employees

450

436

501

Based in Sinsheim (D, near Heidelberg), the new Global Centre of Excellence for conveyor modules
and subsystems, which opened in October 2010, is designed to support the Group’s long-term
growth. Alongside an administration building, the new centre boasts a production area of 12,300
square metres and will accommodate a team of up to 300 staff members in the long term. Designed
for maximum productivity in accordance with the latest manufacturing principles, the facility is able
to handle orders quickly and efficiently, irrespective of the volumes involved.
In Europe, Interroll completed highly successful sorter projects for the Finnish postal service and amajor courier company, as well as securing additional large-scale contracts in this field. Within thearea of dynamic storage, Interroll managed to boost sales attributable to its new roller tracks usedin Carton Flow systems. In the period under review, Interroll also initiated a development pipeline
for a new range of products aimed at the pallet flow storage market. The new solutions are to belaunched as part of the CeMAT trade show for intralogistics in 2011. Featuring a number of uniqueselling propositions, the new products will help Interroll to leverage further market potential anddrive growth in the area of dynamic storage.

14

R e v i e w

o f

t h e

f i n a n c i a ly e a rIn the financial year under review, Interroll received its largest ever sorter contract in North America from one of the region’s leading companies. Interroll also completed a major project for Amazon
in the United States during the financial year under review. Three distribution sites operated by
the online store were equipped with our sorters and Intelliveyor roller conveyor modules. As a “dooropener” product, the sorter often generates additional business for conveyor modules linked withthe sorter. In South America, Interroll succeeded in expanding its market share by a significant degree within the area of checkout counter systems.
In the period under review, Interroll extended its infrastructure in Thailand and China, with the express purpose of meeting regional demand for intralogistics solutions even more effectively. Operations in Thailand were relocated to a new site in the period under review; Interroll China will moveto new premises during 2011. Based in Suzhou, to the west of Shanghai, the company will operatefrom a larger facility offering more than 10,000 square metres of production space – a solid basis
for growth in the Asian market. Operating as a sales office with local assembly operations for ahighly responsive customer service, the site in Thailand is focused entirely on the region of southeastern Asia.
The company’s new belt curve was well received by the market in the period under review. Indeed,this product captured an additional share of its target markets, such as airport logistics and industrial applications, which are a focal point for Interroll. In the UK, for instance, the British Airport Authority specified the belt curve as a conveyor module to be used in baggage handling and sorting
systems at British airports. In China, Interroll received its first major orders for belt curves in thearea of airport logistics. Within the industrial sector, a leading producer of wood processing systems
opted for Interroll-designed belt curves for its manufacturing operations.

15G o a l s
o f t h e

a n ds t r a t e g y
I n t e r r o l l
G r o u p

Go a l s a n d S t r a t e g y of t h e In t e rro l l Gro u p
Goals
The principal overall objective of the global Interroll Group is to achieve sustained, above-average
growth in sales and earnings. We aim to establish ourselves as the leading player in specific target
markets and product groups and to achieve our strategic goals by establishing clear market
positions, taking a lead in terms of innovation, operating our own global sales platform, deliveringa high level of productivity and pursuing an investment policy focused on the long term. It is also
crucial to maintain our reputation as an attractive partner for our customers throughout the world
and as an employer that prides itself on a highly motivated and high-achieving workforce.
In brief

Strategy and target markets

Interroll’s strategy is to achieve sus-

The Interroll Group supplies key products for unit-load handling, internal logistics andtained, above-average growth and touse its key products to establish

automation in specific target markets such as food processing, airport logistics,

itself as the leading player in specificpostal services, distribution and other sectors. We make use of our own global sales

target markets.

network to maintain close contact with system integrators, multinationals, regional
plant manufacturers, engineering firms and end users and to analyse the precise requirements of each customer group. The solutions we provide to meet the everyday logisticalchallenges faced by our customers are based on key Interroll products that are supported by acommon global platform. An important element of our strategy is our commitment to developing
and then refining intelligent products that allow our customers to save space and energy and thatdeliver a fast return on investment.
Interroll’s Centres of Excellence operate on a global level. Their focus is on the development ofinnovative products for existing and newly emerging applications as well as on the implementationof highly productive manufacturing techniques for a clearly defined group of products. In order
to meet our customers’ needs as quickly as possible in every corner of the world, we have also set
up local production and service facilities under the control of our Centres of Excellence.
As a brand name, Interroll is identified with our activities as a global partner delivering innovativeand efficient solutions to the challenges set by internal logistical processes. The Interroll namestands for expertise, quality and innovation.
Success factors
Interroll’s success, both in the past and the future, depends on these factors:• concentrating our resources on key products with which we aim for worldwide market leadership• developing application-oriented product platforms on a modular basis, thus allowing us toachieve substantial economies of scale• maintaining a global sales presence supported by our own local sales teams allowing us to
identify and respond quickly to customer needs and market trends and exploit market potential
throughout the world, supported by a global production network• maintaining consistent quality standards for our products worldwide• focusing on continuous development of new products and their rapid introduction to the market• providing professional support, training and development for all our workforce

16

o f

G o a l sa n ds t r a t e g yt h e
I n t e r r o l l
G r o u p

Growth drivers
Our future growth strategy is geared towards meeting clearly identified market trends that offer
potentially attractive sales opportunities. These include:• continued growth in passenger numbers in international air travel, requiring expansion in airport
handling capacity (baggage conveying systems) and security technology (in-line screening of
baggage and freight)• strict hygiene regulations in the food processing industry, which are being adopted by anincreasing number of countries and call for premium-quality conveyor drives such as Interroll
Drum Motors• increasing liberalisation of postal markets and the regionalisation of courier/express/parcel
service operators, who are investing in distribution and new sites in order to establish a local
presence near their customers• further decentralisation of distribution centres for a wide range of goods in order to speed up delivery times• increasing product variety and shorter product life cycles demand greater flexibility and customisation in the order-picking of goods• increased productivity levels in the industry and related efficiency gains in warehousing anddistribution processes• demand for logistics equipment that delivers cost-efficient operation and a short returnon investment
Management structure of the Interroll Group
Led by our strategic holding company based in Sant’Antonino/Switzerland, the Group is divided
into two global divisions: “Global Sales & Service” is responsible for driving sales of Interroll’s entire product portfolio by customer group; “Products & Technology” covers our global centres of
excellence and local production sites and is responsible for R&D, product management, strategicpurchasing, production technology and manufacturing.
What is it that makes Interroll unique?
Whether global or local, big or small, all our customers benefit from the combined know-how andapplications experience built up by the global Interroll Group over a large number of reference
projects. Our development and production centres transform this critical knowledge into innovative,
market-leading solutions for over 23,000 customers around the world who can be assured at all
times of gaining above-average benefit from those solutions, the fruit of innovation from all over theworld. Interroll’s globally networked service portfolio makes it unique in the market for internal unitgoods handling, logistics and automation.

17

M a r k e t

s e g m e n t sMarket segments
The Interroll Group pools its resources across the world to offer energy-efficient logistics solutions
based on key products within specific market segments. We firmly believe that the market segments detailed below will generate outstanding levels of growth over the long term.
Food processing and distribution
In line with the rise in world population, we are seeing a constant increase in the demand for food.
In the developed economies, it is likely that this will reinforce the trend towards the preparationof consumer-ready, pre-portioned food items. Steadily increasing purchasing power in the newly
industrialised countries is also helping boost sales of convenience foods. At the same time, theregulatory authorities in these regions are introducing stricter hygiene requirements on food processing systems.
In brief

These trends will produce a demand for greater capacity in the area of food distribu-

Interroll’s clearly defined producttion. We are also seeing tougher competition between food retailers. In response toportfolio is focused on the aboveaverage, long-term growth potentialof food, postal services, airport

pressure on costs, companies need to establish ever more intelligent and streamlined
logistics processes.

logistics, distribution and industry.

Interroll supports the food processing industry with a range of top-quality, intelligent
conveyor drive solutions that comply with all the latest hygiene requirements. Our
products are extremely energy-efficient and compact. Interroll flow storage solutions for heavy tolight goods provide a very attractive alternative to conventional storage technology for the food
distribution process. The force of gravity is exploited to cut energy use to zero and keep maintenance costs to a minimum. Compact flow storage systems also save space, shorten the distancetravelled by fork lifts and reduce ongoing operating costs.
Mail and parcel distribution centres
State-run postal services have been and still are being privatised in many countries. These operators face very tough competition in the postal delivery market and are therefore obliged to reduce
their operating costs. One of the key success factors in this field is the automation of internal sorting and distribution systems. Privately run postal operators are also taking further steps to optimise
their logistics processes.

18

Interroll drum motors drive the conveyors at a poultry processing plant (left). Interroll crossbelt sorters carrying trays inthe mail centre operated by Swiss Post in Zürich-Mülligen (right).

M a r k e t

s e g m e n t s

Flight security: X-ray equipment for screening hand luggage and conveyors driven by drum motors (left). Distribution centres: Interroll pallet flow
storage for frozen foods (middle). Industry: RollerDrives and conveyor rollers in a printing plate machine (right).

In terms of purchasing behaviour, consumers are turning increasingly to online shopping. Mail orderfirms are gearing up for a steady increase in sales. This trend places greater demands on internal
logistical processes in the areas of sorting and packaging. Furthermore, the fact that in this type ofbusiness goods are often returned makes additional requirements of automated systems.
In recent years, increasing demand for Interroll sorting equipment has underlined their cost-efficiency and reliability. When it comes to internal logistics, fast throughput times, low maintenancecosts and outstanding levels of energy efficiency and availability are and will remain a decisive
success factor in the postal sector.
Airport logistics
Global freight streams and the growing demand for mobility are leading to the construction of
new airports and the expansion of existing ones throughout the world. This general trend is further
boosted by major international events such as the Olympics and the World Cup. Consequently,
airports need to expand their internal logistics processes for passenger luggage and freight whileat the same time streamlining their logistics costs.
Security requirements also continue to increase in the field of air travel. In many countries, the aim
is still to achieve 100 % inline screening of luggage and passengers. With hand-luggage checks
increasingly acting as a bottleneck, more efficient checking systems are being developed. Equally,
as recent events have demonstrated, there is considerable scope for improvement in the area of
freight security controls.
In addition to its space-saving conveyor drive solutions, which are primarily designed for the checkin area, Interroll supplies a range of modules such as belt/roller conveyors and belt curves that
ensure fast throughput times for luggage items. Logistics modules have also been developed thatspeed up passenger checks by a considerable margin.
Distribution and logistics outsourcing
Due to the increasing diversity of consumer goods and a simultaneous reduction in storage capacity at the point of sale, warehouse and distribution logistics systems need to be fast and highly
efficient. In recent years, smaller and medium-sized retailers have increasingly outsourced these
activities to specialist transport and logistics firms. In turn, the challenge facing these companies
19M a r k e t

s e g m e n t s

is to meet the diverse requirements of their customers efficiently and inexpensively. This cannot
be achieved without a high level of automation and platform-based logistics solutions.
Interroll supports the logistics industry with a broad portfolio of platform-based products andmodules, all of which combine outstanding functionality with sophisticated control elements.
This makes it possible to apply the same solution to the handling of product streams with widelydiffering logistical requirements.
Industry
In response to globalisation and the increasingly tough competition it generates, companies haveno choice but to streamline their operations, especially in the processing industry. This applies at
every stage from production through to logistics processes. Accordingly, innovative and intelligent
logistics solutions that streamline processes and optimise costs have met with a very positive response. In newly industrialised countries, many firms are introducing more professional processing
and logistics processes to ensure that they remain competitive in the face of increases in local
wage costs.
Interroll’s comprehensive portfolio of high-quality products ranges from rollers and intelligent
drives through to belt and roller conveyor modules. Ongoing product development allows us to deliver outstanding logistics solutions and to open up new market segments in the world of industry.

20

i n n o v a t i o n

Inno v a t i on br e e d s s u c c e s s :In t e rro l l S y n c hrono u s Dr u m M o t orThink tank, hothouse…
or breeding place for new ideas? In the case of the Interroll Research Centre (IRC), Wassenberg(Germany, near Düsseldorf), all three attributes seem appropriate. Above all, however, “appetitefor discovery” possibly best captures the spirit of Wassenberg. Here, team members from Germany, India, the United Kingdom, China, Poland and the Seychelles have come together to share
their fascination for innovation and progress, driven by their mutual desire to push back the frontiersof engineering and create best-in-class value.
– An interview with: Gerhard Froebus, Technical Director of the IRC.
In brief

Invented in Wassenberg – used around the globe. How do you see the future of the

The Interroll Research Centre (IRC)

Synchronous Drum Motor developed here in Wassenberg?

focuses on innovation. An essential
prerequisite for success: expertise,

Gerhard Froebus: Very dynamic indeed!

lateral thinking, enthusiasm andcommitment.

Do you think your outlook is realistic?
Froebus: Yes, certainly. I believe that the Interroll Synchronous Drum Motor is a key
product and has established us as the outright technology leader within the area ofcompact drives.
What does the Synchronous Drum Motor have that competitors simply can’t offer?
Froebus: First and foremost, it is on the market, which places us head and shoulders above thecompetition. One of the world’s leading manufacturers of food processing technology as well
as a premier producer of logistics equipment are currently installing the new Interroll motor in theirsystems – two key markets in which Interroll has established a firm foothold.
Which development criteria are generally applied by the IRC in Wassenberg – what makes new products and processes ready for roll-out and thus attractive for customers?
Froebus: Our focus is on delivering maximum value. At the same time, we are committed to identifying key trends within the market place so that we are well-positioned when it comes to developing
next-generation solutions. In executing new technologies, we are guided in particular by the idea ofdelivering “proven” solutions, i.e. the entire process has to be comprehensible, documentable andscalable. Only by following this approach is it possible to come up with various application scenariosthat provide an insight into how a new product behaves in a specific situation. Additionally, aspects

Gerhard Froebus, left, Technical Director of the Interroll Research Centre.

21

i n n o v a t i o nsuch as “plug and play”, “low maintenance costs” and “energy-saving operations” are high on ourlist of priorities, simply because they represent tangible benefits for our customers.
You have to ensure that new products can be produced and supplied with the shortest possible leadtime. After all, the ability to deliver on time and in the required quantities is essential for market success.
Froebus: Absolutely! Not only do our customers want to be supplied with high-end products, they also
want them to be delivered at the agreed deadlines. With this in mind, our IRC team streamlines theoverall design of Interroll products, such as in the case of the new Synchronous Drum Motor, and carefully studies all production scenarios. Our latest product to leave the development pipeline combines
outstanding performance with ingenious simplicity – a key benefit both for Interroll and its customers.
Do you and your IRC colleagues see yourselves as “contract researchers” or “free spirits” on a journey
through the universe of logistics?
Froebus: A bit of both. Acting as explorers or incubators, our mission is to search, probe and delvewith the express purpose of developing new products and processes, either on behalf of our customers or as part of our own R&D activities. To do so successfully, we need room for manoeuvre. At thesame time, we have to be able to translate creative ideas into new high-end products with a certain
amount of discipline – quite a challenge. We apply highly developed evolutionary methods to manage
and control this dynamic process. Of course, we are also heavily dependent on the professional input of all employees. Our success is a testament to the skill and dedication of the entire Interroll team.
What is the key to market success?
Froebus: Companies using Interroll products are looking for a conveyor or handling solution that offers
high performance and reliability. With this in mind, we review our work on a continual basis, constantly cross-checking it against the exacting quality standards defined within the Interroll brand strategy.
How do Interroll customers respond to the philosophy and activities of the IRC Wassenberg?
Froebus: We have already been told that we are good enough to set the world alight. As you canimagine, that is a tremendous source of motivation. After all, nothing is more rewarding than acustomer’s praise. Engaging in close dialogue with our customers is always very inspiring – it provides additional impetus for best-in-class solutions. What is more, we believe in “accompanying”
every new product until it no longer needs us. This includes stages such as initial marketing orcommissioning.

Interroll Driver for the new Synchronous Drum Motor.

22

I n n o v a t i o n

Inno v a t i on br e e d s s u c c e s s : In t e rro l l
Dr i v e r for S y n c hrono u s Dr u m M o t or
The systems integrator Sydel/Sedep (Syleps Group), based in Lorient/France, is particularly impressed by the new sensorless Synchronous Drum Motor developed by Interroll. “Thanks to thisdrum motor, we are able to control all operations with maximum precision, an essential prerequisitewhen it comes to improving the overall throughput of state-of-the-art conveyor systems,” says
Yves Le Corre, R&D Manager at Sedep. “Interroll’s cutting-edge solution has opened up completely
new avenues for us – with fully controllable conveyor operations independent of the size, position
or weight of the individual items to be conveyed.” Following an extensive assessment of the Synchronous Drum Motor and the services provided by the Interroll Research Centre in Wassenberg(Germany), Sydel/Sedep opted for Interroll’s versatile, high-performance drum motor, which is also
perfectly suited for deployment in the newly developed CP20 conveyor system. “We also wanted
a matching driver,” says Stéphane Lecomte, the manager responsible for the automation division at
Sydel. “Our focus was on a compact and well-protected solution with an ASI bus and standard
voltage for decentralised use.”
Working in close collaboration with an engineering partner, Interroll developed the Driver in justnine months and now supplies it together with the Synchronous Drum Motor as a complete package. The Interroll Driver – a world premiere – meets all user requirements: compact design witheasy-to-use connectors for fast and simple installation.
Fast, controlled and dynamic: Interroll Synchronous Drum Motor in conjunction with the newly
developed frequency converter for high throughput and superior performance in modules such as
90° Transfers, Timing Belts and 30°/45°/90° Belt/Round Belt Merges.
The Interroll Synchronous Drum Motor is also available with certification for the food manufacturingindustry (EHEDG, EC1935– 2004, NSF, FDA, ECOLAB) and is protected (IP69K) against dust,
high-pressure cleaning and water penetration.

Conducted a thorough assessment of the Synchronous Drum Motor and Interroll Research Centre in Wassenberg (D) –Stéphane Lecomte (left), Project Manager, and Yves Le Corre, at Technocentre Syleps in Lorient (F): “Excellent performance”.

23

S u s t a i n a b i l i t y

S u s ta i n a b i l i t y
Sustainability is a key element of Interroll’s corporate strategy. We aim to create added value
for our customers, investors, employees and others with an interest in the Group by exploiting new
business opportunities and minimising risks within the framework of current economic, environmental and social developments.
Interroll strives to achieve consistent growth over the long term and a leading global position in
key markets with specific products. As a financially solid enterprise, Interroll is therefore very active
in driving the process of innovation in the field of internal logistics.
In brief

For investors, Interroll represents an attractive opportunity to benefit from a stake in a

At Interroll, we believe that sustainabili-

company that is clearly focused on its core competences. We want to ensure thatty means offering solidity. The Group’s
products and services build on an attractive brand and aim to deliver con-the business remains firmly established as an attractive brand with long-term prospects
and solid results.

sistently solid results over the longterm.

Attractive brand
The Interroll name is identified with the Group’s activities as a global partner for key,market-leading products that are designed to improve internal logistical processes. It stands forinnovation, expertise and quality. Since its formation in 1959, Interroll has grown to become an international group made up of 28 companies and with over 23,000 customers. The Group holds
250 regional and global patents.
Over the last three years, Interroll has made great efforts to strengthen the brand, and seminars
were held to roll out our brand policy and brand management principles throughout the Group.
The main aim of this training campaign was and is to emphasize core brand values in our day-today contact with Interroll’s stakeholders, the media and the public.
Long-term prospects
We believe that continued product innovation is essential if we are to achieve sustained, long-term
growth and enhance the appeal of Interroll both as a brand and as a vehicle for investment.

Intelligent, energy-saving conveyors: individual conveyor zones remain on stand-by until required.

24

S u s t a i n a b i l i t yExpenditure on R&D in CHF million
0

2.5

5

7.5

10

2007					6.42008					6.92009					8.62010					8.7Interroll’s market-leading products respond to major trends and focus on customer utility. In mostcases, they offer a return on investment within two to three years. Such trends might involve savingenergy or space, complying with increasingly strict technical regulations (e.g. hygiene, energy
efficiency and safety), ease of construction, installation and operation (“plug & play”) and the reduction of noise in the working environment, etc. Interroll’s key products help to deliver massive
improvements in terms of the productivity and environmental impact of logistics systems. As a member of organisations such as the European Hygienic Engineering and Design Group (EHEDG),Interroll is actively involved in the process of establishing industry standards.
In 2008, in order to strengthen our long-term capacity to innovate, we set up the Interroll ResearchCentre (IRC) in Wassenberg (D, near Düsseldorf). The IRC is dedicated entirely to the development of new products and solutions. It employs engineers from several countries and works inclose collaboration with our customers (cf. “Innovation”, page 21).
In recent years, Interroll has consistently increased the resources available for research anddevelopment. In 2010, R&D spending in local currency terms was up 10.5 % on the previous year
(2009: CHF 8.6 million). Thanks to its sound financial position, the Group was also able to invest
in 2009 in spite of the difficult economic situation.
Some of the most important investments in the last few years involved the construction or expansionof our centres of excellence. These operate in line with the very latest manufacturing principles suchas “Kaizen” to help bring about lasting success and continuous development. “Kaizen” covers
all the most crucial factors that influence a company’s results, e.g. quality, costs, logistics, staff motivation, safety, technology and the environment. These are examined across the entire process
chain – from suppliers through to internal customers and end customers.
Thanks to Interroll’s meticulous efforts to recruit and establish talented new leaders from within ourown ranks, over the last ten years we have been able to form a stable management team at bothGroup and individual country level. This is vital to our future success and the consistent implementation of our strategic goals.

25

S u s t a i n a b i l i t ySpace savings
Flächengewinn
%
up to
60
bis50
100%

Flow storage saves up to 50% on space compared to static systems.

Solid results
Interroll has reported increases in both sales and earnings every year since 2000 with the exception of the crisis year 2009. The expansion of our R&D activities and high levels of capital expenditure in recent years should help to maintain this trend in the future. Interroll is keen to improve its
dividends year-on-year to ensure that the yield on an investment in the company is in line with market
expectations. Over the last few years, Interroll has strengthened its already healthy financial base.
Sustainable solutions in daily operation
Tray conveyor systems: Interroll’s recently launched EC310 RollerDrive improves the energy balance of zero-pressure accumulation conveyors. During braking, the DC-powered roller feeds backup to 30 % of the energy used. Energy is also saved by ensuring that individual conveyor zones
only operate when required.
Pallet flow storage: Compact, space-saving, first-in first-out pallet storage can save up to 50% on thespace required by a static system. By reducing fork lift movements and using gravity to movethe pallets in the lanes, our pallet flow storage systems also save a considerable amount of energy.
Conveyor drives: Interroll’s new Synchronous Drum Motor is part of the latest generation of highperformance drum motors. This eco-friendly drive solution is designed for applications such as
food processing, packaging systems, dynamic weighing technology and logistics. Unlike comparable conveyor drives, the Synchronous Drum Motor transfers 92– 95 % of the available power
directly to the conveyor system. This makes it possible to reduce material and energy costs byaround 30 %. Thanks to its design, the Synchronous Drum Motor simplifies the cleaning procedure in food processing applications and therefore makes a further contribution to lowering costs.

26

S t a ff

S t a ff
The last financial year made great demands on the commitment of our staff in every area of theGroup’s activities throughout the world, and it was their efforts that helped to deliver such positive
results.
In Europe, a tremendous amount of energy went into construction projects in Wermelskirchen andSins­heim. Work on the conversion and expansion of the Centre of Excellence for Conveyor Rollers
and RollerDrives in Wermelskirchen (Germany, near Cologne) continued as planned. The Centre is
expected to open during the current year. The new Centre of Excellence for Conveyor Modules
and Subsystems in Sinsheim (Germany, near Heidelberg) was completed in the year under review.
The opening ceremony in October 2010 was attended by a large international audience of industry representatives.
Our colleagues in North America gave a considerable boost to the Interroll Group’s

In brief
Interroll staff throughout the world
helped deliver positive resultsin 2010. North America and Asia
put in a striking performance.

position in the regional market, where sales in 2010 grew by an above-average 32 %and we achieved a very satisfactory increase in market share for our products, modules and sorters. Interroll was awarded its biggest sorter order to date for the region
from a sizeable North American company in the postal sector and secured a contractfrom the online trader Amazon regarding another major project for sorters and conveyor modules.

Market share was up by an encouraging margin in Asia, where we also expanded our infrastructure.
Sales increased sharply to end the year up 45 %. Interroll Thailand completed its move to a newbuilding, and Interroll China is about to follow suit. From this year onwards, our colleagues will beable to serve the fast-growing Chinese market even more efficiently from a new production centre
in Suzhou to the west of Shanghai.
With new centres of excellence in Europe and new production sites in Asia, the Interroll Group iswell placed to maintain a pattern of strong growth.

