Annual
23
24

ReportContents

04

LEM at a glance

06

Letter to shareholders

10

Financial performance12

Our five businesses
Automation
Automotive
Renewable Energy
Energy Distribution and High Precision
Track

22

Leading the world

24

Information for investors

26

Corporate governance report

38

Compensation report
Auditor’s report

48

Financial Report of LEM Group
Consolidated financial statements
Notes to the consolidated financial statements
Auditor’s report

92

Financial Report of LEM HOLDING SA
Financial statements
Notes to the financial statements
Auditor’s report

101Group subsidiaries

LEM at a glance

LEM – Life Energy Motion
A leading company in electrical measurement, LEM engineers the best solutions for energy and mobility, ensuringthat our customers’ systems are optimized, reliable andsafe. Our 1,800 people in 17 countries transform technology
potential into powerful solutions. We develop and recruit thebest global talent, working at the forefront of megatrends
such as renewable energy, mobility, automation and digitization. Listed on the SIX Swiss Exchange since 1986, thecompany’s ticker symbol is LEHN. —> lem.com

LEM purpose
At LEM, we are proudly united behind one clear purpose:
We help our customers and society accelerate the transition to a sustainable future. This purpose is not new to us,
nor a nebulous dream; it is our company’s raison d’être andis central to our strategy and future growth plan. LEM’s current sensors play a key role in the energy and mobility transition underway, and, with the megatrends of decarbonizationand electrification accelerating, we are in a unique position
to capture further growth. More information about LEM’s
sustainability ambitions and strategy to ensure that our own
operations and value chain, processes and targets support
our purpose can be found in the Sustainability Report.

Download our
Sustainability Report
2023/24

LEM Annual Report 23 | 24

4Highlights in 2023/24– Achieved sales growth of 7.2% at constant exchange rates despite a challenging environment.
– Maintained a high R&D ratio of 8.3% of sales
to further expand technology leadership andlaunched 11 new products.
– Collaboration signed with TDK Corporation fornext-generation chips for LEM’s integrated current sensors, whose performance parameters will
benefit automotive and industrial customers.
– R&D capacities further strengthened with two
new R&D centers in Munich, Germany, and Sofia,
Bulgaria, and expansion of R&D site in Shanghai,
China.
– Expanded LEM’s global production network witha new facility in Penang, Malaysia, to supply
the Asian markets as well as the US and Europe
from Asia.
– Advanced the sustainability strategy by setting
ambitious targets and KPIs such as reducing
Scope 1 and Scope 2 emissions by 90% by2025.

Key figuresin CHF millions

2019/20

2020/212021/222022/232023/24

Orders received

322.4

362.0

576.4

465.2

243.3

Book-to-bill ratio

1.05

1.20

1.54

1.14

0.60

Sales

307.9

301.0

373.4

406.4

405.8

Gross margin
in % of sales
EBIT
in % of sales

142.7

140.6

177.3

192.2

189.2

46.4%

46.7%

47.5%

47.3%

46.6%

58.3

60.9

88.4

92.2

81.1

18.9%

20.2%

23.7%

22.7%

20.0%

Net profit for the year

60.7

55.6

72.4

75.3

65.3

EPS basic (CHF)

53.27

48.79

63.48

66.12

57.35

Dividend per share (CHF)

40.00

42.00

50.00

52.00

50.001

Operating cash flow

73.6

50.9

50.4

87.0

74.4

Investing cash flow

(14.7)(13.5)(21.0)(26.5)(31.6)

31.3.2020

31.3.2021

31.3.2022

31.3.2023

31.3.2024(43.1)Net financial cash/(debt)

10.2

(1.6)

(23.5)(21.8)

Shareholders’ equity

117.4

131.9

161.2

173.6

176.7

Equity ratio (in % of assets)

51.0%

49.9%

53.5%

53.0%

51.3%

Market capitalization

1,210.7

2,082

2,554

2,241

1,945

Employees (in FTEs)