New Centre of Excellence for Conveyor Modules and Subsystems in Sinsheim (Germany).

27

S t a ff

Dr. Christoph Reinkemeier, Head of “Global Sales & Service” (left), Jens Karolyi, Head of Corporate Marketing (right).

Training
With regard to training, the Interroll Academy in Germany expanded its course modules andextended the range of training opportunities available in Asia. The professional training offered by
the Interroll Academy is supplemented by external courses throughout the world and increasingly
by flexible individual programmes delivered via the e-Learning platform. The Interroll Academy
is making a sustained contribution to the implementation of the Group’s long-term growth strategy.
Its main aims are to build on Interroll’s technological leadership by providing initial and ongoingtraining, to enhance the appeal of Interroll as an employer and to support talented individuals acrossthe Group.
During the year under review, our staff worldwide have been involved in numerous sales training
courses and workshops in preparation for the reorganised sales network, the aim here being tosupport our customers even more effectively and with a particular focus on the requirements of system integrators, equipment manufacturers and users. Our key materials handling products need to
combine speed of supply, ease of installation and maximum operational availability to help ensurea fast return on investment while making efficient use of resources and protecting the environment.
Changes to Group Management
At the beginning of 2011, following the announcement last October of its plans to restructure thesales network, Interroll made a number of new appointments in key roles within Group Management (see also page 53). Dr. Ralf Garlichs, Managing Director Business Unit Interroll Drives & Rollers, took over the Group’s new “Products & Technology” division, which covers Interroll’s Centresof Excellence and production sites across the world and is responsible for R&D, product management, strategic purchasing, production technology and local manufacturing.
Dr. Christoph Reinkemeier, former CEO at Deckel Maho Gildemeister in the United States, took overas Head of “Global Sales & Service” on 1 January 2011. The Corporate Marketing division has
been reorganised and is now led by Jens Karolyi, who has many years’ experience in consumer
goods marketing. Operational management of America and Asia now lies with two of Interroll’slong-serving professionals, Tim McGill (North and South America) and Kwang-Heng Seng (Asia).

28

S t a ff

As part of Interroll’s growth strategy, under the restructuring arrangements the managing directors of
the existing business units will focus on their areas of expertise. As a result of the restructuring, welost just one post in the Corporate Technology division, which now forms part of “Products & Technology”. Flavio Zanatta, Head of Corporate Technology, left Interroll at the end of November 2010.

Average number of employees
0

500

1000

1500

2007

1275

2008

1315

2009

1206

2010

1255

Average number of employees by region, 2010
0

500

1000

1500

Europe

805

USA

275

Asia

175

29

Powe rStowW h a to u r

c u s t o m e r s
s a y
P o w e r
S t o w

The roller conveyor systems developed by Denmar k’s Power Stow A/S are designed to makeairport baggage handling more efficient – comerain or shine, heat or frost. Fitted to belt loader
vehicles, the state-of-the-ar t handling systems
are capable of operating under extreme conditions and can be driven directly into the baggage
hold of a B737, B757, A319 or Embraer. Interroll
RollerDrives with tapered design features ensurethat baggage is loaded and unloaded safely andreliably at all times.

«We were looking for a reliable, space-saving
24V DC drive. Impressed by the combinationof outstanding performance and simple installation, we opted for Interroll’s
RollerDrive solution.»

Martin Vestergaard
General Manager,
Power Stow A/SPower Stow A/SApplication

Locations

Conveyor solution Items handled

Baggage handlingat airport ramp

Worldwide

Roller conveyor
system fitted tobaggage-handlingvehiclesIntegrated Interroll Key benefits
products

Baggage up to 200 Motorised conveyor
kg/itemrollers with tapered
elements for
precise handling

Simplified
operations withtransport directly
to/from aircraft
baggage holds

Ambient
conditions

Systemmanufacturer

Weather andPower Stow A/S,
temperatures:
Roskilde, Denmark
tropical heat to
sub-zero conditions

31

Fr isco.plW h a to u r

c u s t o m e r ss a y
F r i s c o . p lFast, fresh, fantastic ser vice: This is the recipe chosen by Fr isco.pl when it comes to ser vinga rapidly expanding customer base in Greater
Warsaw and beyond. Established as recently as
2006, the online supermarket relocated to its
new premises near the centre of Warsaw in 2008,
the rationale being to bring administration anddistribution under the same roof. The latest additions to its picking and distribution team:Interroll Crossbelt Sor ter and Intelliveyor.

«The Interroll Crossbelt Sorter is close to
100 per cent accurate and very easy to operate,
as well as offering outstanding reliability with
vir tually no need for ser vicing –even in the case of heavy items
weighing up to 30 kg.»

Agnieszka Malinowska
Operations Manager
Frisco.pl

Frisco.pl
Application

Location

Online supermarket Greater Warsaw
regionConveyor solution Items handled

Integrated Interroll Key benefits
products

Used byInterroll Crossbelt
Sorter: 60
discharge points,
33m in length

Round Belt Merges, Superior sortingIntelliveyor for
precision andzero-pressure tote system uptime
handling

Frisco.pl, online
supermarket,
Warsaw, Poland

Foodstuffs,
perishables, frozen
foods, non-food,
10,000 items

33

OEG

W h a to u r

c u s t o m e r s

s a y
OE G

Throughout Europe, OEG Oel- und Gasfeuerungsbedarf Handelsgesellschaft m.b.H. has establisheditself as a key supplier to the professional plumbing trade. Driven by rapid growth, the company
based in Hessisch Oldendorf (D) expanded its
warehouse in 2009 with the express pur pose of accommodating 6000 new products. Orders received
b y 8 p . m . a r e d i s p a t c h e d t h e n e x t d a y. I n t e r r o l l
Carton Wheel Flow ensures poetry of motion whenit comes to internal goods handling and orderpicking.

«We are committed to unlocking key benefits forcustomers and staff by continuously optimising ourgoods handling performance. Our new warehouseequipped with Interroll Carton
Wheel Flow has proved an allround winner. We are delighted
with the end-to-end solution.»

Helge Möller
Sales Director
OEG

OEG Oel- und Gasfeuerungsbedarf Handelsgesellschaft m.b.H.
Application

Items handled

Conveyor solution Location

Distribution centre
for catalogue andonline shop items

HVAC and technical Electronic picking
goods in plastic
system for pantotes
Europeandistribution

EuropeIntegrated Interroll Key benefits
products

Used byCarton Wheel Flowwith exceptional
service life forpicking racks

OEG Oel- undGasfeuerungsbedarf Handelsgesellschaft m.b.H.,
Hessisch Oldendorf(D, near Hanover)

Greater storage
capacity andconsistently highpicking speed

35

C o r p o r a t e

G o v e r n a n c e
C o n t e n t

Corporate GovernanceContent
1

Introduction

38

2Group structure and shareholders

38

3

Capital structure

39

4Operating Group structure40

5

Board of Directors

41

6Internal organisation

44

7

Competence regulations

45

8

Information and control instruments

45

9Group management

46

10

Compensation, shareholdings and loans

49

11

Shareholders’ Participation Rights

50

12Changes of control and defence measures

51

13

Auditor51

14

Information policy

52

15

New operational management structure53

37

C o r p o r a t e
G o v e r n a n c e
I n t r o d u c t i o n/
G r o u p
S t r u c t u r ea n ds h a r e h o l d e r s

1 Introduction
The corporate governance report 2010 of the Interroll Group refers to the official guideline of the
SIX on Corporate Governance as well as to the regulations of the “swiss code of best practicefor corporate governance”. In order to minimise repeated comments, certain sections cross referto other sections, especially to the financial report.
The compensation report is part of the financial statements of INTERROLL HOLDING LTD.

2 Group structure and shareholders
Group structure
The operating structure is disclosed in chapter 4 of this report.
The mother company of the Group, INTERROLL HOLDING LTD., is domiciled in Sant’Antonino/TI,
Switzerland. Its registered shares are traded at the main segment of the SIX Swiss Exchange
under the security number 637289. Further notes to the listing can be found in the inside coverof the annual report (“Information for investors”).
Subsidiaries belonging to the consolidation range of the Interroll Group are disclosed in note 8.4of the Group’s financial statements. There are no other equity instruments publicly traded expect
those of INTERROLL HOLDING LTD.
Significant shareholders
All significant shareholders holding a reportable participation are disclosed in the note 3.7(“Significant shareholders”) of the financial statements of INTERROLL HOLDING LTD.
Cross shareholdings
The Interroll Group does neither maintain capital nor voting rights with other entities.

38

C o r p o r a t e
G o v e r n a n c e
C a p i t a ls t r u c t u r e

3 C a p i ta l s t r u c t u r eCapital and authorised/conditional capital
The share capital of Interroll Holding Ltd. amounts to CHF 8.5 million and is made up of 854,000
fully paid registered shares with a par value of CHF 10 each. Each share has one voting right.
There is no authorised or conditional capital. Furthermore, the are no other equity like instruments,
such as profit sharing rights or participation certificates. Additional information to the equity is disclosed in the financial statements of the Group (see 1.5 – Equity movements) and in the respective
notes.
Changes in capitalIn the year under review, the share capital was reduced by CHF 4.3 million to CHF 8.5 million bya reduction of the par value of CHF 5 per share.
Limitations on transferability and nominee rights
Information to limitations on transferability and other nominee rights of the shareholders are disclosed in chapter 8 (“Shareholders’ participation rights”) of the report to the corporate governanceof the Interroll Group.
Convertible bonds and options
There are no convertible bonds outstanding. In 2006, the board of directors approved a Management
share option plan. Further information to this plan is disclosed in 7.1 of the Notes to the financial
statements of the Interroll Group.  

39

C o r p o r a t e
O p e r a t i n g

G o v e r n a n c e
G r o u p
S t r u c t u r e

4 O p e r at i n g G r o u p s t r u c t u r e
The operating structure of the Interroll Group as per balance sheet date is as follows:
Board of Directors
Strategic Holding
Interroll Holding Ltd.
Corporate Strategy	Corporate Finance	Corporate IT 					Corporate Communications
Business Units
Components Segment

Subsystems segment

Interroll Drives & Rollers

Interroll Dynamic Storage

Interroll Automation

Unit Handling

Warehousing & Distribution

Automation & Conveyor Lines

Headquarters: Wermelskirchen (DE)Headquarters: La Roche sur Yon (FR)Headquarters: Sinsheim (DE)verkaufs- und produktionsgesellschaften
Interroll CZ, s.r.o., Breclav (CZ)
Interroll Fördertechnik GmbH, Wermelsk. (DE)
Interroll Nordic AS, Hvidovre (DK)
Interroll España SA, Cerdanyola del Vallés (ES)
Interroll SAS, Saint Pol de Léon (FR)
Interroll Japan Co. Ltd., Tokio (JP)

Interroll Japan Co. Ltd., Tokio (JP)

Interroll Japan Co. Ltd., Tokio (JP)

Interroll Korea Corporation, Seoul (KR)

Interroll Korea Corporation, Seoul (KR)

Interroll Korea Corporation, Seoul (KR)

Interroll (Asia) Pte. Ltd., Singapore (SG)

Interroll (Asia) Pte. Ltd., Singapore (SG)

Interroll Polska sp.z.o.o., Warsaw (PL)
Interroll (Asia) Pte. Ltd., Singapore (SG)
Interroll Ltd., Corby (GB)
Interroll Australia Pty. Ltd., Melbourne (AU)
Interroll JOKI A/S, Hvidovre (DK)
Interroll Engineering GmbH, Wermelsk. (DE)
Interroll Trommelmotoren GmbH, Baal (DE)
Interroll AG, S. Antonino (CH)

Interroll AG, S. Antonino (CH)

Interroll AG, S. Antonino (CH)

Interroll SAS, La Roche sur Yon (FR)
Interroll Automation GmbH, Sinsheim (DE)
Transtechnik GmbH, Wassenberg (DE)
Interroll Components Canada Ltd., Concord (CA)
Interroll Canada Ltd., Newmarket (CA)

Interroll Canada Ltd., Newmarket (CA)

Interroll (Suzhou) Co. Ltd. Suzhou (CN)

Interroll (Suzhou) Co. Ltd. Suzhou (CN)

Interroll (Suzhou) Co. Ltd. Suzhou (CN)

Interroll SA (Proprietary) Ltd., Johannesb. (ZA)

Interroll SA (Proprietary) Ltd., Johannesb. (ZA)   

Interroll SA (Proprietary) Ltd., Johannesb. (ZA)

Interroll (Thailand) Co. Ltd., Panthong (TH)

Interroll  (Thailand) Co. Ltd., Panthong (TH)

Interroll Corporation, Wilmington NC (US)

Interroll Dynamic Storage Inc., Hiram (US)         Interroll Logistica Ltda., S ão Paolo (BR)

Interroll Logistica Ltda., S ão Paolo (BR)

Agents, Franchisees

Agents, Franchisees

Sales companies       Production companies      Sales- and production companies

Interroll Automation LLC, Jeffersonville (US)

Agents, Franchisees
As of December 31st 2010

In October 2010, the Group anounced a reorganisation of its operating structure coming into force as from 2011.
The respective new operational structure is disclosed in chapter 15 of the report to the corporate governance.

40

C o r p o r a t e
G o v e r n a n c e
B o a r do f
d i r e c t o r s

5 B o a r d o f Di r e c t o r s
Members of the Board of Directors

From left to right
Ingo Specht, Urs Tanner, Kurt Rudolf, Philippe Dubois, Paolo Bottini, Marco Ghisalberti und Prof. Horst Wildemann

The Board of Directors of INTERROLL HOLDING LTD., Sant’Antonino (CH), comprised of sevennon-executive members at year end 2010:
Name

Year of birth Function
Nationality Committee membership

Initialelection

Electeduntil

Kurt Rudolf

1942
Swiss

Chairman since 2006
Compensation committee since 2006

2001

2013

Urs Tanner

1951
Swiss

Deputy chairman since 2009

2008

2011

Paolo Bottini

1965
Swiss

MemberAudit committee since 2003

2003

2012

Philippe Dubois

1950
Swiss

MemberAudit committee since 2003

2003

2012

Dr. Horst Wildemann 1942
GermanMemberCompensation committee since 1999

1999

2011

Marco Ghisalberti

1961
ItalianMember

1997

2012

Ingo Specht

1964
GermanMember2006

2012

Election and terms of office
The Board of Directors is composed of at least six members. These members are elected individually by the General Meeting of the shareholders for a three-year term. The shareholders Dieter
Specht and Brunda Ghisalberti or their direct first generation descendants are entitled to nominate
totally two representatives (one representative per family), as long as they hold at least 10 % eachof the share capital. The chairman of the Board is elected by the Board of Directors (Art. 19 and 20of the Articles of Association). Specific topics and tasks may be assigned to members or committees of the Board.
41

C o r p o r a t e
G o v e r n a n c e
B o a r do f
d i r e c t o r sProfessional background and vested interests of the Board of Directors
Kurt Rudolf Dipl.-Ing. ETH
Current activities
Since 2009: Member of the Board of Directors of Carag Ltd., Zug (CH)
Since 2005: Member of the Board of Directors of Swissimplant Ltd., Solothurn (CH)
Since 2005: Member of the Board of Directors of Belimed Ltd., Zug (CH)
Since 1996: Member of the Board of Directors of Medela Group, Zug (CH/US)Former activities
1986 – 1990: CEO Portescap Group, La Chaux-de-Fonds (CH)1982 – 1985: Managing Director of LGZ Landis & Gyr Zug Ltd., Zug (CH)Urs Tanner 
Executive MBA, University St. Gallen (CH)
AMP, Harvard (US)Current activities
Since 2005: Member of the Board of Directors of Swissimplant Ltd., Solothurn (CH)
Since 1997: Member and delegate of the Board of Directors of Medela Group, Zug (CH)Former activities
1995 – 2007: CEO of Medela Group, Baar (CH)1983 – 1994: Managing Director of Tool & Plastics, Mikron Group, Biel (CH)1967 – 1983: Management positions at Styner + Bienz (Adval Tech), Niederwangen (CH)
Paolo Bottini Lic. iur., lawyer
Tax specialist (Eidg. dipl.)
Current activities
Since 2002: Partner and Director of Bär & Karrer, Lugano (CH)
Since 1996: Guest lecturer for law and tax at the Centro di Studi Bancari, Vezia (CH)Former activities
2000 – 2001: Partner of Bär & Karrer, Lugano (CH)1996 – 2000: Associate of Bär & Karrer, Lugano (CH)
Philippe Dubois 
Lic. iur. and lic. oec.
Current activities
Since 2002: Independent management and financial consultant for M&A, corporate financeand management coaching
Former activities
1999 – 2001: Senior Investment Banking positions at Bank Julius Bär
1982 –1999: UBS Warburg (also responsible for the IPO of Interroll)42

C o r p o r a t e
G o v e r n a n c e
B o a r d
o f
Di r e c t o r sProf. Dr. Horst Wildemann
Prof. of university Dr. Dr. h. c. mult.
Honorary professor at the universities of Klagenfurth and Passau (DE)Award of the first class cross merit of the Federal Repupblic of Germany
Award of the order of merit of Bavaria
Dipl.-Ing. in mechanical engineering and Dipl.-Kfm. in business administration at the universities of
Aachen and Cologne (DE) and also of the universities of South. California and of Indianapolis (US)Current activities
Since 2007: Member of the Board of Directors of Sick AG, Waldkirch (DE)
Since 2004: Member of the Logistik Hall of Fame
Since 1996: Member of the Board of Directors of Zeppelin GmbH, Friedrichshafen (DE)
Since 1988: Professor ordinarius for management, production and logistics at the Technische
Universität München, Munich (DE)
Since 1980: Managing Director of TCW Consulting GmbH, Munich (DE)
Marco Ghisalberti Laurea, Economia e Commercio, Istituto Universitario di Bergamo (IT)MBA, Boston University, Boston (US)Current activities
Since 2006: Managing Director of Rulli Rulmeca S.p.A., Bergamo (IT)
Since 1996: Member of the Board of Directors of Rulli Rulmeca S.p. A. and Rulmeca S.p.A.
Former activities
2000 – 2003: Senior managing positions within the Rulmeca Group  
1995 –1999: Regional sales manager Rulli Rulmeca S.p.A., Bergamo (IT)Ingo Specht
Professional qualifications as Industrial Business Manager of the Chamber of Commerceand Industry Cologne, Cologne (DE)Current activities
Since 2007: Managing Director of Interroll Ltd., Sant’Antonino (CH)Former activities
2003 – 2007: Head of Corporate IT, Interroll Management LTD., Sant’Antonino (CH)1998 – 2002: Vice President Corporate Development, Interroll (Schweiz) AG, Sant’Antonino (CH)1993 –1997: Owner and managing director of Luxis AG, Locarno (CH)1986 –1993: Deputy Managing Director of Interroll LTD., Sant’Antonino (CH)43

C o r p o r a t e
G o v e r n a n c e
I n t e r n a lo r g a n is a t i o n

6 I n t e r n a l o r g a n i s at i o n
The Board of Directors is responsible for strategic issues and performs high-ranking duties asregards the management, supervision and control of the executive members of the Interroll Group.
The Board of Directors comprises the Chairman, the Deputy Chairman and the remaining Members.
The Board of Directors is assisted by two permanent committees within the areas of auditing (Audit
Committee) and remuneration policy (Compensation Committee).
The Audit Committee receives the audit reports prepared by the external auditors and Group auditors, subsequently reporting on them to the Board of Directors. In particular, it satisfies itself that
the Group companies are also audited on a regular basis. At least once a year, the Audit Committee also commissions a report on audits undertaken and planned as well as on any proposals toimprove the auditing function. The Audit Committee submits its proposals to the Board of Directors
for decision.
The Compensation Committee sets the salary and bonus of the CEO and the Members of GroupManagement, as well as the compensation of the Board of Directors. At the beginning of theyear, it defines the targets to be attained for bonus payments to become applicable. In addition,
the Compensation Committee is responsible for establishing the terms of the share ownershipprogramme.
Both committees meet as necessary, and committee meetings can be convened by any member.
The members of the two committees are indicated in the report to the Corporate Governance of
the Interroll Group (see 5 Board of Directors – “Members of the Board of Directors”).
The Board of Directors is deemed quorate if an absolute majority of its members is present in person. Resolutions are adopted on the basis of an absolute majority of votes present. In the event of
an equal division of votes, the Chairman casts the deciding vote. All resolutions are recorded in
the minutes. The Board of Directors meets as often as business requires, but at least four times perannum.
The meetings are convened by the Chairman of the Board of Directors. Each member of the Boardof Directors may demand that a meeting be convened, specifying the item on the agenda to be
discussed. In the business year 2010, the Board of Directors met on six occasions, the Audit Committee three times and the Compensation Committee twice for regular scheduled meetings. The
Managing Directors of the respective functional units and of the Corporate Functions are invited toattend meetings when necessary.

44

C o m p e t e n c e

R e g u l a t i o n s/

C o r p o r a t e
G o v e r n a n c e
I n f o r m a t i o n
I n s t r u m e n t s

7 C o m p e t e n c e r e g u l at i o n sCompetences and controls are specified within a set of organisational regulations.
The Board of Directors has exercised its statutory authority to delegate management to third
parties who need not be shareholders (Group Management), reserving those duties which may
not be delegated or withdrawn.
In the provisions of the organisational regulations, the Board of Directors has delegated the
management of ongoing business to a Chief Executive Officer (CEO). The CEO is responsible forthe overall management of the Interroll Group and for all matters not falling under the purview
of another governing body, as specified by law, the Articles of Association or the organisational
regulations. In particular, the CEO is responsible for the operational management of the Company
as a whole.
Group Management consists of the CEO and the Managing Directors of the functional units andof the Corporate Functions, who report directly to him at the Company’s headquarters.

8 I n f o r m at i o n a n d c o n t r o l i n s t r u m e n t s
At each meeting, the CEO informs the Board of Directors of the course of business, the principal
events within the Group and the discharge of duties delegated to the Group Management.
The Management Information System (MIS) of the Interroll Group consolidates the balance sheet,income statement and cash flow statement, as well as financial data pertaining to the subsidiarycompanies, on a monthly basis and compares the current figures with those of the previous year
and the budget. On the basis of the quarterly financial statements, the budget is assessed in
the form of a forecast as to whether it is attainable with regard to each entity and also for the consolidated group. The financial reports (MIS) are discussed with the CEO at meetings of theBoard of Directors.
On behalf of the Audit Committee, internal audits are performed annually at selected subsidiarycompanies. The focal points of the audit are defined according to the risk profile of the respective
entity. The reports of the Audit Committee are discussed with the local management.
Extraordinary occurrences and decisions of material importance, as specified in the organisational
regulations, are immediately brought to the attention of all members of the Board of Directors inwriting.

45

C o r p o r a t e
G o v e r n a n c e
G r o u p
M a n a g e m e n t

9 Group Management
Members of the Group Management*
NameYear of birth
Nationality

Function

Since

Paul Zumbühl

1957
Switzerland

Chief Executive Officer (CEO)January 2000

Dr. Ralf Garlichs

1962
Germany

Managing Director Drives&Rollers

July 2006

Didier Lermite

1959
FranceManaging Director Dynamic Storage

November 2000

Dr. Heinrich Droste

1961
Germany

Managing Director Automation

January 2003

Jürg Häusermann

1961
Switzerland

Chief Financial Officer (CFO)

November 2000

Kwang-Heng Seng

1951
Singapore

Head of New Markets

April 1988

Lorenz Köhler

1959
Switzerland

Head of Corporate Communications

July 2001

Christian Hähni

1958
Switzerland

Head of Corporate IT

July 2007*  Please refer to “15 – New operational management structure” in the report to the corporate goverance of the Interroll Group

Professional background and vested interests of the Group Management
Paul Zumbühl
Dipl.-Ing., Lucerne university of applied sciences, Lucerne (CH)MBA, Joint University Program of the univ. in Boston, Berne, Shanghai
AMP, Kellog Business School of Northwestern University, Chicago (US)Marketing Management Diploma (Eidg. Dipl.)
Current activity
Since 2000: CEO of the Interroll Group
Further activities
Since 2009: Member of the Board of Directors, Looser Holding, Arbon/CH
Since 2007: Member of the Board of Directors, Schlatter Holding, Zurich
Former activities
1994 – 1999: CEO of Mikron Plastics Technology and member of the Executive Managment Board, Mikron Group, Biel (CH)1988 – 1994: Managing Director and further managing roles at the Sarna
Group, Sarnen (CH)1984 – 1987: Sales Manager/-Engineer at SYMALIT AG, Lenzburg (CH)46

C o r p o r a t e
G r o u p

G o v e r n a n c e
m a n a g e m e n t

Dr. Ralf Garlichs
Dr. Ing., Mech. Engineering, focus production eng., Univ. Hannover (DE)Current activity
Since 2011: Head of Products & Technology, Interroll Group
Former activities
2006 – 2010: Managing Director of “Interroll Drives & Rollers”,
Interroll Group
1999 – 2006: Managing Director of Reflex Winkelmann and further
managing positions at Winkelmann, Ahlen/Westfalen (DE)1994 – 1999: Head Production, Logistics, Festo Tooltechnic, Esslingen/DE
Didier Lermite
MBA and DESS (Diplôme Etudes Supérieures Spécialiées) majoring inmarketing and business management
Current activity
Since 2011: Managing Director of the Center of Excellence for Dynamic
Flow Storage systems, Interroll Group
Former activities
2000 – 2010: Managing Director of “Interroll Dynamic Storage”,
Interroll Group
1985 – 2000: Export Sales Manager of SIPA Rollers, La Roche-s.-Yon (FR)Dr. Heinrich Droste
Dr.-Ing., Mech. Engineering, focus materials handling, Univ. Hannover
Current activity
Since 2011: Managing Director of the Center of Excellence for
Subsystems, Interroll Group
Former activities
2003 – 2010: Managing Director of “Interroll Automation”, Interroll Group
1998 – 2003: Man. Director, Axmann Fördertechnik GmbH, Sinsheim (DE)1994 – 1998: Head Development, Mannesmann Dematic, Offenbach (DE)Jürg Häusermann
Diploma in Economics and Business Administration, HWV(majoring in Finance and Marketing)Current activity
Since 2000: Chief Financial Officer of the Interroll Group
Former activities
1997 – 2000: Division Controller, Segment Kitchen Technology,
FRANKE Group, Aarburg (CH)47

C o r p o r a t e
G o v e r n a n c e
G r o u p
m a n a g e m e n t

Kwang-Heng Seng
Bachelor of Science (Production Engineering) at Aston University (GB)Current activity
Since 2011: Operational Head Asia, Interroll Group
Former activities
1988 – 2010: Head of New Markets of Interroll Group
1988 – 2010: Managing Director Interroll (Asia) Pte. Ltd., Singapore (SG)1986 – 1988: Regional Manager, Guthrie (Singapore) Pte. Ltd., Singapore

Lorenz Köhler
Media Studies, University of Berne (CH)
Current activity
Since 2011: Event Manager and Senior Editor, Interroll Group
Former activities
2001 – 2010: Head of Corporate Communications, Interroll Group
1994 – 2000: PR and advertising assistant Europe, Middle & Far Eastof Jet Aviation Group, Zurich (CH)1990 – 1994: Copywriter and advertising Coordinator at a full service
advertising agency
Christian Hähni
Dipl. Masch.-Ing. FH
Executive MBA in Business Engineering, University of St. Gallen (CH)and Santa Clara University California (US)Current activity
Since 2007: Head of Corporate IT, Interroll Group
Former activities
2003 – 2007: CIO at Walter Meier Holding Ltd., Schwerzenbach (CH)1995 – 2003: Management Consultant at KPMG und SAPManagement contracts
There are no management contracts with third parties.

48

C o m p e n s a t i o n ,C o r p o r a t e
G o v e r n a n c e
s h a r h o l d i n gsa n d
l o a n s

1 0 C o m p e n s at i o n , s h a r e h o l d i n g s a n d L o a n s
Board of Directors
The Board of Directors determines on a yearly basis the level of compensation payable to its
members in accordance with their activities and responsibilities. The membership in committees is
not remunerated separatly. Extraordinary activities exceeding the normal activities of a memberof the Board of Directors may be compensated separately. The members of the Board of Directors
receive the total remuneration in cash. No variable portion is included in the total compensation.
No member of the Board of Directors participates in the existing share option plan. Any social costs
are borne by the employer.
Group Management
The target remuneration of each member of the Group Management consists of a fixed and of avariable portion. The variable portion is determined by the compensation committee in accordancewith the global responsibility, the complexity of the tasks and with the concrete and individual result contribution that adds value to the long term strategic developement of the Group. There exists
an individual remuneration agreement with each member of the Group Management. The variable
portion is determined in between 10 % and 60 %, depending on the function and on the generalbusiness performance. There are basically two criterias for the determination of the variable compensation portion of each member of the Group Management. On one hand, the total Group resultor the result for which the member is responsible, is considered. On the other hand, the performance of individual, qualitative aspects such as the launch of new products, the developement of
new markets or elselike is assessed. The basic key performance indicators for the Group are therevenue development, the increase in productivity and the EBIT.
The fixed portion of the compensation package is paid out in cash. The variable portion is paid
either fully or partly in cash or even paid out fully by the attribution of shares. The allowance type isindividually determined with each member of the Group Management. A part of the shares assigned may has a blocking period of three to five years.
In March 2006, the Group Management as also another fourty senior employees already holding
a senior postion at that date were granted the participation in a share option plan. The option life
ends on September 30th, 2013. The option cannot be executed before April 1st, 2012. Each option
entitles to subscribe for one Interroll share. The strike price is CHF 323 per share. The compensation of the difference between the market value at the exercise date and the strike price is impossible. The number of attributed shares was individually agreed with each Group Management
member, whereby the specific function within the Group Management was taken into account.
There are special pension fund regulations for some members of the Group Management. A member of the Group Management pays a fourth or a third respectively of the saving portion. The rest
is paid in by the employer. In addition, each member of the Group Management has a company
car at its disposal or a respective monthly allowance is paid out. Beyond that, no other significant
compensation is made.
Based on the proposal of the Compensation Committee, the Board of Directors annually determines the compensation of the Group Management. The total compensation for the CEO is proposedby the Compensation Committee. The total compensation for the other members of the Group Ma49

C o r p o r a t e
G o v e r n a n c e
C o m p e n s a t i o n/
S h a r e h o l d e r s ’

p a r t ici p a t i o nr ig h t s

nagement is proposed by the CEO and presented annually to the Compensation Committee forauthorisation. If a member does not achieve the agreed performance due to external facts beyond
his influence, the Compensation Committee can exceptionnally deviate from the compensationagreement in favour of the member of the Group Management.
Occasionally, external support and/or international compensation benchmark studies may bereferred to for the definition of compensation packages.

1 1 S h a r e h o l d e r s ’ P a r t i c i p a t i o n Rig h t s
Representation and restriction of voting rights
Rights governing shareholder participation are in accordance with the requirements specified within
the Swiss Code of Obligations. Each share issued has one vote. A shareholder’s voting rights are
restricted to a maximum of 5 % of the total number of votes. Individual nominees, however, areentitled to exercise more than 5 % of the total votes if they disclose the identity of the beneficiaries
they represent and if the respective beneficiaries as a whole do not exercise more than 5 % of thevoting rights. This restriction of voting rights does not apply to the founding families, insofar as
the individual families hold at least 10 % of the share capital. Registered shares of nominees thatexceed 2 % of the shares outstanding are only listed in the Register as shares fur nished withvoting rights if the nominee has provided written consent to the possible disclosure of names,
addresses and shareholdings of those persons for whom the said nominee holds 0.5 % or moreof the shares outstanding. There is no statutory group clause.
Statutory quorum
Subject to contrary statutory or legal provisions, the General Meeting of shareholders is quorate
irrespective of the number of shareholders present and the shares represented by proxy.
Convocation of General Meeting of Shareholders
The invitation to the General Meeting of Shareholders is issued at least twenty days prior to the
Meeting and is legally effective upon inclusion in the Company’s chosen vehicle of communication(“Schweizerisches Handelsamtsblatt”). In addition, the Board of Directors sends a written invitation
to those registered shareholders listed in the share register.
Agenda and inscriptions in to the share register
The invitation to the General Meeting of Shareholders shall include all items on the agenda as well
as all motions put forward by the Board of Directors and, if applicable, by the shareholders who
have called for a General Meeting or the inclusion of an item on the agenda. No resolutions shallbe passed on motions relating to items which have not been announced in the requisite manner,with the exception of those motions relating to the convocation of an Extraordinary Meeting of
Shareholders or the execution of a special audit. No entries are made into the share register lessthan 10 days prior to a General Meeting of Shareholders up to the day subsequent to the General
Meeting of Shareholders.

50

C h a n g e so f

C o n t r o l ,C o r p o r a t e
G o v e r n a n c e
D e f e n c e
M e a s u r e s/
A u d i t o r

12 Changes of control, defence measures
There are no statutory rules in relation to “opting up” and “opting out”. Furthermore, there are noseverance compensations agreed or any other agreements and plans in place that would apply in  
the case of a change in control.

13 Auditor
Duration of the mandate and term of office of the lead auditor
Since the IPO of Interroll in the year 1997, the consolidated financial statements of the Interroll
Group and the individual financial statements of INTERROLL HOLDING LTD. have been audited
by KPMG AG of Lugano (CH). A new auditor in charge took the responsibility for the Group audit
as from mid 2010.
Audit fees
The audit fees paid by the Interroll Group to KPMG amounted to CHF 0.47 million in 2010 while inthe year 2009 CHF 0.58 million was paid.
Additional fees
In 2010, KPMG branch offices received a total of CHF 0.2 million (2009: CHF 0.45 million) for tax
and other consulting services.
Supervisory and control instruments pertaining to the audit
The Audit Committee is responsible for evaluating the external audit. The external auditors prepare
an audit report to be submitted to the Board of Directors. At least two consultations are held eachyear between the external auditors and the Audit Committee. Material findings for each entity (Management Letters) as well as for the consolidated accounts are presented in the “Comprehensive
Auditor’s Report to the Board of Directors” which is discussed in detail.

51

C o r p o r a t e
G o v e r n a n c e
I n f o r m a t i o n
p o l ic y

1 4 I n f o r m at i o n P o l i c yInterroll is committed to providing swift, transparent and simultaneous information for all stakeholders. To ensure that, the CEO is available as a direct contact person.
The Interroll Group publishes comprehensive financial results twice a year: for the first half and forthe financial year as a whole. In addition to the financial results that are carried out in accordancewith IAS/IFRS, shareholders and financial markets are regularly kept informed of significant changes and developments.
Further relevant information is available under http://interroll.com/ir. Financial reports may also be
downloaded as pdf-documents from http://interroll.com/en/investor_relations/financial_reports/.
These reports (half-year and annual report) are sent as a hardcopy to all shareholders on the publication date.

52

N e wo p e r a t i o n a l

C o r p o r a t e
G o v e r n a n c e
M a n a g e m e n t
S t r u c t u r e

1 5 N e w o p e r at i o n a l m a n a g e m e n t s t r u c t u r e
As per end of October 2010, the Interroll Group announced the reorganisation of its management
structure with effect beginning of 2011.
The Interroll Group’s new global sales organisation is consequently geared towards specific customer groups and their needs. Customer categories include system integrators, original equipment
manufacturers and end users that can either be global corporations or local businesses. Industrial
management will be established to handle the markets of airport logistics, postal services, foodprocessing and warehousing/distribution.
The new worldwide sales organisation will be overseen by the Head of “Global Sales & Service”.
Interroll’s Centers of Excellence and production plants will be managed through the “Products& Technology” division. The division’s main activities that are managed by the Head of “Products& Technology” include the Centers of Excellence, research and development, global productmanagement, strategic purchasing, production technology and global production.

Board of Directors
Chairman
Kurt Rudolf

Vice chairman

Audit Committee

Compensation Committee

Other members

Urs TannerPhilippe Dubois

Kurt Rudolf

Marco Ghisalberti

Paolo Bottini

Prof. Dr. Horst Wildemann

Ingo Specht

Group Management
Chief Executive Officer
Paul Zumbühl

Chief Financial Officer

Corporate Marketing

Jürg Häusermann

Jens Karolyi

Corporate IT
Christian Hähni
Global Sales & Service

Products & Technology

Dr. Christoph Reinkemeier

Dr. Ralf Garlichs

Regions
Operational Head Americas		Tim McGill
Operational Head Asia			Kwang Heng Seng

53

C o r p o r a t e
G o v e r n a n c e
N e wo p e r a t i o n a l
m a n a g e m e n t

s t r u c t u r eInterroll Research Center (IRC), Global Product Management
The Interroll Research Center (IRC) developes in close cooperation with the Centers of Excellence,with the global product management as well as with Global Sales new products, techniques andtechnologies.
Product GroupManaged byCompany

Research & Development

Gerhard FröbusInterroll Holding GmbH, Wermelskirchen (DE)Global Product Management

Dietmar Hager

Interroll Holding GmbH, Wermelskirchen (DE)Global Centers of Excellence
The seven Centers of Excellence are worldwide responsible for product developement, for strategic purchasing and for the application and development of production technologies for selected
products. Furthermore, they produce for the region Europe and supply semi-finished goods togroup companies from overseas. The global Centers of Excellence of the Interroll Group are managed by the following persons:Product GroupManaged byCompany

Rollers, Roller Drives

Armin LindholmInterroll Engineering GmbH, Wermelsk. (DE)

Industrial Drum Motors

Helmut LeuverInterroll Trommelmotoren GmbH, Baal (DE)Supermarket products

Dr. Anders Staf Hansen

Interroll Joki A/S, Hvidovre (DK)

Flow storage productsDidier Lermite

Interroll SAS, La Roche sur Yon (FR)Conveyor modules

Michael Kuhn

Interroll Automation GmbH, Sinsheim (DE)

Subsystems

Dr. Heinrich Droste

Interroll Automation GmbH, Sinsheim (DE)Polymer parts

Ingo Specht

Interroll AG, Sant’Antonino (CH)

HoldingGlobal Centers of Excellence
Sales/Production
Agents/Distributors
54

N e wo p e r a t i o n a l

C o r p o r a t e
G o v e r n a n c e
M a n a g e m e n t
S t r u c t u r eWorldwide sales and production companies
Sales and service subsidiaries
Sales companies penetrate pre-defined market and customer segments with the full range ofInterroll products. As well, they ensure a twenty-four hour repair service.
Production companies
Under given conditions of the centers of Excellence, production companies produce and assemble merely for their regional markets. Thereof, they concentrate on specific product groups within
the full product range of Interroll.

The management of the sales and service subsidiaries and of the sales regions was assigned to
the following persons:

Function

Region/country

Managed by

Sales and Service

Central Europe

O. Schopp

Interroll Fördertechnik GmbH, Wermelskirchen (DE)EuropeSales and Service

FranceG. Calvez

Interroll SAS, Saint-Pol-de-Léon (FR)Middle East

Sales and Service

Northern Europe

E. KaiserInterroll Nordic A/S, Hvidovre (DK)

Sales and Service

Great Britain/Ireland

Ch. Middleton

Interroll Ltd., Corby (GB)Sales and Service

Iberic peninsula

R. RoviraInterroll España SA, Cerdanyola del Vallès (ES)Sales

Czech Republic, Middle East

F. Ratschiller

Interroll CZ s.r.o., Breclav (CZ)

Sales and Service

Poland, Russia, Ukraine

F. Ratschiller

Interroll Polska sp.z.o.o., Warsaw (PL)Sales and Assembly

AfricaR. MeyInterroll SA (Proprietary) Ltd., Johannesburg (ZA)

Sales and Production

Special projects

H. LeuverTranstechnik GmbH, Wassenberg (DE)Sales and Production

North America

R. KeelyInterroll Corporation, Jeffersonville (US)Sales and Production

North America

S. CwiakInterroll Automation LLC, Jeffersonville (US)

Production

North america

C. Brown

Interroll Dynamic Storage, Inc., Hiram/Atlanta (US)Sales and Production

CanadaS. Gravelle

Interroll Canada Ltd,. Newmarket/Toronto (CA)Sales and Production

AmericaS. Gravelle

Interroll Components Canada Ltd,. Concord/Toronto (CA)Sales and Production

Brazil, Argentina

D. HahnInterroll Logística Ltda., São Paulo (BR)Sales and Production

China

S. Foong

Interroll (Suzhou) Co. Ltd., Suzhou (CN)Asia

Sales and Service

South Korea

S. SuhInterroll Korea Corp. Seoul (KR)

Pacific

Sales and Service

Japan

H. Kawazoe

Interroll Japan Co. Ltd., Tokyo (JP)Sales and Assembly

ThailandN. Grisorn

Interroll  (Thailand) Co. Ltd., Panthong (TH)Sales and Service

Singapore, South East Asia

G. W. Seng

Interroll (Asia) Pte. Ltd, Singapore (SG)Sales and Assembly

Australia

P. CieriInterroll Australia Pty. Ltd,. Melbourne (AU)

AfricaAmericasCompany55

F i n a n c i a l
R e p o r t
I n t e rr o l l
G r o u p

Financial Reportof Interroll GroupTo the shareholders’ meetingo f IN T ERROLL HOLDING L T D .

Business year 2010
M a r c h 3 rd, 2 0 1 1Content
Financial statements of Interroll Group60

Notes to the financial statement of Interroll Group64

Financial report of INTERROLL HOLDING LTD.

124
57

F i n a n c i a l

R e p o r t :C o n t e n t
I n t e rr o l l
G r o u p

Financial Report
Content
1

Consolidated financial statements of Interroll Group

60

1.1

Consolidated statement of financial position

60

1.2

Consolidated income statement

61

1.3

Consolidated statement of comprehensive income

61

1.4

Consolidated statement of cash flows

62

1.5

Consolidated statement of changes in equity

63

2

General notes to the financial statements

64

2.1

Basis of the consolidated financial statements

64

2.2

Critical accounting estimates and judgments

66

2.3

Principles of consolidation and valuation

67

3

Risk management79

3.1	Operational and strategic risk management

79

3.2

Financial risk management

794Changes to the scope of consolidation

82

5

Segment information

84

6	Notes to the consolidated statement of financial position

87

6.1

Movements of property, plant and euipment

87

6.2

Movements of goodwill and intangible assets

88

6.3

Assets pledged or assigned

90

6.4

Inventories

90

6.5	Trade and other accounts receivable

91

6.6

Cash and cash equivalents

93

6.7

Financial instruments

94

6.8

Financial risks

95

6.9	Equity management100

6.10 Information on shareholder's equity

100

6.11	Earnings per share101

6.12 Financial liabilities102

6.13 Leasing liabilities

104

6.14 Provisions

105

6.15 Pension obligations and pension costs

106

6.16	Trade and other accounts payable108

7	Notes to the consolidated income statement

109

7.1

Personnel expenses

109

7.2

Research and development

110

7.3	Other operating expenses

111

7.4	Other operating income

111

7.5

Financing result

112

7.6

Income tax expense

113

8	Other disclosures to the financial statements

116

8.1

Contingent liabilities and other commitments

116

8.2

Related party transactions

116

8.3

Subsequent events

118

8.4

Scope of consolidation

118

9

Report of the Group auditor

120

59

F i n a n c i a l
I n t e rr o l l

1
1.1

R e p o r t :G r o u p

S t a t e m e n to f

F i n a n c i a l

P o s i t i o n

C ONSOLIDA T ED FINAN C IAL S T A T EMEN T S OF IN T ERROLL
Consolidated statement of financial positionseenotes*

31.12.2010

Property, plant and equipment

6.1

82 94585 579Intangible assets

6.2

37 98839 525912

923

in thousands CHF

in %31.12.2009

in %ASSE T S

Financial assets
Deferred tax assets

7.6

821
122 666

Total non-current assets

202
58.1

126 229

Assets held for sale

6.1

1 088

1 300

Inventories

6.4

31 51038 092650

1 711
39 974Current tax assets
Trade and other accounts receivable

6.5

45 239Cash and cash equivalents

6.6

10 110

58.5

8 387

Total current assets

88 59741.9

89 464

41.5

Total assets

211 263100.0

215 693

100.0

E Q UI T Y AND LIA B ILI T IES
Share capital

8 540

12 810Group reserves

158 918140 636

Translation reserve–40 001

Total equity

127 457

6.12

5 600

1 444

Deferred tax liabilities

7.6

10 58010 476

Provisions

6.14

7 298

Non-current financial liabilities

Total non-current liabilities
Current financial liabilities

23 478
6.12

Current tax liabilities
Trade and other accounts payable

6.16

60.3

133 024

61.7

6 303
11.1

18 22317 38811 118

5 805

6 359

37 135

8.4

46 969Total current liabilities

60 32828.6

64 446

29.9

Total liabilities

83 806

39.7

82 66938.3

Total liability and shareholder’s equity

211 263100.0

215 693

100.0* See notes to the consolidated financial statements.

60–20 422

6.9 – 6.11

F i n a n c i a l

1.2

R e p o r t :( C o m p r e h e n s i v e )I n c o m e
s t a t e m e n t
I n t e rr o l l
G r o u p

Consolidated income statementin thousands CHF

see notes*

Net Sales
Material expenses

2010

in %

2009

in %

283 069

100.0

233 987

100.0–115 808–40.9–98 749–42.2

7.1 & 6.15

–84 281–29.8–81 522–34.8–3 400

–1.2

4 621

2.0

Other operating expenses

7.3–53 509–18.9–48 129–20.6

Other operating income

7.4

9 692

3.4

8 620

3.7

35 763

12.6

18 8288.0–10 912–3.9–10 856–4.6

24 851

8.8

7 972

3.4

–4 464–1.6–4 870–2.1

Operating result (EBIT)

20 387

7.2

3 102

1.3

Financing expenses–1 550–0.5–3 152–1.3

Financing income

1 589

0.6

1 743

0.7

39

0.0

–1 409–0.6

20 426

7.2

1 693

0.7

Personnel expenses
Increase/(Decrease) in work in progress,
finished products and own goods capitalized

Operating result before depreciation
and amortisation (EBITDA)
Depreciation

6.1

Operating result before amortisation (EBITA)
Amortisation

Financing result, net

6.2

7.5

Result before income taxes
Income tax expense

7.6–6 003

–2.1

4 023

1.7

6.11

14 423

5.1

5 716

2.4

Basic earnings (result) per average share oustanding

6.11

18.59

Diluted earnings (result) per average share outstanding

6.11

18.59

7.41

Paid out reduction of par value in the year under review

5.00

5.00

Distribution out of reserves from capital contributions: 2010

5.00

–

ResultValues per share (in CHF)

1.3

7.41

Consolidated statement of comprehensive income

Result14 423Currency translation differences

5 716–19 579

787

Realised currency translation differences–

659

Changes in the fair value of cash flow hedges, net–

116

Net change in fair value of cash flow hedges transferred
to result––344

Other comprehensive income, net of taxes–19 579

1 218

Total comprehensive income for the period–5 1566 934* See notes to the consolidated financial statements.

61

F i n a n c i a l
I n t e rr o l l

1.4

R e p o r t :G r o u p

s t a t e m e n to f

c a s hf l o w s

Consolidated statement of cash flows

in thousands CHF

see notes*

Result2009

14 4235 716
15 726

Depreciation, amortisation and impairment

6.1 & 6.2

15 376

Loss/(gain) on disposal of tangible and intangible assets

7.3 & 7.4

488

398

Financing result, net

7.5

–39

1 409

Income tax expense

7.6

6 003

–4 023

Changes in inventories
Changes in trade and other accounts receivable
Realised cash flow hedges
Changes in trade and other accounts payable
Changes in provisions, net

6.14

Income tax paid
Personnel expenses on share based payments

7.1

2 530

3 451

–10 583

16 862––228–5 307–3 6091 807–1 481–4 858–13 195

1 234

596

Other non-cash (income)/expenses–2 385–1 234

Cash flow from operating activities

18 68920 388Acquisition of property, plant and equipment

6.1–19 823–16 492

Acquisition of intangible assets

6.2–7 591–6 367–171–172

Proceeds from disposal of property, plant and equipment

189

964

Settlement of loans receivable

107

3

–

–4 646

Acquisition of financial assets

Acquisition of subsidiaries, net of cash acquired

4Interests received

105

311

Cash flow from investing activities–27 184–26 399

Free cash flow

–8 495–6 011

Reduction of par value–3 884–3 859

Sale of own shares

2 163

–

Proceeds from financial liabilities

13 453

4 463

Repayment of financial liabilities–315–7 693

Interests paid
Cash flow from financing activities

–474

–775

10 943–7 864

Translation adjustments on cash and cash equivalents

–725

630

Change in cash and cash equivalent

1 723–13 245

8 387

21 63210 110

8 387

Cash and cash equivalent at January 1
Cash and cash equivalent at December 31* See notes to the consolidated financial statements.