1,497

1,448

1,575

1,716

1,808

1 Proposal of the Board of Directors to the Annual General Meeting of Shareholders on 27 June, 2024.

Sales per business

Regional sales breakdown

in CHF millions

in CHF millions

180

180

150

150

120

120

90

90

60

60

30

30

0

19/20

20/21

21/22

22/23

23/24

0

19/20

20/21

21/22

22/23

Automation

Automotive

China

Rest of Asia

Renewable Energy

Energy Distribution &High Precision

EMEA

Americas

Track

5

23/24

LEM Annual Report 23 | 24

Letter to shareholders

Dear Shareholder,
The challenge of the 2023/24 financial
year was to respond to the increasing
complexity of the political and economic
situation in the world. Looking back, we
see two different trends in the two
half-year periods. The financial year got
off to a good start, and LEM was able tobuild on the excellent performance ofthe previous year. Improved supply
chains enabled the delivery of theaccumulated order backlog and thus
strong sales growth. The lower orderintake compared to the previous year
was to be expected due to the normalization of order patterns to pre-pandemic
levels and customers’ continued highinventory levels.
From the third quarter of the reporting
year, there was a significant economic
slowdown in some key markets.
China in particular, which had already had
a subdued start, developed into a moredifficult market with a significant
decline in sales. Competition in the fieldof e-mobility intensified and stocksof components for solar energy werestill high.
Supported by its robust business model,
which is founded on global megatrends,
LEM performed reasonably well inthis challenging environment. Overall, we
continued to develop our markets, todrive forward our innovation projects andto further optimize our operational
infrastructure.

LEM Annual Report 23 | 24

6

Sales level maintained despite strong negative
currency effect
At CHF 405.8 million, we were able to maintain sales
at the previous year’s level, even though the currency effect had a strongly negative impact. At constantexchange rates, LEM achieved sales growth of 7.2%.
The normalization of customer order patterns is reflected in incoming orders of CHF 243.3 million. At
CHF 81.1 million, EBIT was 12.1% lower than in theprevious year, primarily as a result of higher productcosts and increased R&D and administration expenses. The EBIT margin reached 20.0%, compared to22.7% in the previous year. Net profit amounted to
CHF 65.3 million, after CHF 75.3 million in the previous financial year. The Board of Directors will propose to the Annual General Meeting on June 27,2024, that a dividend of CHF 50 per share be distributed for the 2023/24 financial year.
Heterogeneous development in the businesses
The slowdown in the economic environment as wellas customers’ continued destocking and reduced
willingness to invest were particularly noticeable in
the Automation business, which traditionally develops in line with the global economy.
Automotive achieved weak growth, with developments varying greatly from region to region. Growth
was driven by good sales in EMEA and South Korea.
In contrast, sales in China, the single most important
market, declined against the backdrop of an increasingly competitive environment.
Renewable Energy recorded a good overall businessperformance, albeit with regional variations. The majority of customers are located in China but export alarge proportion of their products, which means thatthe business also benefits from the good momentum
in the USA, for example. The fact that manufacturersof solar inverters and distributors continued to havefull stocks had a negative impact.
Energy Distribution & High Precision achieved modest growth in an increasingly competitive environment that also affected OEMs. The DC meter forcharging stations continued to sell very well, although growth slowed significantly in the second
half of the year.

Track developed strongly in the reporting year, supported by the periodic retrofit business and the positive market environment. The business is subject tovery long cycles and benefited from a high orderbacklog.
Challenges in China balanced out by other regions
In the Chinese market, LEM was confronted with adifficult environment. This was due to slow economic growth, declining exports of solar inverters, lower
sales of products for e-mobility and significantly
negative currency effects. LEM also saw some market share loss in the highly competitive e-mobility
and renewable energy sectors. Increased speed andcompetitive pressure are the biggest challenges in
China. In this environment, we implemented measures to become faster and more agile, focusing on
greater customer proximity, increased local R&D andstrengthened regional decision-making.
The other Asian markets, particularly Korea and Japan, recorded a broad-based upturn and solid business, partially offsetting the decline in China.
The EMEA region performed well initially, but experienced a significant economic slowdown over thecourse of the year. LEM was able to reduce orderbacklogs in the first half of the year, after which themarket weakened noticeably.
The performance of the Americas region was mixed.
This is due to the partial slowdown from the second
quarter onwards, which occurred in the Automation
segment due to an overall subdued investment activity, and in the Renewable Energies segment as aconsequence of political uncertainties.
Megatrends will continue to give tailwind
LEM is benefiting from fundamental, environmentally-friendly developments in the areas of electrification, renewable energies and e-mobility. These megatrends will continue to dominate in the future. LEM
consistently exploits the potential of these megatrends. For example, products for EV and hybrid vehicles already account for over 90% of sales in the
Automotive business.