62

2010

6.6

F i n a n c i a l

1.5

R e p o r t:

s t a t e m e n t

o f

c h a n g e s
i n
t h e
e q u i t y
I n t e rr o l l
G r o u p

Consolidated statement of changes in equity

in thousands CHF

see notes*

Balance at January 1, 2009

Share
CapitalReserve
Share for own
Premium shares

Translation
Reserve

Hedging
Reserve

Retained
Earnings

Total equity

17 08029 848 –34 652–21 868228

140 095

130 731

5 716

5 716

ResultTranslation adjustments
Realised translation differences

7.5

787

787

659

659

Eff. portion of changes in thefair value of cash flow hedges

116

116

Net change in fair value of cash
flow hedges transferred to result

–344

–344

Total other comprehensive
income, net of taxes

–

–

–

1 446

–228

–

1 218

Total comprehensive income

–

–

–

1 446

–228

5 716

6 934

411

–3 8597.1 & 7.6

–420

1 016

596

6.10

–1 640

4

–233

495

590

344

Reduction of par value
Share based payments
Withholding tax
on share buybacks
Payment of acquistion costswith own shares–4 270Transfers
Balance at December 31, 200912 810–1 64028 145 –32 386

262–20 422–

Result–934–

144 877

133 024

14 423

Translation adjustments–19 579

14 423–19 579

Total other comprehensive
income, net of taxes

–

–

–

–19 579–––19 579

Total comprehensive income

–

–

–

–19 579–

14 423–5 156386–3 884

7.1 & 7.6

325

909

1 234

4

–893

3 132

2 239

–4 270

Reduction of par value
Share based payments
Sale of own sharesincl. tax effects
Balance at December 31, 2010

8 540

27 577 –27 959–40 001–

159 300

127 457* See notes to the consolidated financial statements.

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G r o u p

2

2.1

t o

t h e

f i n a n c i a ls t a t e m e n t s

G e n e r a l i n f o r m a t i o n t o t h e f i n a n c i a ls tat e m e n t s
Convention of preparation

General notes to the convention of preparation
The 2010 consolidated financial statements of Interroll Group are based on the annual financial
statements of INTERROLL HOLDING LTD., Sant’Antonino and its subsidiaries as of December 31,
2010, drawn up according to uniform Group accounting principles. The consolidated financial
statements present a true and fair view of the consolidated financial position, results of operations
and cash flows in accordance with the International Financial Reporting Standards (IFRS) andcomply with Swiss law.
The consolidated financial statements are based on historical cost except for marketable securities, investments not involving significant influence and derivative financial instruments, which arestated at fair value.
The preparation of financial statements in conformity with IFRS requires management to makejudgments, estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. These judgments, estimates and assumptions are based on historical experience and other factors that are believed to be reasonable under the given circumstances. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects bothcurrent and future periods.
Judgments made by management in the application of IFRS that have a significant effect on the
consolidated financial statements and estimates with a significant risk of material adjustment in thenext years are disclosed under “2.2 – Critical accounting estimates and judgments”.
In contrary to the financial report of 2009, the consolidated income statement and the consolidated
statement of comprehensive income are disclosed in two separated parts.

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t o

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f i n a n c i a ls t a t e m e n t s
I n t e rr o l l
G r o u p

Revised IAS/IFRS standards and interpretations
The Group’s results are in line with IAS/IFRS standards and interpretations. Thus, the Group regularly monitors theamendments and new standards published by the International Accounting Standards Boards (IASB). In the course of
the business year 2010, the following amendments resp. new standards and interpretations were enacted. Amendments with no or minor impact on the Group’s result nor financial condition are summarised at the end of the following
table.
Standard/Interpretation

Enactment

Relevance for Interroll

IFRS 3 (revision):Jan– 08

The amendment requires transaction costs of business com-Business Combinations

Introduction

Jan– 10

binations to be expensed through the income statement. Payments to purchase a business are to be recorded at fair value
at the acquisition date.

Amendments to IFRS 1, IFRS 2, IFRS 5, IAS 27, IAS 32, IAS 39, IFRIC 17 and the improvement project 2010 of the IASB
were adopted but had only a minor impact on the Group’s financial statement or even were not relevant for the Group.
Future new or revised IAS/IFRS standards and interpretations
The following new or revised standards and interpretations were enacted before the balance sheet date but will comeinto force later. Interroll does not early adopt thes standards and interpretations in its consolidated financial statements.
The following adoptions could be relevant for the Group’s financial statements:
Standard/Interpretation

Enactment

Relevance for Interroll

IFRS 9 (new):Nov– 09

IFRS 9 is the first standard issued as part of a wider project toFinancial instruments

Introduction

Jan– 13

replace IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement
categories for financial assets: amortised cost and fair value.
The basis of classification depends on the entity’s businessmodel and the contractual cash flow characteristics of the financial asset. The Group currently evaluates potential impacts of the new standard onto the financial results and condition of the Group.

The Group Management does not expect significant impacts on the consolidated financial statements for the amendments to IAS 24, IAS 32, IFRS 1, IFRIC 14/IAS 19, IFRIC 19 as well as the improvements to IFRS’s 2010. The amendments may result in additional disclosures.

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I n f o r m a t i o n
I n t e rr o l l
G r o u p

2.2

t o

t h e

f i n a n c i a ls t a t e m e n t s

Critical accounting estimates and judgments

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates can, by definition, deviate from the actual outcome. The estimates and assumptions thathave a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial years are discussed below.
a) Income tax expense	The Holding company and its subsidiaries are subject to income taxes. Significant judgment isrequired in determining the required worldwide provision for current and deferred income taxes
and the realization of tax losses carried forward. There are many transactions and calculations
made for which the final tax determination is uncertain in the year under review. Where final tax
assessments or tax audits of such matters are different from the amounts that were initially recorded, such differences may materially impact assets, liabilities, income tax and deferred tax provisions in the period in which such determination is made. The relevant figures are outlined innote 7.6.
b) Recoverable amount of goodwill, patents and licenses
	The assessment of the recoverable amount of goodwill and other intangible assets is, by definition, subject to uncertainties regarding expected future cash flows. It requires making assumptions and calculating parameters, whose adequacy will only turn out in the future. We refer tocomments made under note 6.2 that also include the relevant carrying amounts.
c) Personnel related provisions
	The assessment of provisions and pension liabilities is, by definition, subject to uncertainties regarding future cash flows. It requires making assumptions and determining parameters, whose
adequacy will only become clear in the future. We refer to comments made under notes 6.14
and 6.15, which also include the relevant carrying amounts.

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2.3

I n f o r m a t i o n

t o

t h e

f i n a n c i a ls t a t e m e n t s
I n t e rr o l l
G r o u p

Principles of consolidation and valuation

General notes to the principles of consolidation
The consolidated financial statements of INTERROLL HOLDING LTD. include the parent company’s
financial statements and the financial statements of all directly or indirectly held Swiss and foreignsubsidiaries where the parent company holds more than 50 % of the voting rights or effectively exercises control through other means.
The full consolidation method is applied, whereby the assets, liabilities, income and expenses are
fully incorporated. The proportion of the net assets and net income attributable to minority shareholders is presented separately as minority interest in the consolidated statement of financial position,
the consolidated income statement and the consolidated statement of comprehensive income.
Accounts payable to, accounts receivable from, income and expenses between the companies included in the scope of consolidation are eliminated. Intercompany profits included at year end in inventories of goods produced are also eliminated.
Subsidiaries acquired during the year are included in the consolidated financial statements fromthe date on which control is obtained, while subsidiaries sold are excluded from the consolidated financial statements from the date on which control is given up. The capital consolidation at acquisition date is effected on the purchase method. The acquisition price for a business combination isdefined by the sum of assets and liabilities acquired or incurred, measured at fair value, and of thesum of equity instruments issued. Transactions costs related to a business combination are expensed. The goodwill resulting from such business combination is to be recognized as an intangible asset. It corresponds to the excess of the sum of the acquisition price, the amount of minority
participations of the entity acquired, the fair value of equity instruments held already held before
over the balance of assets, liabilities and contingent liabilities at fair value. For the valuation of minority participations there are options per transaction. Either the minority participation is valued atfair value or based on the proportion of the net assets acquired at fair value related to the minority
participation. An eventual bad will is immediately recognized in the income statement after reviewof the fair value of the net assets acquired. The goodwill is subject to a yearly impairment test or
even before if indications for an early impairment test exist.
Changes in the amount of holding which do not result in a loss of control are considered to betransactions with equity holders. Any difference between the acquisition price paid resp. the consideration received and the amount, by which the minority participation value is adjusted, is recognized in the equity.

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f i n a n c i a ls t a t e m e n t s

Investments in associates are investments where the parent company is either (directly or indirectly)
entitled to 20 % to 50 % of the voting rights or has considerable influence through other means. Investments in associates are accounted for by applying the Equity Method. Under this method, theinvestment is initially recorded at the purchase price and subsequently increased or decreased by
the share of the associate’s profits or losses incurred after the acquisition, adjusted for any impairment losses. The Group’s share of results of associates is recognised in the statement of comprehensive income under share of profit and loss of associates. Goodwill included in the purchase price, representing any excess of consideration over the Group’s share in net assets of the associate,
is recognised as part of the investment’s carrying amount. Dividends received during the year reduce the carrying amount of such investments.
Investments of less than 20 % are not consolidated but stated at their estimated fair value. Such investments are presented under financial assets and classified as assets held for sale. Any fair value
adjustments are recognised in retained earnings and are recycled in the income statement or statement of comprehensive income only at the date of disposal or when impairment arises.
Foreign currency translation
The consolidated financial statements are presented in Swiss Francs (CHF). All assets and liabilitiesof the consolidated foreign subsidiaries are translated using the exchange rates prevailing at theclosing date. Income, expenses and cash flows are translated at the average exchange rates forthe year under review. The foreign currency translation differences resulting from applying different
translation rates to the statement of financial position, the income statement and the statement ofcomprehensive income are added to or deducted from the line translation reserve of the equity. The
same principle is applied for those resulting from the translation of the subsidiaries’ opening net asset values at year end rates and those arising from long term intercompany loans (net investment
approach).
Transactions in consolidated entities where the transaction currency is different from the functional
currency of the entity are recorded using exchange rates prevailing at the time of the transaction.
Gains or losses arising on settlement of these transactions are included in the income statement.
Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates prevailing at year end (closing date). Any gains or losses resulting from this translation are also recognized in the income statement.

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f i n a n c i a ls t a t e m e n t s
I n t e rr o l l
G r o u p

The following most important exchange rates were used for the translation of financial statements
denominated in foreign currencies:
Income Statement

Balance sheet(average rates)(Year end rates)

2010

2009

31.12.2010

31.12.2009

1 EUR

1.373

1.509

1.252

1.484

1 USD

1.040

1.084

0.934

1.029

1 CAD

1.007

0.954

0.939

0.982

1 GBP

1.602

1.695

1.458

1.664

1 SGD

0.765

0.746

0.728

0.734

1 CNY

0.154

0.159

0.142

0.151

1 JPY

0.012

0.012

0.012

0.011

1 THB

0.033

0.032

0.031

0.031

Current/Non-current distinction
Current assets are assets expected to be realised within one year or consumed in the normal course of the Group’s operating cycle or assets held for trading purposes. All other assets are classified as non-current assets.
Current liabilities are liabilities expected to be settled by use of cash generated in the normal course of the Group’s operating cycle or liabilities due within one year from the reporting date. Thesealso include short term borrowings made as part of credit limits granted for an indefinite period,
but subject to a termination period of less than one year from reporting date. All other liabilities areclassified as non-current liabilities.
Intercompany transactions
Group internal transactions across segments as well as across legal units are performed at arm’s
length. Such transactions are eliminated in the consolidation of the Group.

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I n f o r m a t i o n
I n t e rr o l l
G r o u p

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f i n a n c i a ls t a t e m e n t s

Cash and cash equivalents
Cash and cash equivalents include cash on hand, postal and bank accounts, as well as credit balances payable on demand and deposits with a residual maturity of not more than 90 days at acquisition date. These balances are stated at nominal value.
Statement of cash flows
The statement of cash flows presents, net of any foreign exchange rate effects, cash flows during
the year classified by operating, investing and financing activities, thereby providing information
about the changes of cash and cash equivalents during the reporting period. Cash equivalents
are held for the purpose of meeting the Group’s short term cash commitments rather than for investment or any other purposes.
Net cash from operating activities is determined using the indirect method, whereby the net result
for the year is adjusted for:a) effects of transactions of non-cash nature;b) deferrals or accruals of past or future operating cash receipts or payments;c) items of income or expense associated with investing or financing cash flows.
The effect of foreign exchange rate changes on cash and cash equivalents in foreign currencies isdisclosed separately.
Trade and other accounts receivable
Trade and other accounts receivable are stated at amortised cost, generally equalling nominal value. The amount of valuation adjustments corresponds to the difference between the carrying
amount and the net present value of the future estimated cash flow. The valuation adjustments include individual impairment for specifically identified positions, where indication exists that the outstanding amount might not be fully recovered.
Lump sum impairment covers expected losses that cannot be excluded based on historical dataand payment statistics. As soon as sufficient evidence is available that the receivable will definitively not be recovered, the related amount is directly written off and offset with the specific individual impairment respectively.
Marketable securities
Marketable securities are stated at their fair value as of balance sheet date. Unrealised gains andlosses are included in the financing result.

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f i n a n c i a ls t a t e m e n t s
I n t e rr o l l
G r o u p

Inventories
Inventories are stated at the lower of cost (purchase price or Group production cost) and net realisable value. The cost of inventories is calculated using the weighted average method. Production
overheads are allocated to inventories on a proportional basis. Slow moving goods and obsolete
stocks are impaired. Intercompany profits included in inventories are eliminated by affecting net
result.
Property, plant and equipment
Property, plant and equipment are stated at cost less operational accumulated depreciation andany impairment losses. Non-current assets acquired by way of finance leases are recognised at
the lower of the present value of future minimum lease payments and fair value, and depreciatedaccordingly. The related leasing liabilities are presented at their present value.
Depreciation is recognised on a straight-line basis over the estimated useful life and considering a
potential residual value. The following useful economic life terms apply to the Group's main asset
categories:
Buildings 					25 years

Machinery 					10 years

Vehicles 						5 years

Office machines and furniture

5 years

Tools and moulds			

5 years

IT infrastructure				3 years

Components of major investments in fixed assets with different estimated useful lives are recognised separately and depreciated accordingly. Estimated useful lives and estimated residual values
are revised on a yearly basis as per reporting date and resulting adjustments are recorded in theincome statement.
Assets under construction which completion has not yet been concluded or which cannot be used
yet are capitalised based on incurred costs as per closing date. Respective depreciation is recognised when the construction can be used.
Interests directly related to the acquisition or construction of property, plant and equipment is capitalised and allocated to the related asset.

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f i n a n c i a ls t a t e m e n t sIntangible assets
Intangible assets include goodwill, intangible assets purchased in the course of business combinations (patented and unpatented technology, customer relationship), licenses and patents andsimilar rights acquired from third parties as well as software acquired from third parties. These assets are stated at cost value. If their useful life can be reliably estimated, they are amortised on astraight-line basis over the following, expected useful life time:Standard software 			

3

years

ERP – Software 				

8

years

Customer relationship 			

5 – 10 years

Patents, technology and licenses 6

years

Acquired customer relationship are customer values identified within the scope of IFRS 3. They areamortised based on their estimated melt off being a period of 6 – 10 years. In markets in which Interroll holds a solid market position, customer value is amortised over 10 years. A shorter amortization period is defined in markets with stiff competition.
Patents and technical know-how are amortised over their expected useful life. In view of the innovative market- and competition environment the amortization period has been determined to be 6
years.
Furthermore intangible values acquired within business combination may be identified. Such result
from individual contractual agreements. These values are amortized over the period deviated fromthe contractual agreement.
Goodwill and intangible assets with an indefinite useful life are allocated to specific cash generating units in order to allow the identification of possible impairment. Such impairment tests are carried out on a yearly basis and any impairment is recognised in the income statement. Goodwill arising from the acquisition of a foreign entity is attributed to that entity’s net assets and reported in
the functional currency of that entity being translated to the Group’s reporting currency at the year
end rate.
Financial assets
Financial assets mainly comprise loans receivable that are stated at amortised cost less any valuation allowance. The recognition of interest income is based on the effective interest rate method.
Moreover this item includes investments of less than 20 %. They are stated at their estimated fairvalue. Any fair value adjustments are recognised in the equity and are recycled in the income
statement only at the date of disposal or when impairment arises.

72G e n e r a l

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I n t e rr o l l
G r o u p

Impairments
The carrying value of long term non-financial assets except assets from retirement benefits andassets from deferred taxes are assessed at least once a year. If indications for a sustainable impairment exist, a calculation of the realizable value is performed (impairment test). Goodwill, otherintangible assets with an indefinite useful lifetime and intangible assets which are not yet available
for use, the net realizable value is calculated regardless of the existence of indications. If the carrying value of such an asset or the cash generating unit to which such an asset belongs to exceeds the net realizable value an adjustment is recognized through the income statement. Impairments on a cash generating unit or a group of cash generating units are first adopted on the
goodwill and are thereafter proportionally split onto the other assets of the unit (or the Group).
The net realizable value is the higher value of fair value less selling costs and value in use. The
estimated future discounted cash flows are evaluated to determine the value in use. The discounting rate applied corresponds to a pre-tax rate which reflects the risk related the assets. If an asset
does not largely generate independent cash flows the net realizable value of the cash generating
unit is calculated to which the asset concerned belongs to.
Impairments on the remaining assets are reversed if the estimations made in the calculation of the
net realizable value have changed and either has resulted in a reduction of the impairment amountor no impairment is required anymore. An appreciation in value of the goodwill may not be performed.
Fixed assets held for saleTangible assets or a group of assets are classified as “assets held for sale” if their carrying value
will most probably be realised in a divestment transaction rather than by being used in the normal
course of business. Such assets are brought actively onto market and should be sold within one
year. Fixed assets held for sale are presented at the recoverable amount, which is the lower ofbook value or fair value less costs to sell.
Trade accounts payable
Trade accounts payable are stated at amortised cost, generally equalling nominal value.

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f i n a n c i a ls t a t e m e n t s

Financial liabilities
Loans payable and overdrafts are stated at amortised cost. The recognition of interest expenses isbased on the effective interest rate method.
Provisions
Provisions relate to product warranties and impending losses whose amount and timing is uncertain. They are recognised if the Group has an obligation based on past occurrences at balance
sheet date or a cash drain is probable and can be reliably determined. The amounts recognised
represent management’s best estimate of the expenditure that will be required to settle the obligation. Providing the effect is material, long term provisions are discounted.
Shareholders’ equity
Shareholders’ equity is categorised as following:a) Share capital
	The share capital contains the fully paid in registered shares.
b) Share premium	Share premium comprises payments from shareholders that exceed the par value as well as realised gains/losses including tax on transactions with own shares.
c) Reserve for own shares	The acquisition price of own shares is disclosed as a reduction of shareholders' equity. Realised
gains and losses on transactions with own shares are recognised in share premium. Compensation and cash inflows resulting from the issue and subsequent possible exercise of share options are credited to share premium.
d)	Translation reserve	Translation reserve consists of accumulated translation differences resulting from translation ofgroup subsidiaries’ financial statements with a functional currency other than Swiss Franc and of
equity-alike intercompany loans. The changes in currency differences is presented in the consolidated statement of comprehensive income.
e) Hedge Reserve	Change of cash flow hedges is disclosed separately as realised or non realised gains/losses in
the hedge reserve.
f)	Retained earnings	Retained earnings contains not distributed profits.

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f i n a n c i a ls t a t e m e n t s
I n t e rr o l l
G r o u p

Revenue recognition
Revenue is generally recognised upon delivery or, depending on the size and the complexity ofthe order, when technically approved by the customer. The Group establishes appropriate warranty provisions relating to provisioned services in order to cover expected claims.
Revenue from services
Interroll performs services to third parties in connection with administrative tasks. The revenue resulting from these services is recognised in the income statement as other operating income.
Material expenses
Material expenses include all costs of raw materials and consumables used, goods purchased
and third-party manufacturing, processing or conversion of the Group’s products (services
purchased).
Research and development
Expenditure on research and development is only capitalised when the cumulative recognition criteria of IAS 38 are met. Expenses for research and development include wages and salaries, material costs, depreciation of technical equipment and machinery dedicated to research and development, as well as proportional overhead costs. Such expenses are included in the respective
line item of the income statement.
Retirement benefits
The Group sponsors pension plans according to the national regulations of the countries in which
it operates. All significant pension plans are operated through pension funds that are legally independent from the Group. Generally, they are funded by employees’ and employers’ contributions.
The foreign pension schemes are normally defined contribution plans whereby the pension expense for a period equals the companies’ contributions during that period. The Swiss and French pension schemes have certain characteristics of a defined benefit plan; the financial impact of thisplan on the consolidated financial statements is determined based on the Projected Unit Credit
Method.
Actuarial gains and losses arising from the periodical reassessments of defined benefit plans arerecognised to the extent that they exceed 10 % of the higher of the present value of the defined
benefit obligation and the fair value of plan assets. The amount exceeding this “corridor” is amortised over the expected average remaining duration of employment of the employees participatingin the plan.

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Employee participation plans
Certain employees participate in equity based compensation plans of INTERROLL HOLDING LTD.
All equity based compensation granted to these employees is valued at fair value at grant dateand recognised as personnel expense over the period until vesting date. The fair value is calculated on the basis of the Binomial method. Discounts granted to beneficiaries on the unconditionalpurchase of Interroll shares are recognised in the income statement at grant date. Cash inflows resulting from equity based participation plans are recognised as an increase of equity. Cash compensated participation plans are recognised as other liabilities and are valued at fair value at balance sheet date.
Operating lease expenses
Property, plant and equipment that are held under operating leases are not recognised on thestatement of financial position. The operating lease expense is recognised in the income statement
on a straight-line basis over the lease contract period. Operating lease obligations depending onrevenues are estimated and accrued as they become due.
Financing result
Interest expenses on loans and finance lease liabilities are recognised as financing expenses,
whereas interest income on financial assets is recognised in financing income, both on an accrualbasis. Moreover the financing result includes foreign exchange gains and losses arising from thetranslation of items of the statement of financial position and transactions in foreign currencies aswell as changes in fair value of financial instruments.
Income tax expense
Current income taxes are calculated on the statutory results of the Group companies at the enacted or substantively enacted tax rate. They also include adjustment charges and credit notes issued on previous years’ results.
Changes in deferred taxes are generally recognize in the income tax position, unless the underlying transaction has been directly recognised in the income statement or in equity. In such case therelated income tax is also directly recognized in the statement of comprehensive income or inequity. Temporary differences resulting from first-time recognition of goodwill and from first-time recognition of assets and liabilities related to a transaction which does influence neither the result
before income taxes nor the result are not recognised. Temporary differences on the participation
value of subsidiaries are not recognised if it is probable that the temporary differences will not go
into reverse in the foreseeable future.
Deferred taxes are calculated using local enacted or substantively enacted tax rates. The future
benefits of tax loss carry-forwards are recognised as an asset if it is probable that future taxable
profits will be available to realise such benefits.

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I n t e rr o l l
G r o u p

Derivative financial instruments
Derivatives are stated at fair value. The method of recognizing gains or losses depends on the typeof the underlying transaction. The Group designates certain transactions with derivatives as either
hedges of the fair value of recognised assets or liabilities or a firm commitment at market value (fairvalue hedges); or hedges of probable future financial transactions (cash flow hedges). The Group
documents at the inception of the transaction the relationship between hedging instruments andhedged items within the context of its risk management objective and strategy. The Group also documents its assessment of the effectiveness of the derivatives at acquisition and during its term in
relation to both, the values hedged or also in view of future cash flows.
Changes in fair value are recognised as follows:a) Fair value hedges
	Changes in the fair value of derivatives designated and qualified as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged assets
or liabilities.
b) Cash flow hedges
	Changes in fair value of derivatives designated and qualified as cash flow hedges are recognised in equity. Amounts accumulated in equity are recycled to the statement of comprehensive income in the periods when the hedged item will affect profit or loss. When a hedging instrument
expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when theinitial transaction is ultimately recognized in the income statement. When a forecast transaction
is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.
c)	Other securities or financial instruments
	Certain derivatives do not qualify for hedge accounting. Changes in the fair value of such hedging
instruments are recognised immediately in the income statement. The fair value of derivatives
traded in public markets is based on quoted market prices at the balance sheet date. The quoted
market price used for financial assets is the current bid price; the appropriate quoted market
price for financial liabilities is the current ask price. The fair value of derivatives which are nottraded publicly (for example, “over-the-counter” derivatives) is determined by a valuation provided by the financial institution from whom the derivative has been acquired.