In a period characterized by economic uncertainty,
the importance of LEM’s technology platform, broad
range of applications and comprehensive productportfolio, combined with its global presence in research and development, production and sales, has
once again been confirmed.
Further milestones in innovation
LEM continued to drive innovation in the 2023/24
financial year in order to consolidate and further expand its technological leadership. The R&D ratio remains high at 8.3% of sales, and LEM launched 11
new products.
An important milestone in terms of innovation is thepartnership with TDK Corporation. TDK will supply
next-generation chips for LEM’s integrated current
sensors, whose outstanding performance parameters will benefit our customers in the automotive andindustrial markets. Also worth mentioning are theinnovative solutions for battery management in the
Automotive business. The components set standards in the cost-effective fulfillment of redundancy
requirements, which is extremely important to OEMs.
LEM also further expanded its research and development capacities in the reporting year. Two new R&D
centers were opened in Munich, Germany and Sofia,
Bulgaria, and the site in Shanghai, China, was expanded to also host R&D activities.
Global production network expanded with fifth
plant in Penang
LEM’s customers today are having increased focus
on the resilience of their suppliers and are looking fordual sourcing options. To meet these demands, LEM
has expanded its manufacturing capabilities with a
new production facility in Penang, Malaysia. The new
production site enables LEM to supply the Asianmarkets as well as the USA and Europe from Asia. The
site is also well positioned in proximity to major semiconductor manufacturers.
The new production facility has manufactured its first
products and will expand its capacity significantly inthe future. The fifth plant complements the global
network of existing production facilities in Beijing,
Sofia, Geneva, and Tokyo.

7

LEM Annual Report 23 | 24

Letter to shareholders

Dr. Libo Zhang to be elected as new member ofthe Board of Directors
The Board of Directors will propose to the Annual
General Meeting the election of Dr. Libo Zhang as
member of the Board of Directors. Dr. Libo Zhang is
an independent Board Professional and Corporate
Finance Advisor. Among other mandates, she is amember of the Board of Directors of the Swiss technology group VAT. Previously, Ms. Zhang was CFO of
the automotive manufacturer Borgward Group AG in
Germany and of FFG Europe & Americas, a worldwide
specialist in the tooling machine industry. She has
many years of experience in management positionsin the areas of finance, controlling and commercial
processes in international industrial companies. Ms.
Zhang is a German citizen and holds a PhD in Economics and an MBA from Georg-August University in
Göttingen, Germany. The Board of Directors is convinced that with her background, know-how andexperience, Ms. Zhang will be a very valuable contributor to the future of LEM.
Sustainability strategy driven forward
Over the financial year 2023/24, LEM is proud to report a strong improvement on sustainability to continue helping its customers and society accelerate
the transition to a sustainable future. Solid foundations have been grounded to build up the LEM sustainability strategy.
On the governance side, a dedicated team has beencreated with clear roles, responsibilities, and accountabilities throughout the organization from theStrategy Committee to local Green Committees. A
Double Materiality Assessment has been conducted
highlighting the eight ESG material topics LEM will
focus on in the next few years. KPIs for measuring
target achievement were defined for those priority
areas to comply with the indirect counterproposal to
the Responsible Business Initiative in Switzerland,and especially the Due Diligence Transparency Ordinance (regarding Minerals and Metals from Conflict
Area and Child Labor), while making progress towards compliance with the EU Corporate Sustainability Reporting Directive. Furthermore, concrete actions were implemented to improve LEM’s ESG
posture and reduce its carbon footprint such as
management remuneration linked to Scope 1 and 2
emissions reduction.

LEM Annual Report 23 | 24

8

Detailed information on the importance of sustainability for LEM’s business strategy and purpose, andon the ESG priorities, can be found in the standalone
Sustainability Report published for the first time.
Outlook
LEM expects market development to be moderate in
the current financial year. The main reason for someheadwind is that it will still take time for customers to
reduce their inventories, particularly in the Renewable Energy and Automation markets. Based on forecasts from our customers, we expect the situation to
improve during the second half of 2024/25.
In the medium to longer term, however, we remain
optimistic: the megatrends that are driving all areasof our business are unbroken. LEM will continue tobenefit from this, and we are committed to our R&D
roadmap and continue to invest accordingly.
Sincere thanks
After this challenging, intensive and successful year,
our thanks go above all to our employees. They put
their energy, skills and experience to work for LEM
every day. On behalf of the Board of Directors andthe Executive Committee, we would like to express
our sincere thanks for this. We would also like tothank our customers for their trust and you, ourshareholders, for your continued long-term support.

Andreas Hürlimann
Chairman of the Board of Directors

Frank Rehfeld
Chief Executive Officer

Life
LEM is following a clear purpose: To help our customers
and society accelerate the transition to a sustainable
future. Competent and determined employees work
tirelessly to fulfill this purpose and develop innovations
together with customers and suppliers. We work at theforefront of megatrends such as renewable energy,
mobility, automation and digitization. We collaborate
with universities to attract emerging talents who willcontribute new ideas to reach our purpose.

EnergyLEM is in a unique position: our business is facilitating
the enormous changes needed to make the pursuit of alow-carbon future a reality. A wide range of applications
we serve – electric vehicles, charging stations, renewable energy, trains – rely on our innovative components
to monitor energy consumption and optimize performance. Our current sensors can be found in low-carbon
industries and technologies that are critical to a sustainable future.

MotionThe electronic sensor industry is changing fast, being
shaped by continuous technological breakthroughs.
The rapid rise in the electrification of the world is driving
change faster than ever before. We are focused andmoving fast to capture growth opportunities in all of ourmarkets. We are investing heavily in the research anddevelopment of new technologies and next-generation
applications.

9

LEM Annual Report 23 | 24

Financial performanceSales
LEM maintained sales at prior year level with CHF
405.8 million (full year 2022/23: CHF 406.4 million).
At constant exchange rates, sales increased by
7.2%. In the EMEA region, there was the strongest
growth of 22.6%, while the Rest of Asia saw an increase of 15.9%. Americas decreased 5.0% while
China was down 24.2% year-on-year due to the economic slowdown. At constant exchange rates,
growth in Rest of Asia was 26.0%, while the decline
in China was only 15.3%. Starting from the previous
year’s peak, bookings further normalized to CHF
243.3 million (CHF 465.2 million); the book-to-billratio was 0.60.
Profitability
Gross profit for the financial year 2023/24 decreasedby 1.6% to CHF 189.2 million (CHF 192.2 million). The
gross profit margin decreased slightly from 47.3% to46.6% and was in line with the long-term average.
The gross margin was impacted by higher costs forelectronic components, provisions for slow moving
stocks and positively influenced by the improved
business mix. SG&A costs were 9.3% higher at CHF
74.4 million (CHF 68.1 million) due to LEM’s investments in digitalization projects, such as the first successful launches of the new ERP system, and buildup costs for the new production facility in Malaysia.