77

G e n e r a l
I n f o r m a t i o n
I n t e rr o l l
G r o u p

t o

t h e

f i n a n c i a ls t a t e m e n t s

Segment information
The management structure of the Interroll Group is governed by organizational regulations. All
strategic and major operational decisions lie within the competence of the Board of Directors who
also decides on the allocation of financial resources. The Interroll Group is managed through twoorganisational segments which primarily are defined through their products and their sales anddistribution channels.
a)	Components
	The segment “Components” develops, produces and sells rollers, roller drives and drum motors
combining these components to become a solution for its customers and uniquely sells to
OEMs. The production process is optimized for a large number of orders and follows the principle of mass production.
b)	Subsystems
	The segment “Subsystems” develops, produces and sells flow storage modules for heavy andlight duty applications as well as modules for the internal unit load handling logistic such as belt
curves, sorters and roller-/belt conveyors. Customers are on one hand OEMs and on the other
hand especially system integrators and end users. The production process consists on one
hand of module production and on the other hand of modules engineered/assembled to subsystems.
The major assessment drivers are the EBITDA/EBIT based on IAS/IFRS and the yield on the net invested assets (RONA). In view of the centralized financing by Group Treasury no financial expenses are allocated to segments. Further-more the legal structure clearly deviates from the management structure which is the reason for non-allocation of income taxes to the segments.

78

r i s k
m a n a g e m e n t
I n t e rr o l l
G r o u p3
3.1

r i s k m a n a g e m e n t
Operating and strategic risk management

Risk management on group level supports strategic decision making. Operational and strategicrisk management coordinates and monitors risks arising from the economic activities of the Group.
A systematic operational and strategic risk analysis is performed annually by the group management. In an annual strategy meeting, Group Management discusses and analysis such risks. The
board of directors is regularly informed in a uniform manner with the nature, scope, assessment
and counteractive measures of the risks.

3.1

Financial risk management

General information to the financial risk management of the Interroll GroupThe Group’s activities expose it to a variety of financial risks: market risk (currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow risk. The Group’s risk management
program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on Group’s financial performance.
The Board of Directors has the supreme responsibility for risk management. The Board of Directors
appoints thereto the Audit Committee, who is responsible for the development and the supervisionof the risk management principles. The Audit Committee reports regularly to the Board of Directors.
The principles established for risk management are geared to identify and analyze those risks that
may impact the Group, to define adequate limits and to perform controls over the risks and theiradherence to. The risk management principles and the related procedures are regularly verified inorder to consider changing market conditions and operations of the Group. The target is to develop management regulations and management processes and a disciplined and constructive control environment through existing training and guidelines ensuring a disciplined and conscious
handling of risks.
The Audit Committee supervises management in the control of compliance with principles andprocesses. Their adequacy is permanently verified in respect of the risks that the Group is exposed to. The Audit Committee is supported in this respect by the internal audit department.

79

r i s k
m a n a g e m e n t
I n t e rr o l l
G r o u p

Financial risk management is carried out by the central treasury department. Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units
and reports at regular intervals to the Audit Committee.
The following sections provide a summary of the scope of individual risks and on the targets, principles and processes implemented for measuring, monitoring and hedging financial risks. Additional information on the financial risks is included in the notes to the consolidated financial statements (see note 6.8 – Financial risks).
Market Risk
Market risks to which the Interroll Group is exposed to can be summarised into the following threemain risk categories:a) 	Currency risk exposure	The Group operates internationally and is exposed to foreign exchange risk arising from various
currencies. Foreign exchange risks arise from future commercial transactions and from recognised assets and liabilities.To manage its foreign exchange risk arising from future commercial
transactions and recognised assets and liabilities, the Group operates an internal monthly “Netting” process. Net exposure is partially hedged using forward currency contracts. Such contracts are entered into only with high-credit-quality financial institutions.
b) 	Interest rate risk
	Financial assets and liabilities contain interest bearing loans at either a fixed or a variable rate.
Relating interest risks are disclosed in 6.8.
c) 	Price risk
	The Group is exposed to price risk on steel, copper and polymere materials. Such price risk isgenerally not hedged.

80

r i s k
m a n a g e m e n t
I n t e rr o l l
G r o u p

Credit Risk
The risk of default is the risk to incur a financial loss when a customer or a counterparty to a financial instrument does not fulfill its legal obligation. The default risk at Interroll exists on trade andother accounts receivable and on cash and cash equivalents.
Customers exceeding EUR 5 000 credit limit are verified for their creditworthiness before the orderis executed. The creditworthiness verification is also based on the credit information database provided by an international service provider leading in this sector. Their software allows determining
a credit limit per single customer, based on specifically determined calculation formulas. The calculation formulas have been defined by the Interroll Group.
Accumulation of credit risks in trade and other accounts receivable is limited due to numerous
customers and their worldwide location. The extent of credit risks is mainly determined by the individual characteristics of each single customer. The risk evaluation includes an assessment of thecreditworthiness by considering the customer’s financial situation, its credit history and other factors. Sales and revenue from services are performed only with customers whose credit worthinessis proved through the above process. A credit limit is defined for each customer. These limits areverified at least once a year.
Interroll invests its funds in short term deposits at a multitude of banks with whom long standing relationships exist. Such deposits have a maturity date shorter than twelve months. Likewise transactions with derivative financial instruments are entered into only with major financial institutions. Interroll does not hold material open positions with these institutions.
The maximum credit risk from financial instruments corresponds to the balance sheet amount ofeach single financial asset. There are no guarantees or other liabilities that could increase the riskover the corresponding amount in the statement of financial position.
Liquidity Risk
Liquidity risk is the risk that the Group cannot fulfil its financial obligations on time.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities,
the availability of funding through an adequate amount of committed credit facilities and the ability
to close market positions at any time. Due to the dynamic nature of the underlying business, Group
Treasury aims to ensure funding by keeping committed credit limits available.

81

C h a n g e s
t o
t h e
s c o p e
I n t e rr o l l
G r o u p

4o f

c o n s o l i d a t i o n

C h a n g e s t o t h e s c o p e o f c o n s o l i d at i o n

Changes in the business year 2010
In the year under review, there was no acquisition of subsidiaries or business activities respectively. There were no payments due from previous acquisitions.
Changes in the business year 2009
In the previous year, the following companies and business activities were acquired:a) Interroll Dynamic Storage Inc., Hiram/Atlanta, consolidated at 100 %As per 5 February 2009 assets valued at CHF 2.7 million have been acquired from “BMW Metal
Fabrication Inc. and ACF Partners Inc”. Assets have been transferred thereafter to the newly
founded company “Interroll Dynamic Storage Inc.” located in Hiram close to Atlanta/USA. CHF
2.4 million of the total acquisition price has been settled shortly after the closing by cash. The
remaining portion of the acquisition price of CHF 0.3 million has been settled against transfer of
921 Interroll registered shares from the company’s own shares held. The new company
manufactures and sells modules for storage systems and thus is fully allocated to the segment“Subsystems”.
b) Assets acquired from Maxwell Manufacturing Company Inc., St. Louis/USA
Furthermore on April 22nd, 2009 Interroll Components Canada Ltd. acquired assets from Maxwell Manufacturing Company located in St. Louis/USA valued at CHF 0.7 million. The acquisition results in an increase of the value-added chain in connection with the manufacturing ofcheckout motors and is thus fully allocated to the segment components. The acquisition value
has been settled shortly after closing by cash.
The goodwill of each acquisition reflects improved competitive advantages and synergy effects.

82

C h a n g e s

t o

t h e

s c o p eo f
c o n s o l i d a t i o n
I n t e rr o l l
G r o u p

Fair value adjustments of net assets acquired
2010

2009

Fair value

Fair value

Property, plant and equipment

–

1 613

Intangible assets

–

1 281

Total non-current assets

–

2 894

Inventory–

91

Total current assets–

91

Total assets

–

2 985

Deferred tax liabilities–

159

Total liabilities–

159

Total net assets acquired

–

2 826

Goodwill acquired–

615

Total acquisition costs

–

3 441

2010

2009

Settled by cash and cash equivalents––3 179Settled by equity instruments

–

–262

Total acquisition costs––3 441in thousands CHF

Settlement of acquisition costsin thousands CHF

Cash flow from acquisitionsin thousands CHF
Settled by cash and cash equivalents

2010

2009

–

–3 179Settlement of outstanding acquisition price from previous years––1 467

Net cash used in acquisitions––4 646Further notes to acquisitions
In the year under review, there was no acquisition nor any related payment. Acquired intangible
assets of 2009 relate to customer value (CHF 0.3 million), technical know-how (CHF 0.2 million)
and a compensation for a non-competition clause for a selling party of (CHF 0.8 million).
The acquisitions of the previous year increased net sales by CHF 1.2 million. Their result contribution was insignificant.

83

i n f o r m a t i o n
S e g m e n t
I n t e rr o l l
G r o u p

5

S e g m e n t i n f o r m at i o n

Revenues and tangible assets as per operational segment

Components

in thousands CHF
Net sales with third party
Net sales with other segments

178 103

Subsystems

2010

2009

2010

in %

in %

in %

98.7

157 91798.8

104 966in %76 070

97.5

2 266

1.3

1 914

1.2

2 212

2.1

1 936

2.5

Net sales segments

180 369

100.0

159 831100.0

107 178100.0

78 006

100.0

Material expenses–68 878–38.2–60 606–37.9–51 408–48.0–41 993–53.8

Personnel expenses–54 521–30.2–53 009–33.2–29 760–27.8–28 513–36.6

Change in WIP/FG
Other operating expenses

–63

–0.0

–959

–0.6

–3 337

–3.1

5 580

7.2

–35 479–19.7–32 360–20.2–18 030–16.8–16 005–20.5

Other operating income

6 682

3.7

6 716

4.2

3 010

2.8

2 140

2.7

EBITDA

28 11015.6

19 613

12.3

7 653

7.1

–785

–1.0

Depreciation–7 584–4.2–7 725–4.8–3 328–3.1–3 131

–4.0

EBITA

20 526

11.4

11 888

7.4

4 325

4.0

–3 916–5.0

Amortisation–4 037–2.2–4 456

–2.8

–427

–0.4

–414

–0.5

EBIT

16 489

9.1

7 432

4.6

3 898

3.6

–4 330–5.6

RONA**

11.3 %

5.0 %

7.7 %

–9.8 %

Total assets*

137 768

145 173

62 66560 405

Total liabilities*

25 76222 99119 42330 464

Investments***

12 89913 17314 515

9 686

Average number of employees
Research and development
*

805

770

450

436

7 361

7 277

1 307

1 311

The “reconciliation to Group figures” results from the fact that cash and cash equivalents, prepaid and deferred taxes as well as non-current financial assets resp. liabilities

are not allocated to the segments.
** “RONA” is calculated as the percentage of EBIT less tax calculated at the expected tax rate, divided by average net assets.
*** Investments are related to property, plant and equipment as well as to intangible assets.

84

97.9

2009

S e g m e n t
i n f o r m a t i o n
I n t e rr o l l
G r o u p

Reconciliation toGroup figures

Total Segments

2010

2009

283 069

233 987

2010

2009

Total Group

2010

2009

283 069

233 987

4 478

3 850

–4 478–3 850––287 547

237 837–4 478–3 850283 069

233 987–120 286–102 599

4 478

3 850

–115 808–98 749–84 281–81 522–84 281–81 522–3 4004 621–53 509–48 365

9 692

8 856

35 76318 828–10 912–10 856

24 851

7 972–4 464–4 87020 387

3 102

236
–

–3 4004 621–53 509–48 129

–236

9 692

8 620

–

35 76318 828–10 912–10 856

24 851

7 972–4 464–4 87020 387

3 102

10.4 %

1.6 %215 693

–

–

–

–

200 433

205 578

10 83010 115211 263

45 18553 45538 62129 21483 80682 66927 41422 85927 41422 859

1 255

1 206

1 255

1 206

8 668

8 588

8 668

8 588

85

S e g m e n t
i n f o r m a t i o n
I n t e rr o l l
G r o u p

Net sales with 3rd parties and fixed assets as per geographical location
Net sales with third parties

Assets*in thousands CHF

2010

in %

2009

in %

Central Europe

35 03812.4

30 247

12.9

–

–

–

–

Western Europe

24 361

8.6

24 198

10.3

1 380

1.1

2 368

1.9

North Europe

32 416

11.5

21 437

9.2

6 465

5.3

8 647

6.9

East Europe and Middle East

17 301

6.1

14 257

6.1

105

0.1

149

0.1

Africa

6 188

2.2

3 759

1.6

281

0.2

198

0.2

Germany

46 21916.3

47 613

20.3

58 341

48.2

59 488

47.6

France22 156

7.8

19 468

8.3

8 808

7.3

11 7999.4

Switzerland

5 001

1.8

3 856

1.6

31 68226.2

26 67021.3

Europe, Middle East, Africa

188 680

66.7

164 835

70.4

107 06288.5

109 31987.4

USA

52 774

18.6

38 793

16.6

7 447

6.2

9 432

7.5

Other Americas

9 101

3.2

7 867

3.4

2 493

2.1

3 058

2.4

2010

in %

2009

in %

South America

2 624

0.9

1 959

0.8

298

0.2

342

0.3

Total Americas

64 49922.8

48 61920.8

10 238

8.5

12 832

10.3

East Asia

15 414

5.4

8 876

3.8

1 996

1.7

1 272

1.0

South East Asia

11 122

3.9

8 502

3.6

851

0.7

1 407

1.1

South Asia incl. Australia

3 354

1.2

3 155

1.3

786

0.6

274

0.2

Total Asia and Pacific

29 890

10.6

20 533

8.8

3 633

3.0

2 953

2.4

Total Group283 069

100.0

233 987

100.0

120 932

100.0

125 104

100.0* Assets are disclosed excluding financial assets and deferred tax assets.

The grouping of the geographical split into regions/group of countries was performed as following:
Central Europe

Austria, Benelux-countries, Italy

Western Europe

Great Britain, Spain, Portugal

North Europe

Denmark, Finland, Sweden, Norway, Iceland

Eastern Europe and Middle East

Poland, Czech Republic, Baltic countries, all Balkan countries, Greece

Africaparticularly South Africa

Germany
FranceSwitzerland

Country of domicile of INTERROLL HOLDING LTD.

USA
Other America

Canada, Mexico, Central America

South America

Brazil, Argentina, Chile

East Asia

China, Japan, Korea

South East Asia

Singapore, Thailand, Malaysia, Indonesia

South Asia incl. Australia

Australia, India

The key definition of turnover has been defined according to the location of the recipient of the invoice.
Material turnover with specific customers
Turnover is realized with more than 23 000 customers. There is no customer achieving a turnover of more than five percent of Group sales.
86N o t e s

6

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

 o t e s t o t h e c o n s o l i d at e d s tat e m e n t o f f i n a n c i a lNposition

6.1

M o v e m e n t s o f p r o p e r t y, p l a n t a n d e u i p m e n t
Land &
Building

in thousands CHF
2010

2009

Production
equipment &machinery

Office equipment& motor vehicles

Assets underconstruction

2010

2009

2010

2009

2010

2009

Total
property, plantand equipment

2010

2009

162 833

Cost
At 1.1.

69 95862 53991 53685 047

10 18410 223

3 379

5 024

175 057

Currency translation adj.

– 10 641– 461– 8 234

– 56

– 886

59

– 422

32

– 20 183– 426

Additions

11 831

1 767

4 716

11 220

1 200

721

2 076

2 784

19 82316 492

Disposals

– 394

– 433

– 3 442– 5 380– 1 294

– 798

42

–

– 5 088– 6 611

Reclassifications

2 259

5 617

– 151

44

– 36

– 44

– 2 276– 4 461

– 204

1 156

Changes in the scopeof consolidation**
At 31.12.

–

929

–

661

–

23

–

–

–

1 613

73 01369 95884 42591 5369 168

10 184

2 799

3 379

169 405

175 057– 82 970

Accumulated
Depreciation &impairments– 23 509– 20 240– 58 431– 55 969– 7 538– 6 761– 89 478

Currency translation adj.

At 1.1.

3 420

178

5 200

156

576

– 15

9 196

319

Depreciation– 2 700– 2 521– 7 125– 7 010– 1 087– 1 325– 10 912– 10 856

Impairment losses
Disposals
Reclassifications
At 31.12.

–

–

–

–

–

–

–

–

368

335

3 082

4 414

1 080

541

4 530

5 290

17

– 1 261

151

– 22

36

22

204

– 1 261– 22 404– 23 509– 57 123– 58 431– 6 933– 7 538– 86 460– 89 478

50 60946 44927 30233 105

2 235

2 646

82 94585 579Property, plant andequipment at 31.12.
Thereof finance leases*

2 799

3 379

–

1 318

12

497

–

11

12

1 826

Capital commitments

5 246

13 714

1 310

168

39

16

6 595

13 898Insurance value***

91 701

94 526

116 638

123 246––

208 339

217 772*
In the year under review as well as in the previous year there were no additions not involving the movement of cash and cash equivalents.
** Detailed information on the changes in the scope of consolidastion is disclosed in note 4.
*** The insurance value of production equipment and machinery also covers other tangible assets.

Reclassifications from/to assets held for saleIn the previous year, the book value (CHF 0.4 million) of a building in Wassenberg (DE) has been reclassified back fromassets held for sale to fixed assets which is being used again for operational purposes. Since 2009, as a result of local
restructuring in Denmark, a building has been put to sale. The property with a book value of CHF 0.5 million has been
reclassified from fixed assets to assets held for sale. This building most probably will be sold in early 2011.
Further notes to the movevements of property plant and equipment
At the end of the period under review no risks exist in the opinon of Group Management which negatively impact thebook value of fixed assets.
87

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u p

6.2

o f

f i n a n c i a l

p o s i t i o n

Movements of goodwill and intangible assets

in thousands CHF

Goodwill

Software

2010

2009

2010

2009

At 1.1.

14 11213 501

12 161

Currency translation adj.

– 1 705–4– 228

Patents,
technology andlicences

2010

2009

7 791

19 1838– 2 828

Total
intangible
assetsCustomer
relationship

2010

2009

2010

2009

18 32024 650– 75– 3 984

24 26370 10663 87566– 8 745–5

Cost

Additions

–

–

7 591

6 367

–

–

–

–

7 591

6 367

Disposals

–

–

– 146

– 2 027– 2 201–––– 2 347– 2 027

Reclassifications

–

–

– 15

–

–

–

–

–

– 15

–

Changes in the scopeof consolidation*
At 31.12.

–

615

–

22

–

938

–

321

–

1 896

12 407

14 11219 36312 16114 15419 18320 66624 65066 59070 106– 27 748

Accumulated
Amortisation &impairments– 3 126– 3 126– 3 362– 4 933– 14 860– 12 977– 9 233– 6 712– 30 581

Currency translation adj.

At 1.1.

–

–

188

– 12

2 307

38

1 705

25

4 200

51

Amortisation

–

–

– 381

– 403

– 1 763– 1 921– 2 320– 2 546– 4 464– 4 870
1 986

Disposals

–

–

27

1 986

2 201

–

–

–

2 228

Reclassifications

–

–

15

–

–

–

–

–

15

–

– 3 126– 3 126– 3 513– 3 362– 12 115– 14 860– 9 848– 9 233– 28 602– 30 581

9 281

10 98615 850

8 799

2 039

4 323

10 81815 41737 98839 525

–

–

798

7 942

–

–

–

–

798

7 942

At 31.12.
Total intangible assets,
net at 31.12.
Capital commitments* Detailed information on the changes in the scope of consolidastion is disclosed in note 4.

Goodwill allocation to segments
Goodwill is allocated to the following cash generating units that are equal to the operating segments:
in thousands CHF

88

31.12.2010

31.12.2009

Components

7 488

8 959

Subsystems

1 793

2 027

Total Goodwill

9 281

10 986

N o t e s

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Goodwill: impairment test
The impairment tests are generally based on a three year plan and on the present value of future(pre-tax) cash flows (value in use) determined using a discount rate of 9.1 % (previous year: 9.7 %).
The growth rate and the discount rate were defined as key assumptions. No further growth rate
was assumed for the extrapolation of free cash flows. The sensitivity analysis performed resulted inboth years under review in the conclusion that the discounted value of future free cash flows exceeds the value of the current goodwill also when assuming a change of the discount rate undernormal economical conditions.
Goodwill increased in the previous year following the acquisition of the assets of “BMW Metal Fabrication Inc. and ACF Partners Inc.” as well as of the assets of “Maxwell Manufacturing Company”
and results from the difference between the assets valued at fair value and the purchase price.
Software
Out of the accumulated acquisition costs, CHF 15.4 million (previous year: CHF 8.1 million) relate
to the buildup and design of SAP. In the year under review the additions amount to CHF 7.3 million(previous year: CHF 5.9 million). Capital commitments in the year under review and those for theprevious year are related to the investment and developement of SAP.
Other intangible assets that are not in use yet merely relate to the introduction of SAP, which will
presumably go live in the course of 2011. No amortization has been recognized so far on these assets. An impairment test with the same key assumptions as those used for the tests on the goodwill value was performed for these intangible assets not yet in use. The sensitivity analysis performed resulted in the conclusion that the discounted value of future free cash flows exceeds thevalue of the current goodwill also when assuming a change of the discount rate under normal economical conditions.
Customer relationship
Customer relationship is normally amortised on a straght line basis over 10 years. At year end
2010, an amortisation term of additional 5 years remains on the major portion of customer relationship. A review if indicators exists that point towards an impairment of customer relationship was
performed. There are no signs that would indicate an impairment of this value.

89

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u p

6.3

o f

f i n a n c i a l

p o s i t i o nAssets pledged or assignedin thousands CHF

31.12.2010

31.12.2009

Land & buildings

1 343

2 911

Production equipment and machinery

12

497

Office equipment

–

11

939

982

Inventory
Trade receivables

2 182

337

Total assets pledged or assigned

4 476

4 738

These assets are pledged respectively assigned to local credit lines granted (see note 6.8).

6.4

Inventories

Detailed overview on the positions belonging to the inventory
in thousands CHF

31.12.2010

31.12.2009

Raw materials

23 50324 837Work in progress

7 712

13 770Finished products

2 154

1 871

Valuation allowance– 1 859– 2 386

Total inventory, net

31 51038 092in thousands CHF

2010

2009

Balance as per 1.1.

– 2 386– 3 291

Developement of valuation allowance on inventory

Currency translation adjustment

253

– 20

Additions

– 343

– 608

Reductions
Total valuation allowance on inventory as per 31.12.

617

1 533

– 1 859– 2 386

Information on the carrying amount of pledged inventory is disclosed in note 6.3. In the annual report of the previous year, prepayments to suppliers for inventory were disclosed in inventories.
This balance sheet position is now disclosed in line with valid accounting policies within receivables (see note 6.5). The previous year was aligned to the current year.
The reduction of valuation allowance on inventory is related to sale or scrap of items, as well as toa reassessment of the valuation allowance affecting the statement of comprehensive income of theGroup.

90

N o t e s

6.5

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Tr a d e a n d o t h e r a c c o u n t s r e c e i v a b l e

Detailed overview of trade and other accounts receivable
Trade accounts receivable arise from deliveries and services relating to the Group’s operating activities. The increase is primarily due to increased turnover of the Group.
in thousands CHF

31.12.2010

31.12.2009

Trade accounts receivable from goods and services

43 86235 238Valuation allowance– 3 019– 2 578

Total trade accounts receivable, net

40 84332 660

3

–

1 103

1 089

688

1 160

Other accounts receivable

2 602

5 065

Total other accounts receivable, net

4 396

7 314

Total trade and other accounts receivable, net

45 23939 974Foreign currency forward contracts*
Prepaid expenses and accrued income
Prepayments for inventories*** see note 6.8** see note 6.4

91N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u po f

f i n a n c i a l

p o s i t i o n

Ageing and valuation allowance of trade accounts receivable
Trade accounts receivables are due and specific/general valuation allowance have been evaluated as follows:in thousands CHF

			

Gross

31.12.2010

Valuation allowance
individualNet

31.12.2009
Gross

Valuation allowancecollective

individualNet

collective

Not past due

29 33129 331

23 77323 773

Past due 1– 30 days

9 781

9 781

6 590

6 590

Past due 31– 60 days

2 116

2 116

1 961

Past due 61– 90 days

556

– 941

– 385

751

– 415

Past due > 90 days

2 078

– 826

– 1 252

–

2 163

– 976

– 1 187–

Total trade accounts
receivable

43 862– 1 767– 1 252

40 84335 238– 1 391– 1 187

32 660

1 961
336

The valuation allowance on trade accounts receivable from third parties developed as follows:in thousands CHF

			

At 1.1.
FX translation adjustment
Additions
Alllowance used
Allowance reversed
At 31.12.