Sales per businessIn addition, severance costs resulted from the layoffof 40 employees. Overall, SG&A costs as a percentage of sales increased to 18.3% (16.8%). LEM continued its investments in future applications andopened two new R&D centers in Germany and Bulgaria, expanded the R&D site in China and increased
the headcount overall by 30 engineers. This build-up
is reflected in the increase in R&D costs by 5.3% to
CHF 33.9 million or 8.3% of sales (CHF 32.2 million;
7.9%).
The EBIT declined by 12.1%, from CHF 92.2 million
to CHF 81.1 million. The EBIT margin was down from
22.7% to 20.0% due to the increased SG&A andR&D expenses.
Financial expenses increased from CHF 1.3 million to
CHF 2.8 million due to an increase in interest rates
and higher average debt. Exchange rate effects dueto the Swiss franc appreciation had a negative impact of CHF 3.3 million (CHF 1.9 million).
The effective tax rate was 12.9% due to the increasein deferred tax assets as a result of the increase in
the Canton of Geneva tax rate from 1 January 2024
and the sale of an IP to LEM China. Without these
one-off effects, the tax rate would have been at
15.5%.

Sales per region
12%

14%
30%

29%

15%

39%
17%

LEM Annual Report 23 | 24

10

20%

24%

Automation

Energy Distribution

China

EMEA

Automotive& High Precision

Rest of Asia

Americas

Renewable Energy

Track

Net profit decreased from CHF 75.3 million to CHF
65.3 million, mainly due to the lower operating result,while lower taxes had a slightly supportive effect. As
a result, the net profit margin decreased to 16.1%(18.5%).
Cash flow and balance sheet
Operating cash flow amounted to CHF 74.4 million(CHF 87.0 million), while free cash flow totaled CHF
42.9 million (CHF 60.5 million). The balance sheet
remains robust, with net debt limited to CHF 43.1 million. As of March 2024, shareholders’ equity reached
CHF 176.7 million, resulting in an equity ratio of 51.3%(53.0% as of March 2023).

Outlook
LEM expects market development to be moderate in
the current financial year. The main reason for someheadwind is that it will still take time for customers to
reduce their inventories, particularly in the Renewable Energy and Automation markets. Based on forecasts from customers, LEM expects the situation to
improve during the second half of 2024/25.
In the medium to longer term, however, LEM remains
optimistic: the megatrends that are driving all areasof the business are unbroken. LEM will continue tobenefit from this and is committed to it’s R&D roadmap and continue to invest accordingly.

Selected financial figuresin CHF millions

April to March

Orders received

2023/242022/23

Change

243.3

465.2

– 47.7%

405.8

406.4

– 0.1%(216.6)(214.2)

Income statement
Sales
Cost of goods sold
Gross profit

189.2

192.2

Gross profit margin (in %)

46.6%

47.3%

Sales expenses(29.5)(29.1)

Administration expenses(44.9)(39.0)

Research & development expenses(33.9)(32.2)

Other income

0.2

0.2

Operating profit

81.1

92.2

20.0%

22.7%

Financial expenses

(3.2)

(1.7)

Financial income

0.4

0.4

(3.3)

(1.9)

Operating profit margin (in %)Foreign currency exchange effectProfit before tax

75.0

88.9

Income taxes(9.6)(13.6)Net profit– 1.6%– 12.1%– 15.7%

65.3

75.3

16.1%

18.5%

Cash flow from operating activities

74.4

87.0

– 14.5%

Free cash flow

42.9

60.5

– 29.2%31.3.2024

31.3.2023

Net profit margin (in %)Equity

176.7

173.6

Equity ratio

51.3%

53.0%

11

– 13.3%

LEM Annual Report 23 | 24

Our five businesses
Automation

Activity
Automation is one of LEM’s traditional businesses. It
focuses on current and voltage sensors for electrical
motors and drives. LEM sensors secure efficientmonitoring, control, regulation, energy saving, fault
detection and comfort.
The core business is power drives for industrial manufacturing, robots and production lines. Other applications include large drives for elevators, forklifts,
cranes, pumps and steel mills. Sensors for small- andmedium-power applications go into tooling machines, heating, ventilation and air-conditioning(HVAC) as well as end-consumer products such asheat pumps.
Market
The market is linked to the investment cycle in industrial manufacturing. Over the cycle, it is developingin parallel with the global economy at an annual
growth rate of 3%.
A major market trend is robotization, which will accelerate over the next five to ten years, with AI paving the way for smarter robots. Electrification ofheating in residential buildings through heat pumps
will boost this application. Energy savings are a major
climate-related growth driver.
The market is pushing for smaller power drives andstriving for modularity as well as space and cost savings. Accordingly, there is increased competition forsmall power drives (<100A), while competition forlarge power drives is less intense. With an estimatedmarket share of around 30%, LEM is the market
leader.
2023/24
The automation business reported sales of CHF
120.0 million in the reporting period, compared with
CHF 136.3 million of the previous year. Considering
the negative exchange rate effects, sales fell by
5.5%.

LEM Annual Report 23 | 24

12

The business largely developed in line with the global economic trend. The first half of the year was relatively solid. Among other factors, LEM benefited
from the trend towards sustainable and customer-oriented solutions in manufacturing, particularly in
EMEA. In the second half of the year, the automation
business was slowed down by the more difficult
economic conditions as well as high inventories. In
China, sales weakened slightly due to declining exports. In Europe, LEM has won new projects for ICS(Integrated Current Sensors) products used for
drives and heat pumps, which will lead to future
sales.
Innovation
The Automation business launched two highly interesting integrated current sensing products, both
based on Hall-sensor technology, targeting the robotics and automation markets. As part of the collaboration with TDK Corporation, which was agreed in
2023, LEM is developing best-in-class ICS, based on
TDK’s next generation TMR (Tunnel Magnetoresistance) technology, which will bring high accuracy
and speed in the same device.
Outlook
LEM is confident that the automation business will
return to growth in the current financial year. Incoming orders have stabilized for the most part and are
already increasing again in some areas. Customers
have reduced their inventories. Companies are planning new projects again, particularly for low-power,
low-voltage drives, which are used in industrial
equipment, but also in consumer-related products
such as heat pumps, HVAC and fans, and for which
LEM’s ICS products are used.
In Japan, the semiconductor industry is expected togrow, and suppliers are already ordering components to be prepared for the expected upturn.

INDUSTRIAL PRODUCTION

Automation sensors are used in industrial
manufacturing equipment such as toolingmachines, robotics, and conveyor belts
for production lines.
CONSUMER-REL ATED

Energy savings are driving demand for sensors
in heating, ventilation, air conditioning(HVAC) products such as fans, coolers, andheat pumps.
HMSR
DA

GO

Ventilation unit
(Outdoor)

Moving manufacturing platform
with welding robots

HLSR-DA

Control unit
(internal)

HO-NP

LKSR

HMSR

Our five businesses
Automotive

Activity
Automotive is specialized in developing and manufacturing current sensors that measure electricalparameters in battery management, power inverters
and on-board chargers. For battery management,
LEM offers intelligent sensors for start/stop architectures combining a unique know-how in current sensing technologies together with expertise in battery
technologies. Sensors for motor control are integrated in the inverter module to measure current signals
at very high speeds. The charging system productrange offers dedicated technologies to support
transfer energy subsystems from AC to DC and DC to
DC with high- and low-voltage applications, and also
to measure and protect against leakage current.
LEM works with the world’s major car, bus and truck
manufacturers (OEMs) and tier-1 suppliers. The green
car sector represents more than 90% of the Automotive revenues, reflecting LEM’s strategic focus onbattery electric (EVs) and plug-in hybrid vehicles.

Market
The e-mobility revolution is creating substantial demand for current sensors. Battery systems are rapidly evolving as integrated circuits combine multiple
functions together with the current measurement
and activation shunts. Motor control is shifting fromstandalone current sensors to integrated field sensors, and V2X (Vehicle-to-everything, a vehicularcommunication system) is becoming the norm foron-board charging, requiring leakage sensors tomonitor the integrity of the electrical system.
LEM estimates its own share in the market for current
sensors for e-mobility applications at 16%. Competition is intensifying for OEMs, tier-1 suppliers andconsequently also for tier-2 suppliers such as LEM.
However, there will be short- and long-term growth
opportunities, as LEM offers unparalleled experiencein automotive current sensing, with the largest portfolio in the industry.
2023/24
Sales remained almost stable year-on-year at CHF
98.6 million, which is the result of the negative currency effect. At constant exchange rates, sales wereup by 6.8%.