2010

2009

Total
revalued

Individuallyrevalued

Collectively
revaluedTotal
revalued

Individuallyrevalued

Collectively
revalued– 2 578– 1 391– 1 187– 2 591– 1 404– 1 187

442

233

209

48

48

– 1 491– 1 217

– 274

– 377

– 377

536

536

101

101

72

72

– 3 019– 1 767– 1 252

241

241– 2 578– 1 391– 1 187

During the year under review, an amount of CHF 0.5 million (previous year: CHF 0.1 million) relating to irrecoverable trade receivables was written off. Currently, no other risks are identifiable in the net trade accounts receivables. Sales arebroadly diversified across geographical and industrial markets. Thus, the risk of unexpected losses from trade receivables is assessed to be low.
Regional break down of trade accounts receivables
Trade accounts receivables can be broken down into the following three main areas:in thousands CHF

31.12.2010

31.12.2009

Europe, Middle East, Africa

26 33821 979Americas

10 509

6 311

Asia and Pacific

7 015

6 948

Total trade accounts receivables, gross

43 86235 238Trade accounts receivables have increased proportionnally in line with the increased revenue in all regions (see note 5 –Segment information). At average, trade accounts receivables are 45 days outstanding (DSO). The respective value isfor Europe 42, for Americas 42 and for Asia/Pacific 85). In the previous year, the DSO was 54 for the Group, for Europe
42, for Americas 49 and for Asia/Pacific 85.
92

N o t e s

6.6

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Cash and cash equivalents

Positions included in cash and cash equivalentsin thousands CHF
Cash on hand, bank and postal accounts
Short term deposits
Total cash and cash equivalents

31.12.2010

31.12.2009

9 131

8 163

979

224

10 1108 387

Interest rates, currencies hold in cash and transfer limitations
The interest rates vary between 0 % (for CHF) and 5 % (for ZAR). The respective rates of 2009 were 0 % (CHF) and
5 % (ZAR) respectively .
Cash positions are held to ca. 41 % in EUR, to 1 % in CHF, to 25 % in USD, to 8 % in THB resp. ZAR, and to 17 % in othercurrencies. Cash positions at the last year end were held to approximately 38 % in EUR, to 2 % in CHF, to 16 % in USD
and to 44 % in other currencies.
Cash and cash equivalents at Interroll South Africa as well as at Interroll Brasil are subject to transfer limitations of CHF
1.1 million (2009: CHF 2.1 million). These transfer limitations do not have any impact on their operating activities.

93

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u p

6.7

o f

f i n a n c i a l

p o s i t i o n

Financial instruments

Reconciliation from balance sheet items to valuation categories as per IAS 39
The table below shows an overview of financial instruments held by valuation category according to IAS 39:
in thousands CHF

31.12.2010

31.12.2009

Cash and cash equivalents

10 1108 387

Trade and other accounts receivable*

44 54838 814912

923

55 57048 124

Financial assets
Total financial assets
at carrying value
Foreign currency forward contracts**

3

– 453

Total financial instruments at fair value

3

– 453

Trade and other accounts payable

34 28334 250Financial liabilities

22 98812 562

Total financial liabilities
at carrying value

57 27146 812* see note 6.5** see notes 6.5, 6.8 and 6.16

Book values of cash and cash equivalents, trade and other accounts receivable and payable as well as financial assets
amount closely to fair value due to their short term maturity. As per end of the period under review no material risks exist
which are not accounted for through the valuation reserve. Financial assets and liabilities are merely due within approximately 2 years and therefore are very close to book value.
Prepayments from clients or to suppliers respectively are not classified as financial instruments in the sense of IAS 39.
The respective values of the previous year were aligned to the current year.

94

N o t e s

6.8

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Financial risks

Currency risk exposure
Due to its international focus, the Interroll Group is exposed to foreign currency risks. Risk exposures result from transactions in currencies deviating from the entities’ functional currency.
The following table shows the major currency risks at the respective balance sheet date:in thousands CHF

31.12.2010
USD

CHF

Financial assets

2 989

68

Trade and other accounts
receivable

5 899

1 222

2 194

Cash and cash equivalentsincl.intercompany loans

3 957

20 748

997

841

5 000

2 818

2 585

4 520

21

6 200

43

Currency risks on the balance
sheet (gross)16 52535 823

7 754

4 989

3 381

23 937

Elimination equal currency– 2 884 – 25 611– 3 612– 1 101 – 1 793– 5 384

Currency risks on the balance
sheet (net)

13 641

10 212

4 142

3 888

18 553

10 638– 1 183– 1 295– 5 017– 4 945

Financial liabilities
Trade and other accounts
payableShort term liabilities

Natural Hedges
FX forward contracts– 4 020

Net currency risk exposure

9 621

9 029

EUR

SGD

31.12.2009

1 132

CAD

CHF

EUR

USD

SGD

GBP

1 226

64

511

864

4 348

3 476

1 116

3 705

748

19 461

3 611

1 778

12 009

169

2 367

587

364
3 493

51

2 496

4 715

1 803

3 364

1 246

845

1 052

3 976

241

11 14897

16 6509 665

27 6375 804– 6 012– 2 477 – 23 489– 2 678

7 188

3 126

1 588

4 148
– 487

– 1 393– 2 439– 678– 8 643– 2 845– 4 495– 1 360– 1 314

1 454

1 449

910

4 893

2 848

2 693

2 301

1 812

The curency risk on the balance sheet (gross) is equal to the sum of the value of all positions in the balance sheet thatare held in a different currency than the functional currency of a company. Such positions contain both, group internal
as well as external amounts. In a first step, all of those risks are added up because a currency risk can arise on the debit as well as on the credit side of the balance sheet. The total is then disclosed as currency risk on the balance sheet(gross). The risk of each currency group is translated into CHF at the closing rate and added up to total Group values.
“Elimination equal currency” results from setting off short positions versus long positions of currrency risks which exists
in the same foreign currency deviating from the functional currency and which are presented in the same group entity.
Natural hedges result from netting out currency risks among all group entities. The amount disclosed in line “FX forward
contracts” (foreign currency forward contracts) corresponds to the amount actually hedged and translated into CHF.
Changes in the valuation of fair value hedges are recognized in the financing result (see note 7.5). The table contains
only the Group’s material foreign currency risks. All others are regarded to be immaterial.
Net investments in foreign subsidiaries are long term investments. Such investments are exposed to currency fluctuation, because they are held in another currency than the Group’s functional currency. From a macroeconomic and longterm point of view, the currency exchange effects should be neutralised by the inflation rate at the subsidiaries domicile.
Due to this reason and also due to costs for respective derivative instruments, the Group does not hedge such risks.

95

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u po f

f i n a n c i a l

p o s i t i o n

Foreign currency forward contracts
The following table shows the contractual and fair values of the hedges (foreign currency forward contracts) held by theGroup. The values in the previous year are aligned to the disclosure illustration of the year under review.
in thousands CHF

31.12.2010
Hedgednotional
currency amount in CHF

31.12.2009
Hedgednotional
currency amount in CHF

Sell/Buy

Maturity

USD/CAD

2011

USD

1645

35

USD

–

USD/CHF

2011

USD

2375

53

USD

–

–

–

–

USD

4 466

– 177

USD/EUR

Fair value

Fair value–

JPY/SGD

2011

SGD

1925

23

SGD

1 357

23

KRW/SGD

2011

SGD

514

8

SGD

–

–

CNY/EUR

2011

EUR

642

– 23

EUR

–

–

ZAR/EUR

2011

EUR

751

– 68

ZAR

750

– 35

THB/EUR

2011

THB

626

– 26

THB

1 118

– 55

CAD/CHF

2011

CAD

678

1

CHF/EUR––

GBP/EUR

–

–

–

–

CHF

6 096

– 138

GBP

1 316

– 43

various
Total FX forward
contracts*

3

– 28
– 453

* see notes 6.5 resp. 6.16

The fair values of the derivative financial instruments are classified as hierarchy 2 in the sense of IFRS 7. The valuationin hierarchy 2 is based on factors which cannot be tracked to actively listed prices on public markets. Instead, they canbe monitored directly (as a price) or indirectly (as a derivative of the price).
The Group prepares regularly a rolling forecast of foreign currency cash flows. 0 – 50 % of such budgeted, future foreign
currency flows may be hedged through forward contracts. At the end of the year under review, there were no open cash
flow hedges held by the Group.
The “notional amount in CHF” corresponds to the hedged balance sheet risk, translated into CHF. With derivative financial instruments, the Group hedges 50 – 100 % of its net currency risks on the balance sheet.

96

N o t e s

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Sensitivity analysis to the currency risk exposure
As per year end, a sensitivity analysis was carried in respect to financial instruments. The sensitivity analyses calculates
the effect of FOREX – changes on the major currency pairs within the Group. These risks particularly result from different
currencies between costs for production and invoicing currency to the customers. A currency fluctuation of 10 % would
have the following effects on the foreign currency positions in the balance sheet:in thousands CHF

CURRENCY PAIR
Financial Assets

31.12.2010

31.12.2009

EUR

CHF

CAD

EUR

CHF

CAD

vs. CHF

vs. USDvs. USDvs. CHF

vs. USDvs. USD

68

2 989

–

64

2 367

–

Trade and Other Receivables

– 592

206

3 775

– 2 305

429

2 116

Cash and Cash Equiv. incl. IC-Loans

20 0833 449

467

16 856

1 265

459

Financial Liabilities

5 000

–

–

–

–

–

644

– 53

688

1 299

12

620

6 200

–

21

1 052

–

84

Gross Exposure per currency pair

31 403

6 591

4 951

16 966

4 073

3 280

Risks opposing each other– 23 688

106– 1 417– 4 702– 24– 1 409–– 2 375– 1 645– 6 096

–

–

7 715

4 322

1 889

6 169

4 049

1 871

Trade and Other Payables
Short Term and Current Liabilities

FX forward contracts
Net FX exposure per currency pair
Effect on the result due to currencychange of 10 % (+/-)

772

432

189

617

405

187

Income tax expense at 20.1%

– 155

– 87

– 38

– 124

– 81

– 38

Net FX exposure after income taxes

617

345

151

493

324

149

Analogously to the currency risk analyis, the net risks of currency pairs are summed up. The position “Risks opposing
each other” is a result of netting out those risks that are contrary to each other. The disclosed amount in line “FX forward
contracts” equals to the total of hedged currency risks of a currency pair. It is also deducted from the gross risk as it
deviates linearly with the fluctuation of the currency. The income taxes are calculated in line with the applicable rate foran ordinary taxed entity in Switzerland (see note 7.6). The calculcation of the sensitivity analysis of the previous year
has been adjusted in order to ensure comparability.

97

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u po f

f i n a n c i a l

p o s i t i o n

Interest risks and interest sensitivity
As per balance sheet date, the Group had interest bearing net financial liabilities of CHF 20.5 million (previous year:
CHF 10.0 million, see also note 6.12). The following table divides interest bearing assets and liabilities into fix and variable as well as shows none interest bearing positions within financial assets and liabilities. A change of the interest ratewould have had no effect onto the equity because the Group currently does not hold any financial instruments to hedge
interest risks. The Group regularly monitors its interest risks and reserves the possibility to hedge such in future.

in thousands CHF
Financial assets

31.12.2010
Nom. Int.
rate in %Bookvalues

0– 0.15977

fix int. rate
Var. int. rate

Basis points
+ 100
- 100

–

Not interest bearing

10

–1

2

Total deposits

979

fix int. rate

2.0

482

Var. int. rate

0.25– 0.35

263

Not interest bearing

167

Total loans

912

10

–1

3

–1

3

31.12.2009
Nom. Int.
rate in %Bookvalues

0.0– 2.0

868

0.0

172

0.0

–
1 040

Basis points
+ 100
- 100

2

–

2

–

0.0

54

0.0

53

1

–

107

1

–

8 163

–

–

–

–1

Cash on hand, bank and postal
accounts

9 131

Trade and other receivables

44 548

Total other financial assets

53 679––46 977––

Total financial Assets

55 57013–2

48 124

3

–

– 165

143

– 45

27

– 45

27

–

–

–

–

n/a

38 814

Financial liabilities
fix int. rate

0.0– 1.7

5 036

Var. int. rate

0.7– 1.3

16 520n/a–

Not interest bearing
Total bank loans

21 556

fix int. rate

6.0

Not interest bearing

n/a

Total other loans
fix int. rate
Total finance leases
Bank overdrafts

98

0.0– 12.75

n/a

157
10 618

6.0

313

n/a
–

–

4
4

6 000
4 461

143

703
1 016

5.0

– 165

2.7
0.6

702
1 337

4.2– 5.0
–

635

–

213
213

412

n/a

394

Trade and other accounts payable

34 283n/a

34 250Total trade and other accounts
payable34 695––34 644––

Total financial liabilities

57 271– 165

143

46 812– 45

27

Net financial liabilities– 1 701

– 152

141

1 312

– 42

27

N o t e s

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Interest sensitivity is only calculated on interest bearing items of the balance sheet. Because items
that are interest bearing at a fixed rate, no effect is calculated on such due to an increase or decrease of the interest rate. No sensitivity is calculated on items belonging to cash, trade and otheraccounts payable/receivable as well as on bank overdrafts. Those items are either not interest bearing or fluctuating too much. Therefore, a respective sensititvity could be misleading. As per above analysis, the Group’s annual result could worsen due to an increase of the interest rate of one
percentage point by CHF 0.16 million (previous year: CHF 0.04 million). The result would improvewith an interest reduction of one percentage point by CHF 0.15 million (previous year: CHF 0.03
million). For certain interest bearing positions, the interest reate is already lower than one percent.
Therefore, the effect of the reduction was only calculated up to the current interest rate being lower
than 1.0 %.
Liquidity risk and credit facilities
The Group carries out quarterly a complete liquidity planning on a consolidated basis. The Groupholds liquidity reserves in form of committed and uncommitted credit lines in order to comply withan unexpected and extraordinary liquidity demand.
The amount of unused credit facilities as per end of the reporting year amounted to CHF 64.7 million (previous year: CHF 71.9 million).
New and committed credit lines for an amount of CHF 40.0 million with a duration of 3 years wereagreed upon in the previous year. In the year under review, an additional commited credit line in
the amount of CHF 15.0 million was settled. They ensure the funding of the future investment program and serve generally for the business financing. The Group always complied with the agreed
debt covenants. Debt covenants to be complied with are the following:
EBITDA: net interest costs= min. 4.0

Net debt: EBITDA= max. 3.0

Equity: total assets= min. 35 %The ageing of the financial liabilities is disclosed in Note 6.12 (see “Ageing of financial liabilities”).

99

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u p

6.9

o f

f i n a n c i a l

p o s i t i o n

Equity management

Objectives and principles of capital management
The objectives, principles and processes applied in capital management are:• safe-guarding of the going concern,• definition of a range of equity margins that reflect the operational and balance sheet risk,• a financial liability structure adapted to the asset structure,• adequate relation between equity and liabilities,• the realisation of an appropriate return on equity,• the distribution of a stable portion of the profit to the shareholders.
Equity ratio targets and pay-out ratio
Based on above target, Group Management aims at a long term equity ratio of approximately 50 %. The ordinary payout ratio corresponds to about 30 % of net profit. This ratio may deviates based on the general economic outlook andthe planned future investment activities.

6.10

Infor mation on shareholder’s equity

Reconciliation from total issued shares to the outstanding shares
2010

2009

Issued shares par value CHF 10.00 each (previous year: CHF 15.00)

854 000

854 000

Own shares held by the Group as per 1.1.

82 22585 042––

Purchase of own shares
Sale of own shares– 6 085–

Attribution of shares relating to bonus plan

– 1 740– 1 896

Attribution of shares related to options exercised––

Attribution of shares related to settlement of acquisitions

–

– 921

Own shares held by the Group as per 31.12.

74 40082 225

thereof reserved for issuance under option program

52 96552 965

thereof unreserved

21 43529 260Shares outstanding at 31.12.

779 600

771 775

Note to the movements in the shareholder’s equity
In the previous year potential claims of CHF 1.6 million for withholding tax were recognised as accrued expenses against share premium. Those accrued expenses are an effect of acquisitions of own shares. In the year under review theprovision of CHF 1.6 million has been released and the respective amount has been settled in cash.

100N o t e s

6.11

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Earnings per share

Basic earnings per average share outstanding
The basic earnings per average share outstanding in 2010 amount to CHF 18.59 (previous year:
CHF 7.41). The calclulation is based on the profit attributable to the equity holders of the parent
company, divided by the weighted average of shares outstanding.
2010

2009

Result attributable to the equity holders (in thousands CHF)

14 423

5 716

Shares outstanding as of 1.1.

771 775

768 958

–

–

3 949

2 517

Effect of the purchase of own shares
Effect of the sale/attribution of own shares
Effect of the issue of shares under option plans
Weighted average of shares outstanding
Basic earnings (result) per average share oustanding (in CHF)––

775 724

771 475

18.59

7.41

Diluted earnings per average share outstanding
The diluted earnings per average share outstanding in 2010 amount to CHF 18.59 (previous year:
CHF 7.41). They are calculated by adjusting the weighted average number of ordinary shares outstanding to include all dilutive potential ordinary shares.
The potential ordinary shares resulting from the issue of options under the employee stock option
plan (see note 7.1) had no dilutive effect due to the fact that the strike price (CHF 323) was above
the average share price (CHF 317) during the year under review (previous year: no dilutive effectbecause the average price of CHF 271 was below the strike price).
2010

2009

Result attributable to the equity holders (in thousands CHF)

14 423

5 716

Weighted average of shares outstanding

775 724

771 475

Dilutive effect of share options
Weighted average of shares outstanding (diluted)
Diluted earnings (result) per average share outstanding (in CHF)––

775 724

771 475

18.59

7.41

101

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u p

6.12

o f

f i n a n c i a l

p o s i t i o n

Financial liabilities

Details to current and non-current financial liabilities
in thousands CHF
Bank overdrafts
Bank loans
Finance leases
Other loans

31.12.2010

31.12.2009

412

394

16 501

10 511

4

213

471

–

Total current financial liabilities

17 38811 118Bank loans

5 055

107

Other loans

545

1 337

Total non-current financial liabilities

5 600

1 444

Total financial liabilities

22 98812 56231.12.2010

31.12.2009

Net financial liabilities to equity ratio
in thousands CHF
Total financial liabilities

22 98812 562– 10 110– 8 387

Net financial liabilities (-net cash)

12 8784 175

Equity127 457

133 024

10.10

3.14

./. Cash and cash equivalents

Net debt in % to equity102

N o t e s

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Loan structurein thousands CHF

2010
Weighted av. Interest due Year of
Currency interest rate Fix/Variable maturity

2009

Face
value

Carrying
amountFace
value

Carrying
amount

7 037

6 900

3 725

3 718

Fixed short term loan

CHF

0.65 %

V

2011

6 203

6 200

Fixed short term loan

EUR

1.33 %

V2011

10 276

10 265

Fixed long term loan

CHF

1.70 %

F

2013

5 234

5 000

93

91

21 80621 556

10 76210 618

4

4

221

213

4

4

221

213

Other bank loans
Total bank loans
Finance Leases

EUR

5.00 %

F

2010

Total finance leases

1 067

1 016

1 337

1 337

Total other loans

Other loans

EUR

0 %– 6.00 %

F

2012

1 067

1 016

1 337

1 337

Total Loans

22 87722 576

12 32012 168The difference from total loans to total financial liabilities consists of the bank overdrafts that are reported as current financial liabilities in line with IAS 39.

Ageing of financial liabilities
The financial liabilities as per December 31, 2010 are due as follows:in thousands CHF
Bank loans
Finance leases

Book value

Face value(undiscounted)

within6 months

within6 – 12monthswithin1 – 2 years

within2 – 5 years

21 55621 806

16 494

26

63

5 223

337

251

400

5 474

4

4

4

1 016

1 067

479

412

412

412

Trade/other accounts payable*

34 28334 28334 283

Total financial liabilities

57 27157 57251 672Other loans
Bank overdrafts

26* An ageing analysis is not readily available. Based on past experience, it can be reliably assumed that the full amount is due within less than 6 months.

The financial liabilities as per December 31, 2009 were due as follows:in thousands CHF
Bank loans
Finance leases

Book value

face value(undiscounted)

within6 months

within6 – 12monthswithin1 – 2 years

within2 – 5 years

10 618

10 76210 629

22

88

23

213

8
851

486

939

509

213

221

1 337

1 337

394

394

394

Trade/other accounts payable*

34 70334 70334 703

Total financial liabilities

47 26547 41745 939Other loans
Bank overdrafts

30* An ageing analysis is not readily available. Based on past experience, it can be reliably assumed that the full amount is due within less than 6 months.

103

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u po f

f i n a n c i a l

p o s i t i o nLoans to finance the BDL acquisition
In the course of the acquisition of the BDL group in 2006, two unsecured loans of totally CHF 24.0
million were taken up at an interest rate of 2.7 % with four years repayment term. The loans were to
be settled through annually equal instalments. The last instalment was settled in February 2010.
Mortgage secured loans
In both years under review, there were no loans secured by a mortgage.

6.13

Leasing liabilities

Finance leases
The financial lease liabilities are due as follows:

Present value

at year end, in thousands CHF

2010

2009

Interest

2010

2009

minimum lease
payments

2010

2009

within 1 year

4

213

–

8

4

221

Total finance leases

4

213

–

8

4

221

Operating leases
Liabilities from operating leases mainly relate to building rentals and will become due as follows:in thousands CHF

31.12.2010

31.12.2009

within 1 year

2 753

2 779

between 1 and 5 years

7 300

4 395

over 5 years

1 424

1 069

Total operating leases

11 477

8 243

In the year under review, operating lease expense does not include contingent rent (previous year:
CHF 0.2 million).

104

N o t e s

6.14

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Provisions
Other
provisions

Warranties

in thousands CHF

2010

2009

2010

2009

At 1.1.

4 650

6 102

1 653

Currency translation adj.

– 598

113

– 214

Total provisions

2010

2009

1 569

6 303

7 671

–

– 812

113

Provisions made

4 280

2 581

451

412

4 731

2 993

Provisions used

– 1 890– 2 350

– 207

– 209

– 2 097– 2 559

Provisions reversed– 781– 1 796

– 46

– 119

– 827

– 1 915

At 31.12.

5 661

4 650

1 637

1 653

7 298

6 303

Warranty provisions
The Group companies normally grant a 24-month warranty. The warranty provision is recognised
based on past experience as well as on specific projects. The warranty provision corresponds toroughly 2 % (previous year: 2 %) of net sales. The absolute increase is merely due to increased
sales. An analysis of previous years’ actual warranty expenses would not lead to a substantialchange of warranty provision required. Data from the past indicates that between 30 % and 50 % of
the warranty provision will be used in the subsequent year.
Other provisions
In 2007, an onerous contract provision in the amount of CHF 1.2 million was recognised as “otherprovision” that relates to a long term building rental contract that will be terminated before its final
term and that will not be used anymore as from late 2010. The impending loss corresponds to therental amount for the period during which the building will no longer be used. Besides that, theother provisions include pension liabilities according to IAS 19.

105

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u p

6.15

o f

f i n a n c i a l

p o s i t i o n

Pension obligations and pension costs

General information to the pension plans of the GroupThe pension costs for 2010 amounted to CHF 1.8 million (2009: CHF 1.7 million). Such costs consist of employer contributions relating to the defined contribution plans and pension costs relating
to the defined benefit plans.
The pension plans in Switzerland and France are regarded as defined benefits plans in line with
IAS 19. In both years under review, approximately 190 employees participated in the defined benefit plans. The Swiss plan is outsourced to a collective foundation whereas the plan of France is
outsourced to an insurance company. It can be assumed that the assets of both plans do not include Interroll shares.
Components of pension costsin thousands CHF

2010

2009

Costs of the defined contribution plans

– 927

– 913

Current service costs, gross– 1 005– 950

Employee contributions

326

336

Interest costs

– 375

– 357

Amortisation of actuarial losses

– 55

– 40

Expected return on plan assets

281

237

– 828

– 774

– 1 755– 1 687

Costs of the defined benefit plans
Total pension costs

The actual return on plan assets is in line with the return that can generally be expected based on
the agreement with the collective foundation. The expected future contributions will not changematerially in future years provided the number of insured employees remains stable.
Funded status for the defined benefit plansin thousands CHF, as per year end
Present value of defined benefit obligation
Fair value of plan assets
Pension liability

2010

2009

2008

2007

2006

– 12 151– 10 770– 9 478– 7 606– 6 943

9 882

9 357

8 402

6 381

5 760

– 2 269– 1 413– 1 076– 1 225– 1 183

Unfunded fair value of benefit obligations

– 239

– 243

– 205

–

–

Unrecognised actuarial (losses)/gains

1 856

1 174

923

1 038

1 183

Defined benefit obligation, net

– 652

– 482

– 358

– 187

–

– of plan liabilities

– 102

– 76

573

297

n/a

– of plan assets

35

68

14

8

n/a

History of experience adjustments106

N o t e s

t o

t h e

s t a t e m e n t

o f

f i n a n c i a l
p o s i t i o n
In t e r r o l l
G r o u p

Roll forward of the defined benefit obligationin thousands CHF

2010

2009

– 11 013– 9 683

Current service costs, net

– 679

– 614

Interest costs

– 375

– 357

Contributions from plan participants

– 326

– 336

Actuarial gain/(loss) on plan assets, translation diff.