LEM Annual Report 23 | 24

14

The growth was driven by strong sales in EMEA andSouth Korea. In both regions, LEM saw strong demand for products for battery management systems,
engine control and onboard chargers. LEM has won
three important development contracts for battery
management from two of the largest European
OEMs. These orders will lead to strong sales in Europe and America in the current year and beyond.
LEM is working on further projects for on-board chargers and battery management with OEMs in Europe
and America. In China, the most important market,
sales were below the previous-year period. However,the cost initiatives introduced, and the enhanced customer focus began to show the desired improvements.
Innovation
LEM continued to drive forward product innovation
at a high rate in 2023/24. Examples include LEM’s
famous HAH3 product family, suitable for high-power
motor control and inverter applications, as well as
the HC5FW automotive current sensors which havebeen further optimized. LEM is also developing novel battery current sensors that meet the highest ASIL
(Automotive Safety Integrity Level) requirementswith minimal size and bi-directional on-board chargers with dedicated residual current sensing solutions. The new LEM smart shunt solution for battery
management in EV- and hybrid vehicles has been
introduced with two truck OEMs in Europe and theAmericas. To intensify and accelerate product innovation in Asia, LEM is building up R&D activities inShanghai as an extension to the locations in Beijing
and Tokyo, which is planned to open in June. The
focus will be on product development and customer-specific applications in battery management.
Outlook
China, the largest market for e-mobility, will continue
to grow in the current financial year, and LEM expects considerable growth rates. Overall growth isalso expected for Japan in 2024/25. By contrast,
growth in Korea is likely to be weaker, as its exports
are mainly destined for Europe and the USA, wherevolumes are expected to remain stable or potentiallyweaker. Chinese car manufacturers are expected togain market share by penetrating the European markets. LEM strives to consolidate and expand its market position in China through innovation and costdown initiatives.

BATTERY MANAGEMENT

Highly accurate and reliable sensors provide all
the required information to improve the efficiency
and safety of the charging and discharging
process of the battery management system.
MOTOR CONTROL

HMSR

Pressing the accelerator pedal sends a signal
to motor control to pull power from the batteries inorder to increase torque and speed. Reliable
sensors are integrated in the inverter module tomeasure current signals at very high speeds
to assure smooth, jerk-free acceleration.

DCDT-SF

Electric traction motor
Electronics + inverter
DC/DC converter
Onboard charger

Internal combustion engine
Lead acid battery

HBCT

HAH6

High-voltage battery

HC16

CAB SF 1500

HAH3DR-S06

Our five businesses
Renewable Energy

ActivityIn the Renewable Energy business, LEM develops
and produces sensors that are specifically designed
for renewable power systems to control the flow andwaveform of electrical energy sent to the grid fromrenewable energy systems. They measure the current to help solar power plants, windmills and battery
storage to work at their maximum efficiency. LEM
customers are manufacturers of inverters (OEMs),
whose customers are installers or distributors of solar equipment.
LEM’s first sales of sensors for industrial photovoltaics were in 1992. Today there are new opportunities
for the sale of current sensors in hybrid solar inverters, to use the power generated for household appliances or to feed it into the grid. Similarly, LEM’s
first sales of sensors for wind turbines in Germany
were in 1990. Today, the company sells products forhighly complex wind park projects, often in offshore
locations. There is also an increasing demand forcommercial energy storage, with very large systems
to store energy in battery parks used to provide stability to the grid.
Market
The Renewable Energy market is expected to continue growing in the upcoming years. The market isled by sensors for grid and hybrid solar applications.
Solar installations doubled between 2021 and 2023,
reaching 400GW. Consolidation has taken place inEurope, and the market has largely moved to Asia,
especially China. New opportunities emerge in consumer markets for solar as people install more photovoltaics at home with hybrid solar applications,which allow for temporary power storage in a battery.
With the transition to renewable energy generation,
there is also an increasing expansion of wind energy,both offshore and onshore, particularly in Europe.
LEM is the leading player in the market with an estimated market share of 40%.