– 645

– 228

Insurance premiums

284

267

Benefits funded/(paid), net

364

– 62

– 12 390– 11 013

Benefit obligation as per 1.1.

Benefit obligation as per 31.12.

In order to shorten the presented statement of financial position, the net benefit obligation is disclosed within the other long term provisions.
Roll forward of the present value of plan assets
in thousands CHF

2010

2009

Fair value of plan assets as per 1.1.

9 357

8 402

Expected return on plan assets

281

237

Actuarial gain/(loss) on plan assets, translation diff.

– 54

– 66

Insurance premiums

– 284

– 267

Employer contributions

620

653

Employee contributions

326

336

Benefits funded/(paid), net

– 364

62

Fair value of plan assets as per 31.12.

9 882

9 357

2010

2009

Investment categories
in %Equity securities

1.9

2.5

Debt securities

74.2

72.8

Real estate

17.6

16.8

Other investments
Total Investments in %

6.3

7.9

100.0

100.0

107

N o t e s
t o
t h e
s t a t e m e n t
In t e r r o l l
G r o u po f

f i n a n c i a l

p o s i t i o n

Roll forward of the unrecognised pension deficit
in thousands CHF

2010

2009

Unrecognised pension liabilities as of 1.1.

– 482

– 358

Pension costs

– 828

– 774

Contributions

620

653

Currency translation/plan expansion

38

–3

– 652

– 482

2010

2009

Discount rate

2.9

3.4

Expected return on plan assets

2.2

2.9

Expected benefit increases

0.5

0.5

Average future salary increases

1.5

1.9

Average fluctuation rate

10.0

10.0

31.12.2010

31.12.2009

Unrecognised pension liabilities as of 31.12.

Actuarial assumptions
in %

6.16

Tr a d e a n d o t h e r a c c o u n t s p a y a b l e

in thousands CHF
Trade accounts payable to third parties

14 717

12 312

Advances received from customers

2 852

12 266

Other liabilities

6 804

6 797

Accrued personnel expenses

6 440

6 118

Accrued interest
Other accrued expenses
Foreign currency forward contracts*
Total trade and other accounts payable

22

178

6 300

8 845

–

453

37 13546 516* see note 6.8

Advances received from customers mainly relate to larger projects within the Subsystems segment. Other liabilities include VAT and social security related liabilities. Accrued personnel expenses relate to accrued vacation and bonuses.

108N o t e s

7
7.1

t o

t h e

i n c o m e
s t a t e m e n t
In t e r r o l l
G r o u p

N o t e s t o t h e c o n s o l i d a t e d i n c o m e s t a t e m e n t
Personnel expenses

Details to personnel expenses and number of employees
in thousands CHF

2010

2009

Wages and salaries

68 38166 515Social security costs

10 55310 384

Pension costs (see note 6.15)

1 755

1 687

Other personnel related costs

2 358

2 340

Equity based personnel expenses to management personnel

1 234

596

Total personnel expenses

84 28181 522

Thereof production related personnel expenses

41 65339 992Average number of employees

1 255

1 206

In the period under review 1 740 own shares (previous year: 1 896) were attributed to management members as part oftheir bonus scheme. In each year 1 550 shares have been blocked for sale for a period of five years as of grant date.
The shares were valuated at market value of the attribution date.
Option plan
On March 3rd, 2006 the Board of Directors approved a management share option plan for the next five years. In thecourse of the first half year of 2010, the option life time and blocked period was extended by two years for plan participants still being employed without notice as per March 31st, 2010. Respective increase in value of the option (CHF 0.7
million) was debited to personnel expenses and credited to capital reserve.
The key data of the changed option plan is as follows:
Option life:

April 3, 2006 – September 30, 2013 (previously until September 30, 2011)

Blocked period:

April 3, 2006 – April 2, 2012 (previously until April 2, 2010)

Exercise period:

April 3, 2006 – September 30, 2013 (previously until September 30, 2011)

Strike price:

CHF 323.00 per registered share INRN

Reference price

Average INRN price from March 27, 2006 – March 31, 2006 less 4 %Option/share:

1 option entitles to acquire 1 registered share INRN

Option price:

CHF 15 per option109

N o t e s
t o
t h e
i n c o m e
In t e r r o l l
G r o u p

s t a t e m e n t

The following movements took place in the option plan in the years under review:
31.12.2010 attributed

exercised31.12.2009

attributed

exercised

52 9651.1.2009

Total options

52 96552 965

option life until 30.09.2013

45 965––

option life until 30.09.2011

7 000

52 96552 965

thereof not vested

45 96552 96552 965

thereof exercisable

7 000

–

–

All outstanding options have been attributed in 2006. The fair value at the grant date was CHF 4.7 million (CHF 88.64
per option). The employees contribution amounted to CHF 0.8 million (CHF 15 per option). The valuation of the option isalways calculated on the basis of the binomial method and is carried out by a specialised institute. Besides from above
data on the option plan, the following parameters were used for the valuation:• risk free interest rate of 2.82 %• volatility 25 %• yearly unchanged profit distribution of CHF 6 per INRN
• average share price CHF 337
The plan option is not subject to any vesting conditon after the vesting period has become effective.

7.2

Research and development

The Group incurred the following expenses for research and development during the years under review:in thousands CHF

2010

2009

Research and development

8 668

8 588

These expenses are mostly incurred to further develop and complete the product range of the segments. They are included in personnel- and other operational expenses as well as in depreciation on fixed tangible assets. No expenses
have been capitalized as the preconditions stated in IAS 38 are not met cumulatively.

110

N o t e s

7.3

t o

t h e

i n c o m e
s t a t e m e n t
In t e r r o l l
G r o u p

Other operating expenses

in thousands CHF

2010

2009

Office and administration

5 884

6 074

Provisions and allowances, net

3 707

323

Non-income taxes

1 193

1 267

Consultancy, auditing

3 993

3 423

Marketing

4 311

5 930

Freight

8 467

7 937

Commissions, bad debt adjustments

3 535

2 390

Building rent

3 174

3 388

Building maintenance

2 219

2 391

Maintenance on machinery, tools and moulds

3 199

2 726

Travelling and transportation

4 857

4 870

Consumables for production

3 334

2 931

618

732

4 530

3 349

Insurances
Other expenses
Loss on disposal of property, plant and equipment/intangible assets

488

398

53 50948 129in thousands CHF

2010

2009

Income from commissions, licences and freight

8 674

7 329

934

864

Realised gains on cash flow hedges–

344

Government grants received

84

83

Total other operating income

9 692

8 620

Total other operating expenses

7.4

Other operating income

Income from services111

N o t e s
t o
t h e
i n c o m e
In t e r r o l l
G r o u p

7.5

s t a t e m e n t

Financing resultin thousands CHF
Foreign exchange losses, net
Fair value changes of foreign currency forward contracts
Realized translation differences, net
Interest expenses
Financing expenses

2010

2009

–

– 213

– 1 072– 1 742

–

– 659

– 478

– 538

– 1 550– 3 152

Foreign exchange gains, net

993–

Fair value changes of foreign currency forward contracts

427

1 432

Realized translation differences, net

–

–

169

311

Financing income

1 589

1 743

Financing result, net39– 1 409

Interest income

The result from realized cash flow hedges is presented in the other operating income/expenses(see notes 7.3 resp. 7.4). As per year-end 2010 no cash flow hedges existed (see note 6.8). In theprevious year, the non-realized effects on cash flow hedges were presented in equity. Lines “Realized translation differences, net” are related to repayments of equity or equity like loans of consolidated subsidiaries. None of such transaction has incurred in 2010.

112

N o t e s

7.6

t o

t h e

i n c o m e
s t a t e m e n t
In t e r r o l l
G r o u p

Income tax expense

Components of income tax expensein thousands CHF

2010

2009

Income taxes relating to the current period

5 188

2 241

Income taxes relating to past periods, net

912

– 306

Current income tax expense

6 100

1 935

Due to temporary differences– 442– 5 073

Due to tax rate changes

– 86

– 104

Due to (recognition)/use of tax loss carry-forwards

331

– 471

Adjustments to deferred tax assets

98

– 314

Other effects

2

4

Deferred income tax expense/(income)– 97– 5 958

Total income tax expense

6 003– 4 023

Taxes on capital are included in other operating expenses (see note 7.3).
Deferred tax liabilities of CHF 0.2 million (previous year: CHF 0.2 million) have not been recognised for withholding and other taxes on the un-remitted earnings.
Reconciliation of effective tax ratein thousands CHF

2010

2009

Result before income taxes

20 426

1 693

Income tax expenses at the expected tax rate of 20.1 % (2009: 20.1 %)

4 106

340

(Non-taxable income)/non-tax deductible expenses, net– 301– 1 494(Reversal of)/write offs on deferred tax assets, net

98

– 314

Tax rate changes, net

– 86

– 104

Effect from deviation to tax rates in Group companies889– 1 854(Tax credits)/tax charges on prior years’ results, net

912

– 306

(use of unrecognised tax losses)/effect of unrecognised tax losses on thecurrent year’s result, net

387

– 361

Other effects

–2

70

6 003

– 4 023

Effective (total) income tax expense

The income tax expense analysis is based on the expected tax rate for an ordinarily taxed company in Switzerland.

113

N o t e s
t o
t h e
i n c o m e
In t e r r o l l
G r o u p

s t a t e m e n t

Tax effects on recognised and unrecognised carried forward losses
in thousands CHF

31.12.2010
notactivated

activated

31.12.2009
notactivated

activated

Expiry:
2010

–

–

155

–

2011

378

–

925

–

2012

394

–

404

–

2013

759

–

826

–

2014
2015 and later

597

–

1 089

–

20 541409

20 725

1 239

unlimited

3 631

2 490

3 869

4 228

Total

26 3002 899

27 993

5 467

Tax benefit

9 433

777

9 882

1 188

Thereof unrecognisable– 9 433

Netted out within tax units
Deferred tax assets
capitalized– 9 882
–

– 997

777

191

A tax effect of CHF 0.6 million resulted from new tax losses carried forward of CHF 1.6 million. Thiseffect was not capitalized (previous year: new tax losses of 10.0 million with a tax effect of CHF 2.8
million, whereof CHF 0.7 million was activated).
Deferred tax assets on unused tax losses carried forward and based on temporary differencies arecapitalized in case it is probable that such assets can be set off against future taxable profits. Dueto the probability to set off current tax losses carried forward against future profits in various subsidiaries, an amount of CHF 0.8 million has been capitalized in 2010 (2009: CHF 0.2 million). Interroll
considers the future set off probable based on approved business plans. The majority of non-capitalized deferred tax assets on losses carried foward concern US-based subsidiaries. The applicable tax rate for both years under review is 39 %.

114

N o t e s

t o

t h e

i n c o m e
s t a t e m e n t
In t e r r o l l
G r o u p

Attribution of defered tax assets/liabilities to items of the statement of financial positionin thousands CHF
assets31.12.2010

31.12.2009

Deferred tax

Deferred tax

liabilities

assetsliabilities

2 279

3 202

2 685

4 641

248

3 162

170

3 740

–

9

–

136

Inventory

271

139

142

92

Benefits of loss carry forwards

777

–

1 188

–

Receivables

144

210

110

429

Other assets

–

–

1

–

Total assets

3 719

6 722

4 296

9 038

Intangible assets
Property, plant and equipment
Financial assets

Long term debts

–

127

–

233

1 156

7 923

702

6 472

Short term debts

218

84

520

128

Other Liabilities

4

–

79

–

Total liabilities

1 378

8 134

1 301

6 833

Set-off– 4 276– 4 276– 5 395– 5 395

Total net

821

10 580202

10 476

Provisions

Deferred tax assets and deferred tax liabilities are netted within and between companies belonging to the same taxable unit.
The reduction of deferred tax assets and liabilities of net CHF 0.5 million (previous year: decreaseof CHF 7.5 million) corresponds to net deferred tax income recognised in the statement of comprehensive income of CHF 0.1 million (previous year: deferred tax income of CHF 6.0 million) and currency translation adjustements of CHF – 0.4 million (previous year: CHF 0.1 million). In the previous
year, deferred tax liabilities were additionnally increased by CHF 0.2 million due to acquisition
through business combinations. In 2009, an amount of CHF 1.8 million was taken out from deferred tax liabilities and allocated to other accrued expenes because the amount does not refer to income taxes.
In both years under review, current income taxes of CHF 0.1 million were credited to equity. No
taxes were recognised in the other comprehensive income in both years under review.

115

O t h e r
n o t e s / d i s c l o s u r e s
In t e r r o l l
G r o u p

8

Other notes/disclosures

8.1

Contingent liabilities and other commitments

There are no contingent liabilities in both years under review.

8.2

Related party transactions

Transactions with related parties
Volumein thousands CHF

Open payables

Category

2010

2009

31.12.2010

31.12.2009

Purchase of materials

a

3 326

4 402

605

624

IT Investments/IT Services

a

820

1 230

46

145

a+b

1 081

817

89

2

5 227

6 449

740

771

Other costs
Total purchases

Volumein thousands CHF

Open receivables

Category

2010

2009

31.12.2010

31.12.2009

Sale of material

a

6 604

5 540

1 054

1 019

Other income

b

446

385

97

94

7 050

5 925

1 151

1 113

Total services

Definition of related parties
Related parties are defined and categorised as following:a) Shareholders of INTERROLL HOLDING LTD. holding more than 3 % of the shareholder capital.
b) Members of the Board of Directors of INTERROLL HOLDING LTD. and legal entities that are directly controlled bythem.
c) Members of the Group Management of Interroll Group and legal entities that are directly controlled by them.
d) Local managing directors as well as people reporting to them (only for substantial transactions).

116

O t h e r

n o t e s / d i s c l o s u r e s
In t e r r o l l
G r o u p

Total compensation to the Board of Directors
Total compensation in the year 2010 to the Board of Directors of INTERROLL HOLDING LTD. is CHF 0.48 million (2009:
0.45 million). The detailed disclosure on the compensation to and shares owned by the Board of Directors and theGroup Management required by Swiss law are included in the notes to the financial statements of INTERROLL HOLDING LTD.
Total compensation to the Group Managementin thousands CHF

2010

2009

Salaries incl. bonus

3 910

3 540

Post-employment benefits

577

465

Other long term benefits

–

18

473

450

4 960

4 473

Equity based compensation
Total compensation to the Group Management

Explanation to the calculation methods and further notes to the total compensation

The calculation method according to IFRS deviates in two points from the calculation method applied for the compensation as per Swiss law, OR 663bis and 663c:a) The compensation for business cars results from all amounts recognized in the income statement including depreciation/leasing instalments. According to Swiss law, 0.8 % per month based on the acquistion value of the cars has been considered.
b) According to IFRS share-based payments are based on their market value at grant date. In both years under review,
1 550 own shares were attributed. In both years, the attributted shares are subject to a five years blocking period.
The difference of total compensation as per IFRS and as per OR of CHF 0.16 million (previous year: CHF 0.14 million)
is made up by business cars (CHF 0.04 million, previous year: CHF 0.03 million) and by share-based payments(CHF 0.12 million, previous year: CHF 0.11 million).
In the period under review as well as in the previous year no termination pay were executed and no loans were granted.

117

O t h e r
n o t e s / d i s c l o s u r e s
In t e r r o l l
G r o u p

8.3

Subsequent events

The consolidated financial statements were approved by the Board of Directors on March 3rd, 2011 and are subject tofurther approval by the General Meeting of the Shareholders on May 13, 2011.
In the end of November 2010, the Interroll Group announced that it will acquire the business activities of its current
license partner in Australia. Closing date of that transaction was agreed to be January 1st, 2011, on which Interroll will
also take over operational leadership. The acquired activities will be merged with the existing Interroll company in Australia. Intangible as well as tangible assets totalling CHF 1.2 million are taken over. Half of the purchase price was paidin November 2010 out of cash held by the Group. The rest was paid in January 2011. Conveyor Solutions Australia Pty.
Ltd. will contribute a turnover of CHF 4.0 million while the operating result will initially be immaterial.
No event has occurred between December 31, 2010 and March 3rd, 2011 which would reqiure adjustment to the carrying amount of the Group’s assets and liabilities as of December 31, 2010, or would require disclosuere in accordancewith IAS 10.

8.4

Scope of consolidation

Name

Location (country)

Function Owner

Interroll Holding AG

Sant’Antonino (CH)

F

0

CHF

Interroll SA

Sant’Antonino (CH)

P

HD

CHF

100.0

100 %

Interroll (Schweiz) AG

Sant’Antonino (CH)

S

HD

CHF

5 000.0

100 %Interroll Management AG

Sant’Antonino (CH)

F

HD

CHF

100.0

100 %

Interroll Fördertechnik GmbH

Wermelskirchen (DE)

S

DHO

EUR

25.6

100 %

Interroll Engineering GmbH

Wermelskirchen (DE)

P

DHO

EUR

1 662.2

100 %Interroll Automation GmbHSinsheim (DE)

P/S

DHO

EUR

2 000.0

100 %Interroll Holding GmbH

Wermelskirchen (DE)

F

HD

EUR

500.0

100 %

Interroll GmbH

Wermelskirchen (DE)

D

HD

EUR

25.0

100 %

Interroll Trommelmotoren GmbH

Wermelskirchen (DE)

P/S

DHO

EUR

77.0

100 %

Transtechnik GmbH

Wassenberg (DE)

P/S

DHO

EUR

25.6

100 %

Interroll SAS

Saint-Pol-de-Léon (FR)

F

HDE

EUR

2 808.0

100 %Interroll SAS

La Roche sur Yon (FR)

P/S

F

EUR

2 660.0

100 %Interroll SAS

Saint-Pol-de-Léon (FR)

S

F

EUR

61.0

100 %

Interroll Nordic AS

Hvidovre (DK)

S

DKP

EUR

67.1

100 %

Interroll Joki AS, Hvidovre

Hvidovre (DK)

P

HD

EUR

2 013.8

100 %Interroll Ltd.

Corby (GB)

S

HDE

GBP

0.0

100 %

Interroll Engineering Ltd.

Corby (GB)

D

HDE

GBP

0.1

100 %

Interroll España SA

Barbera del Valles (ES)S

HDE/TI

EUR

600.0

100 %

Interroll CZ sro.

Breclav (CZ)

S

HDE

CZK

1 000.0

100 %Interroll Europe BV

Emmeloord (NL)

F

HD

EUR

90.8

100 %

Interroll Polska Sp.z.o.o.

Warszaw (PL)

S

HD

PLZ

100.0

100 %

Interroll SA (Proprietary) Ltd.

Johannesburg (ZA)

P/S

HD

ZAR

1 500.0

100 %Share capital in 1 000

Ownershipin %Switzerland
8 540.0

Europe, Africa excl. Switzerland

118

O t h e rNamen o t e s / d i s c l o s u r e s
In t e r r o l l
G r o u p

Share capital in 1 000

Ownershipin %Location (country)

Function Owner

Interroll Corporation

Wilmington/N.C. (US)

P/S

HD

USD

65.0

100 %

Interroll Automation LLC

Jeffersonville (US)

P/S

HDE

USD

0.1

100 %

Interroll Dynamic Storage Inc.

Hiram/Atlanta (US)

P/S

HD

USD

0.0

100 %

Interroll Canada Ltd.

Aurora (CA)

P/S

HD

CAD

1 720.0

100 %

P/S

HD

CAD

0.1

100 %

Pindamonhangaba/S. Paolo (BR) P/S

E

BRL

1 000.0

100 %Interroll (Asia) Pte. Ltd.

Singapur (SG)

P/S

HDE

SGD

18 625.0

100 %Interroll Suzhou Co. Ltd.

Suzhou (CN)

P/S

SGP

CNY

16 959.9

100 %Interroll Australia Pty. Ltd.

Victoria (AU)

S

HD

AUD

51.2

100 %

Interroll (Thailand) Co. Ltd.

Bangkok (TH)

P/S

SGP

THB 100 000.0

100 %Interroll DS Asia Pacific Co. Ltd.

Bangkok (TH)

P/S

SGP

THB 100 000.0

100 %Interroll Japan Co. Ltd.

Tokio (JP)

S

SGP

JPY

10 000.0

100 %Interroll (Korea) Corporation

Seoul (KR)

P/S

SGP

KRW 100 000.0

100 %AmericasInterroll Components Canada Ltd. Concord (CA)Interroll Logistica Ltda
Asia, PacificFunction:

P = Production, S = Sales, F = Finance, D = dorming

Owner:

HD = INTERROLL HOLDING LTD., HDE = Interroll Europe BV, TI = Interroll SA, DHO = Interroll Holding GmbH, DKP = Interroll Joki AS,
F = Interroll SAS, Saint-Pol-de-Léon, E = Interroll España SA, SGP = Interroll (Asia) Pte. Ltd., Singapur

Movements within the scope of concolidation in 2010
Assets and liabilities of Inroll Ltd., British Virgin Islands, belonging to the scope of consolidation, were merged with Interroll (Schweiz) AG as per June 1st, 2010. Inroll Ltd. was thereafter liquidated. Furthermore Interroll Holding A/S has
been merged with its subsidiary Interroll Joki A/S as per end of May 2010. Also Interroll Financial Canada Ltd. in Aurora/
Toronto has been merged with its subsidiary Interroll Components Canada Ltd., Concord/Toronto as per January 1st,
2010. Assets of Interroll DS Asia Pacific Co., Thailand were transferred to Interroll (Thailand) Co. Bangkok. Interroll (Malaysia SDN. BHD. has been liquidated in late 2010. Further notes to changes in the consolidation range are disclosed innote 4.
Movements within the scope of concolidation in 2009
Interroll Dynamic Storage inc., Hiram (USA) as well as Interroll DS Asia Pacific Co., Thailand, were consolidated for the
first time in 2009. Interroll Manufacturing LLC, Wilmington/N.C. was merged into Interroll Corporation, Wilmington in2009. BDL Drum motors SA (PTY), Ltd., Johannesburg (South Africa) and Interroll Trommelmotoren BV in Herkenboschwere liquidated in 2009. Further notes to changes in the consolidation range are disclosed in note 4.

119R e p o r t
o f
In t e r r o l lt h e
G r o u p
G r o u p9

a u d i t o rReport of the Group Auditor

Repor t of the Statutor y Auditor on the Consolidated
Financial Statements to the General Meeting of
S h a r e h o l d e r s o f I N TE R R OLL HOLDI N G LTD . ,Sant’Antonino
As statutory auditor, we have audited the accompanying consolidated financial statements of INTERROLL HOLDING LTD, presented on pages 60 – 119 which comprise the consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity
and notes to the consolidated financial statements for the year ended December 31st, 2010.
Board of Directors’ Responsibility
The board of directors is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with International Financial Reporting Standards (IFRS) and therequirements of Swiss law. This responsibility includes designing, implementing and maintaining
an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The boardof directors is further responsible for selecting and applying appropriate accounting policies andmaking accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards aswell as International Standards on Auditing. Those standards require that we plan and perform theaudit to obtain reasonable assurance whether the consolidated financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control system. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates made, as well as evaluating theoverall presentation of the consolidated financial statements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

120

R e p o r t

o f

t h e
G r o u p
A u d i t o r
In t e r r o l l
G r o u p

OpinionIn our opinion, the consolidated financial statements for the year ended December 31st, 2010 givea true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight
Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.
We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

Herbert Bussmann					Samuel Dini
Licensed Audit Expert					Licensed Audit Expert

Auditor in Charge

Lugano, March 3rd, 2011121

F i n a n c i a ls t a t e m e n t so f

INTE R R OLL

H OL D IN G
LT D .
C o n t e n t

Financial statementsof INTERROLL HOLDING LTD.
Content
1

Financial statements of INTERROLL HOLDING LTD.

124

1.1

Balance sheet

124

1.2

Income statement

125

1.3

Statement of changes in equity

125

2

General information to the financial statements

126

2.1

Accounting policies

126

2.2

Principles of valuation

126

3

Notes to the financial statements

127

3.1

Accounts receivable

127

3.2

Own shares and options

127

3.3

Loans due from Group companies

128

3.4

Trade and other accounts payable

128

3.5

Financial liabilities

128

3.6

Provision for investment risks

129

3.7

Shareholder equity

129

3.8

Contingent liabilities

130

4

Other disclosures according to Swiss law

131

4.1

Risk assessment

131

4.2

Internal control system

131

4.3

Compensation of and shares held by the Board of Directors

132

4.4

Compensation of and shares held by the Group Management

133

5

Proposed appropriation of available earnings

134

6

Report of the statutory auditor

136

123

F i n a n c i a l
INTE R R OLL

1
1.1

s t a t e m e n t s
H OL D IN G
LT D

F i n a n c i a l S t a t e m e n t s o f INTE R R OLL H OL D IN G LT D .
Balance sheet

in thousands CHF

see notes*

31.12.2010

31.12.2009

A S S ET S
Cash and cash equivalents

753

112

Accounts receivable

3.1

472

2 889

Own shares

3.7

24 69825 01625 92328 017212 974

188 074

Total current assets
Investments
Loans due from Group Companies

9 505

48 105

Total non-current assets

222 479236 179

Total assets

248 402

264 196

1 137

7 348

3.3

E Q U IT Y AN D LIA B ILITIE S
Trade and other accounts payable

3.4

Tax provision
Financial liabilities

3.5

Total current liabilities

71

–

6 000

1 174

13 419Financial liabilities

3.5

11 92914 893

Provision for loan assets and investment risks

3.6

110 771

100 771

Other provisions
Total non-current liabilities

804

804

123 504

116 468

Share capital

3.7

8 540

12 810Share premium

3.7

19 07819 078

5 209

5 209

3.7

27 95932 386

General legal reserve
Reserve for own shares
Available earnings

62 93864 826

Total shareholder’s equity

123 724

134 309

Total liabilities and equity

248 402

264 196* See notes to the financial statements.

124

37

F i n a n c i a ls t a t e m e n t s
INTE R R OLL
H OL D IN G
LT D

1.2

Income statementin thousands CHF

2010

2009

Investment income

5 877

22 262

Royalty income

2 731

2 274

Interest income

912

3 463

Other operating income

4 923

6 895

Foreign currency exchange gains

2 691

549

Total income

17 13435 443Administrative expenses

–339

–692

Financial expenses–416–1 113Foreign currency exchange losses–––1 325–1 430

Other operating expenses–2 638–5 311

Investment expenses–18 725–6 900Total Expenses–23 443–15 446

Result before income taxes–6 30919 997

Personnel expenses

Income tax expense

–6

–27

–6 31519 970Reserve for own shares

Available
earnings

Total

34 30843 868

118 609

19 97019 970Result1.3

Statement of changes in equity

in thousands CHF
as of 1.1.2009

Share capital

17 080Capital reserves* Legal reserve

18 144

5 209

Result 2009
Reduction of par value–4 270Change of reservefor own shares
At 31.12.2009–4 270934

12 81019 0785 209–1 922988–

32 38664 826

134 309–6 315–6 315Result 2010
Reduction of par value–4 270–4 270Change of reservefor own shares
At 31.12.20108 540

19 0785 209–4 4274 427–

27 95962 938

123 724* The amount of capital reserves has not yet been confirmed by the Swiss Federal Tax Authorities

125

G e n e r a l
i n f o r m a t i o nt oINTE R R OLL
H OL D IN G
LT D

2

t h e

f i n a n c i a ls t a t e m e n t s

 e n e r a l i n f o r m at i o n t o t h e f i n a n c i a lGs tat e m e n t s

2.1

Accounting Policies

Current/Non-current distinction
Current assets are assets expected to be realised or consumed in the normal course of theCompany’s operating cycle or assets held for trading purposes. All other assets are classified as
non-current assets.
Current liabilities are liabilities expected to be settled by use of cash generated in the normal course of the Company’s operating cycle or liabilities due within one year from the reporting date. Allother liabilities are classified as non-current liabilities.
Foreign currency translation
Transactions in foreign currencies are recorded using exchange rates prevailing at the time of thetransaction. Gains or losses arising on settlement of these transactions are included in the current
year’s income under the line item foreign currency exchange losses/gains, net. Monetary assets
and liabilities denominated in foreign currencies are translated using the exchange rates prevailingat the balance sheet date. Any gains or losses resulting from this translation are also included in
the current year’s income, except for unrealised gains which are deferred.

2.2

Principles of valuation

Accounts receivable and payable, Cash and cash equivalents
Accounts receivable are stated at nominal value less any valuation adjustment for credit risks. Accounts payable are stated at nominal value. Cash and cash equivalents are stated at nominal value. Accounts receivable from Group companies arise from services provided by INTERROLLHOLDING LTD. and related interest and royalties billed. These services are recognised on an accrual basis.
Own shares and options
Own shares and options to buy own shares are stated at the lower of cost and fair value.
Loans
Non-current loans receivable are stated at nominal value less any valuation adjustments deemednecessary to reflect the credit risk. Non-current loans payable are stated at nominal value.
Investments
Investments are stated at cost less any valuation adjustments deemed necessary to recognise adecline other than temporary in value (impairment). Additional provisions are recognised for general investment risks.
Accrued expenses
Accrued expenses primarily relate to interest due on loans payable stated at nominal value and to
accruals for the compensation of the Board of Directors.
126N o t e s

3
3.1

t o

t h e

F i n a n c i a ls t a t e m e n t s
INTE R R OLL
H OL D IN G
LT D

N o t e s t o t h e F i n a n c i a l s tat e m e n t s
Accounts receivablein thousands CHF

31.12.2010

31.12.2009

Accounts receivable from third parties

40

1 817

Accounts receivable from group companies

429

879

Advance payments
Total accounts receivable

3.2

3

193

472

2 889

Own shares and options

In the year under review, the Company sold 6 085 own shares at an average price of CHF 356. In
the previous year, the Company has neither acquired nor sold any own shares. At year end 2010,
the company held 74 400 own shares with a carrying amount of CHF 24.7 million (2009: 82 225
own shares with a carrying amount of CHF 25.0 million). There is a reserve for own shares equal tothe original cost of CHF 28.0 million (previous year: CHF 32.4 million). In both years under review,
52 965 own shares are reserved to cover the management share option plan (see note 7.1 of theconsolidated financial statements).
1 740 shares (previous year: 1896) with a carrying value of CHF 0.5 million (previous year: CHF 0.5
million) were attributed to employees. No shares were attributed from the share option plan.
In the previous year, as part of the acquisition price, 921 own shares with a fair value of CHF 0.3
million were allocated to the seller of an entity acquired.

127

N o t e s
t o
t h e
F i n a n c i a l
INTE R R OLL
H OL D IN G
LT D

3.3

s t a t e m e n t s

Loans due from Group companies

The interest rates used were the following:

lowesthighestIn the year 2010

0.00 %

6.00 %In the year 2009

1.00 %

6.00 %The loans due from Group companies are normally redeemable with a notification periodof three months. As of year end, the total outstanding group loans amounted to CHF 9.5 million(2009: CHF 48.1 million). A valuation allowance of CHF 4.2 million has been accounted for onintercompany loans due.

3.4

Tr a d e a n d o t h e r a c c o u n t s p a y a b l e

in thousands CHF

31.12.2009

Accounts payable to third parties

75

59

Accounts payable to Group companies

231

2 330

Other accounts payable

4

37

827

4 922

1 137

7 348

31.12.2010

31.12.2009

Bank loans

–

6 000

Total current financial liabilities

–

6 000

Loans due from Group companies

11 92914 893

Total non current financial liabilities

11 92914 893

Total financial liabilities

11 92920 893

The following interest rates were used:lowesthighestIn the year 20102.25 %

5.50 %In the year 20092.50 %

5.00 %

Accrued expenses
Total trade and other accounts payable

3.5

Financial liabilities

in thousands CHF

128

31.12.2010

N o t e s

3.6

t o

t h e

F i n a n c i a ls t a t e m e n t s
INTE R R OLL
H OL D IN G
LT DProvision for investment risks

During the year 2003 as well as in 2008, the Group implemented internal changes in the financing
structure that generated an unrealised capital gain. Therefore the Company created a provision forinvestment risks that relates to investments in and loans due from group companies. Thereby, it isensured that the amount of shareholders’ equity presented of the parent company appears reasonable compared to the consolidated shareholders’ equity.

3.7

Shareholder equity

Composition of the share capital
The share capital consists of 854 000 fully paid-in registered shares with a par value of CHF 10
each (previous year: CHF 15). Each share entitles to equal dividend and voting rights.
Significant Shareholders (at least 3 % of the share capital)
The following table shows the number of shares held by the most significant shareholders as wellas their particiaptaion in percent.
31.12.2010

31.12.2009

Number of sharesparticipationin %Number of sharesparticipationin %D. Specht and family

108 645   

12.72

108 645   

12.72

B. Ghisalberti/E. Moreschi and family

112 743   

13.20

112 543   

13.18

N. Axmann and family

39 017   

4.57

39 017   

4.57

Sarasin Investmentfonds AG

85 215   

9.98

82 727   

9.69

Corisol Holding AG

43 832   

5.13

46 051   

5.39

Public (floating)464 548   

54.40

465 017   

54.45

Total

854 000

100.00854 000

100.00Shareholder/Shareholder Group

Reserve from capital contribution
In connection with the capital increase due to the initial public offering in 1997, the company received a share premium of CHF 28.5 million. The transaction cost of the initial public offering  (CHF
9.4 million) was deducted from this amount. In the year 2007, CHF 6.1 million have been transferred from the share premium to the reserve for own shares. In the year 2008, CHF 5.1 million wasreclassified to share premium due to the reduction of the reserve for own shares. In the previous
year, additional CHF 1.0 million was added back to share premium with the consequence that theoriginal amount of CHF 6.1 million was credited back to reserves from capital contribution.
Reserve for own shares
The reserve for own shares equals the purchase price of own shares held as of balance sheet date (see note 3.2).

129

N o t e s
t o
t h e
F i n a n c i a l
INTE R R OLL
H OL D IN G
LT D

3.8

s t a t e m e n t sContingent liabilities

INTERROLL HOLDING LTD. has issued a guarantee for an existing shared credit facility in theamount of CHF 42 million in favour of Interroll (Schweiz) AG.
In addition, INTERROLL HOLDING LTD. issued letters of continuing financial support in favour ofthe following Group companies:
Country

Company

Germany

Interroll Automation GmbH, Sinsheim (DE)FranceInterroll SaS, La Roche sur Yon (FR)Switzerland

Interroll (Schweiz) AG, Sant’Antonino (CH)Interroll Holding GmbH, Wermelskirchen (DE)CanadaInterroll Canada Ltd., Aurora (CA)Interroll Components Canada Ltd., Concord (CA)INTERROLL HOLDING LTD. carries joint liability in respect of the federal tax authorities for value
added tax debts of all Swiss subsidiaries.

130O t h e r

d i s c l o s u r e s

a c c o rd i n gt o
S w i s s
INTE R R OLL
H OL D IN G

l a w
LT D

4 D
 i s c l o sur e s a c c o rd i n g t o S w i ss
l e g i s l at i o n
4.1

Risk assessment

The risk management coordinates and aligns the risk management processes and reports to theBoard of Directors on a regular basis on risk assessment and risk management. Organizational andprocess measures designed to identify and mitigate risks at an early stage have been assessed tobe satisfactory by the Board of Directors.

4.2

Internal control system

The Board of Directors and management of the Group are responsible for establishing andmaintaining adequate internal control over financial reporting. INTERROLL HOLDING LTD.’s andthe Interroll Group’s internal control system was designed to provide reasonable assurance to theInterroll Group’s management and Board of Directors regarding the reliability of financial reporting
and the preparation and fair presentation of its published consolidated financial statements.
All internal control systems no matter how well designed have inherent limitations. Therefore, eventhose systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliancewith the policies or procedures may deteriorate.
Interroll Group management assessed the effectiveness of the Group’s internal control over financial reporting as of December 31, 2010. Based on its assessment, management has concluded
that, as of December 31, 2010, the Interroll Group’s internal control over financial reporting was effective based on those criteria (see notes to the consolidated financials statements. principles of
consolidation.)131

O t h e r
d i s c l o s u r e s
INTE R R OLL
H OL D IN G

4.3

a c c o rd i n g
LT D

t o

S w i s sl a w

Compensation of and shares held by the Board of Directors

The compensation of the members of the Board (BoD) and the shares held by them at year end are disclosed in accordance with the Swiss Code of Obligations 663bis and 663c. The total compensation amounted to:in thousands CHF

Cash 

Shares/
Options Social Security*  Other Benefits Total
Compensation

Shares held as of 31.12.

Voting Rights
in %Kurt Rudolf
2010

P, CC

150

17

167

800

0.12

2009

P, CC

150

17

167

700

0.12

2010

VP

75

12

87

60

0.01

2009

VP

50

7

57

–

0.00

2010

AC

50

7

57

20

0.00

2009

AC

50

7

57

20

0.00

Urs Tanner

Paolo Bottini

Philippe Dubois
2010

AC

50

7

57

100

0.02

2009

AC

50

7

57

100

0.02

Horst Wildemann
2010

CC

50

6

56

–

0.00

2009

CC

50

6

56

–

0.00

2010

50

7

57

112 743

17.42

2009

50

7

57

112 543

18.50

2010

–

–

–

108 645

16.79

2009

–

–

–

108 645

17.86

Marco Ghisalberti

Ingo Specht

Total Board of
Directors
2010

425

–

56

–

481

222 368

34.36

2009

400

–

51

–

451

222 008

36.50

P : Chairman of the BoD
AC :Audit Committee
VP : Vice Chairman of the BoD CC :Compensation Committee* Social Security costs consist of employers- and employees contributions to the state run Swiss social security system.

The Board of Directors does not hold any options to buy shares of INTERROLL HOLDING LTD.

132

O t h e r

4.4

d i s c l o s u r e s

a c c o rd i n gt o
S w i s s
INTE R R OLL
H OL D IN G

l a w
LT D

Compensation of and shares held by the Group Management

The compensation of the members of the Group Management and the shares held by them at year end are disclosed inaccordance with the Swiss Code of Obligations 663bis and 663c. The total compensation amounted to:Equity based compensation

Remuneration (net) fix  variable*

Shares** Options Social Security Total
 Other Benefits  Compensation

2010

595

826

273

–

387

41

2 122

2009

595

432

260

–

389

41

1 717

2010

1 589

532

80

–

500

74

2 775

2009

1 517

451

82

–

494

75

2 619

2010

2 184

1 358

353

–

887

115

4 897

2009

2 112

883

342

–

883

116

4 336

CEO (highest)

Other members

Total GroupManagement

The difference between provisions made in the previous year and the actually paid-out bonuses is netted with the variable compensation planned for the year under* review.
** In the period under reivew 1 550 (previous year: 1 550) own shares were attributed. The shares may not be sold for a period of five years as of grant date (previous year:
five years). Share based payments correspond to tax values.

Shares and options owned by the members of Group management and their related parties were the following:
Shares as of  31.12.

Options as of  31.12.

2010

2009

2010

2009

Paul Zumbühl

11 39810 19810 000

10 000Ralf Garlichs

–

–

2 500

2 500

Didier Lermite

–

–

2 970

2 970

Heinrich Droste

532

532

2 970

2 970

Jürg Häusermann

950

600

3 340

3 340

Kwang-Heng Seng

220

220

1 200

1 200

13 10011 55022 98022 980Total

133

 r o p o s e dPa ppr o pr i a t i o n
INTE R R OLL
H OL D IN G
LT D

5

o f

a v a i l a b l ee a r n i n g s

 r o p o s e d a ppr o pr i a t i o n o f a v a i l a b l ePe a r n i n gs

Appropriation of available earnings
The Board of Directors proposes to the general assembly to appropriate the available earnings as
per end of the year under review as follows:in thousands CHF

2010

2009

Result–6 31519 970Available earnings carried over from previous year

64 82643 868Change of reserve for own shares

4 427

988

To be carried forward

62 93864 826

Appropriation to reserves from capital contributions*–4 504–To be carried forward

58 43464 826* The appropriation to reserves from capital contributions has not yet been confirmed by the Swiss Federal Tax Authorities.

Distribution out of reserves from capital contributions
The Board of Directors proposes to the general assembly the distribution out of reserves from
capital contributions in of CHF 5 per share (previous year: capital reduction CHF 5). If the distribution
is aproved, the respective settlement will be processed in the subsequent week to the general
assembly 2011.
in thousands CHF

2010

2009

Reserves from capital contributions carried over from previous year

19 07819 078

Appropriation from available earnings*

4 504

–

Distribution of CHF 5 per share (free of withholding tax)**–4 270–Reserves from capital contributions to be carried forward

19 31219 078* The appropriation to reserves from capital contributions has not yet been confirmed by the Swiss Tax Authorities.
** All shares held by Interroll Holding AG or by its subsidiaries neither have voting- nor dividend rights. The number of shares entitled todividends may increase or decrease due to the exercise of options or changes in the number of own shares held. The maximum number ofshares entitled to dividends is 854 000. Accordingly the maximum amount of distribution is CHF 4,27 million.

134

135

R e p o r t
o f
INTE R R OLLt h es t a t u t o r y
H OL D IN G
LT D

6

A u d i t o r

R e p o r t o f t h e S t a t u t o ry Aud i t o rRepor t of the Statutor y Auditor on the Financial
Statements to the General Meeting of Shareholders of
INTE R R OLL H OL D IN G LT D , S a n t ’ A n t o n i n o
As statutory auditor, we have audited the accompanying financial statements of INTERROLL HOLDING LTD, presented on pages 122 – 133, which comprise the balance sheet, income statement,
statement of changes in equity and notes for the year ended December 31st, 2010.
Board of Directors’ Responsibility
The board of directors is responsible for the preparation of the financial statements in accordancewith the requirements of Swiss law and the company’s articles of incorporation. This responsibility
includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or
error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers the internal control
system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of accounting estimates
made, as well as evaluating the overall presentation of the financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.

136

R e p o r t

o f

t h e
s t a t u t o r ya u d i t o r
INTE R R OLL
H OL D IN G
LT D

OpinionIn our opinion, the financial statements for the year ended December 31, 2010 comply with Swisslaw and the company’s articles of incorporation.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight
Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial
statements according to the instructions of the board of directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law
and the company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG

Herbert Bussmann

Samuel Dini

Licensed Audit Expert

Licensed Audit Expert

Auditor in Charge

Lugano, March 3rd, 2011137

K e y F ig u r e s o f t h e I n t e r r o ll G r o u p
in CHF million, if not noted differently

2010

I n f o r m a ti o n f o r I n v e st o r s
2009

2008

2007

2006

The shares of Interroll Holding AG have been listed at the Swiss Exchange SIX since June 5th, 1997 (Investdata: INRN; Reuters;
INRN.S; Security number: 637,289).

Incoming orders/net sales
Total incoming orders

285.2

238.9

347.8

375.9

313.4

Net sales with third parties: Components

178.1

157.9

223.7

235.2

196.5

Net sales with third parties: Subsystems

105.0

76.1

134.2

135.6

115.5

Total net sales

283.1

234.0

357.9

370.9

312.0

Profitability
EBITDA

35.8

18.8

58.2

67.5

44.5

in % of net sales

12.6

8.0

16.3

18.2

14.3

EBITA

24.8

8.0

48.0

56.6

36.3

in % of net sales

8.8

3.4

13.4

15.3

11.6

EBIT

20.4

3.1

43.4

45.2

30.6

in % of net sales

7.2

1.3

12.1

12.2

9.8

Result

14.4

5.7

33.8

31.9

20.2

in % of net sales

5.1

2.4

9.5

8.6

6.5

2009

2010

2008

2007

2006

Interroll Holding Ltd.

Information on the Interroll share

Via Gorelle 3

Number of registered shares

854 000

854 000

854 000

854 000

854 000

Number of average outstanding shares

775 724

771 475

762 323780 715799 084

Tel. +41 91 850 25 25

Number of outstanding shares per (31.12.)

779 600

771 775

768 958

762 112796 692

Fax +41 91 850 25 05

6592 Sant’Antonino, Switzerland

www.interroll.com
Market price: highest

CHF

371

320

581

632

434

Market price: lowest

CHF

267

173

215

420

300

Market price: per year end

CHF

368

307

256

581

434

CHF million

286.89236.55196.85442.79345.76

Ratio

19.79

41.38

5.82

13.15

17.10

2007

2006

Market capitalization per 31.12.
P/E Ratiowww.interroll.com/ir (Investor Relations)Contact

Paul Zumbühl
CEOTel. +41 91 850 25 25
investor.relations@interroll.com

Cash Flow
Operating cash flow

18.7

20.4

41.9

68.5

39.8

in % of net sales

6.6

8.7

11.7

18.5

12.8

Free cash flow

–8.4

–6.0

18.6

42.7

–10.4

in % of net sales

–3.0

–2.6

5.2

11.5

–3.3

Total investments/capital expenditures

27.4

21.9

22.4

24.0

10.7

Balance sheet
Total assets
Goodwill in % of equity
Net financial assets (debts)

700

102.70 %600

68.92 %

500

215.7

236.8

255.1

224.5

35.14 %

400

7.3

8.3

7.9

9.2

12.3

1.35 %

300

–12.9

–4.2

4.4

–6.1

–19.9

– 32.43 %200

Gearing (net debts/equity)

0.10

0.03

–

0.05

0.17

0.69

0.20

–

0.09

0.50

Equity

127.5

133.0

130.7

124.9

114.6

Equity ratio (equity in % of assets)

60.3

61.7

55.2

49.0

51.0

Return on equity (in %)

11.1

4.3

26.5

26.7

18.9

– 66.22 %
2006

100
2007

2008

10.4

1.6

22.3

22.6

18.4

1 255

1 206

1 315

1 275

1 166

Net sales per employee (in thousands CHF)

226

194

272

291

268

Productivity (Added value/total personnel expenses)

1.98

1.66

2.21

2.14

1.96

2009

2010
2010

2009

2008

Impressum

Values per share (in CHF)
Par value as per year end

Other key figures

Average number of employees© Swissquote
136.49 %211.3

Indebtedness factor (net debts/cash flow)

RONA (Return on net assets, in %)Interroll Share Price (yellow curve) compared to SPI/SXGE (black curve)

Reduction of par value

10.00

15.00

20.00

30.50

37.50

–

5.00

5.00

10.50

7.00

Concept and coordination:
Interroll Holding Ltd., Investor Relations

Distribution out of reserves from capital contributions*

5.00

Earnings per average share outstanding

18.59

7.41

44.00

44.17

25.38

Layout/DTP:

Cash flow per average share outstanding

24.09

26.43

54.93

87.77

49.80

Victor Hotz AG, Corporate Publishing & Print, ­Steinhausen

Equity per share outstanding as per year end

163.49172.36170.01163.89143.82* The distribution out of reserves from capital contributions in the year under review is proposed by the Board of Directors for the annual general assembly of May 13th, 2011.

This annual report is also available in German.
The German version is binding.

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Portrait of
the Interroll Group

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Interroll is one of the world‘s leading manufacturers of key products for unitrservices, distribution and in various segments of industry. The products includeaused primarily within the area of food processing, airport logistics, postalleload handling systems, internal logistics and automation. These solutions areueasy-to-integrate drive solutions such as drum motors for belt conveyors, DC-nnpowered and non-powered rollers for conveyor systems; energy-efficient flowastorage modules for compact pallet/container racking systems in distributionlcentres; crossbelt sorters, belt curves and other user-friendly conveyor modulesolfor cost-efficient material flow systems. Interroll serves more than 23,000 custo-rmers, mainly regional plant manufacturers and engineering specialists as weller

as system integrators, multinational companies and users. Interroll has 1,500

I

n

t

employees working in 28 companies and is listed on the SIX Swiss Exchange.

Conveying

Storage

Distribution

Managed by a strategic holding company based in Sant’Antonino, Switzerland, the group operates with two business divisions: “Global Sales & Service”
markets and distributes the full range of Interroll products according to
specified customer needs, while “Products & Technology” oversees the global
Centres of Excellence and other production sites, with responsibilities ranging from R&D, Product Management and Strategic Purchasing to Production
Technology and Manufacturing.

The key figures of the Interroll Group are presented at the inside of thisfront cover. The detailed financial report starts on page 57.

www.interroll.com · www.interroll.com/ir (Investor Relations)