LEM Annual Report 23 | 24

16

2023/24
The Renewable Energy business increased sales by
5.6% to CHF 70.8 million in the 2023/24 financial
year. Exchange rate effects had a strong negative
impact. In local currencies, growth amounted to
14.8%.
The business saw strong demand from EMEA, Americas, Japan and India in the first half of the financial
year. This compensated for declining business in
China, where exports of solar energy generationequipment have slowed down, and destocking was
taking place at Chinese manufacturers and their distributors.
Starting from this good level, there was a slowdown
from the third quarter onwards. Demand in the areaof domestic installations declined seasonally, whilecustomers in Europe also had high stock levels.
Price pressure was noticeable in both China and Europe.
Innovation
Innovation milestones in the Renewable Energy business in the 2023/24 financial year included the introduction of a new OLCI (Open Loop Coreless Integral) sensor concept for high-current applications inwind turbines and for hydrogen electrolyzers. In addition, the sensor solutions for the latest generationof 400kW string inverters will be further improved
and faster sensors for EV charging modules will be
developed.
Outlook
LEM expects growth in China, as inventories have
now returned to normal levels. The fundamental
growth trend for renewable energies is continuing in
the Chinese market. In Europe, it will still take sometime to reduce inventories.
With a medium-term view, LEM is working to strengthen its market position through measures such as
faster product development, cost-efficient solutions, greater customer proximity and faster time tomarket.

SOL AR INVERTER

Every house with a photovoltaic system needs
an inverter to convert the solar DC electricity into
AC electricity.
LDSR measures AC and DC leakage currents intransformerless photovoltaic systems to ensure
the safety of people and installations. Primarily
used on the DC side of the inverter, HMSR SMS
measures AC and DC currents with high accuracy
and high immunity to external interference.
On the AC side, newly launched LWSR supports
a lower levelized cost of energy (LCOE).

LDSR
0.3-NP

AC
DC

DC

AC

Solar inverter

HMSR
30-SMSLZSR

Our five businesses
Energy Distribution andHigh Precision

Activity
Solutions from LEM’s Energy Distribution and High
Precision business target power-supply-based applications for the charging and smart grid infrastructure
as well as sophisticated high-precision equipment.
LEM is supplying sensors and metering solutions tomake electric vehicle charging stations more reliable
and smarter. The key product is an integrated DC meter for electric vehicle fast charging stations, for which
LEM has developed in-house expertise in metrology tocomply with European and US regulatory standards.
LEM’s smart equipment improves electricity networks by measuring electrical parameters to enable
control rooms to automate, monitor remotely andshare real-time equipment data. Power-supply-based
applications that utilize devices with power electronics (chargers, DC links, batteries, inverters and/or
rectifiers) all require efficient power control, monitoring and protection. Furthermore, ultra-precise current sensors are essential for the test and measurement sector, e.g. for testing batteries and EVs, aswell as for medical equipment such as MRI scanners,
for which LEM products have been the standard for
decades.
Market
The largest market segment is sensors for smart grid
infrastructure. The main trend is the replacement oftraditional current transducers with low power sensors (Rogowskis and LPCTs). This segment is growing at around 9% per year. The fragmentation of thecustomer base is the biggest obstacle to faster
growth.
In the second largest market segment, sensors andmetering solutions for charging infrastructure, large
customers are increasingly seeking integrated solutions to certify the metering at the charger level.
Charging for electric trucks will bring opportunities
in mega chargers and overnight chargers. This market segment is growing much faster. The attractiveness of the market is also reflected in the entry of
new providers of metering systems and charging infrastructure in Europe. The third segment is sensors
for high-precision applications such as testing andmeasuring equipment and medical devices, which
are achieving solid growth. LEM estimates its overallmarket share at 14%.

LEM Annual Report 23 | 24

18

2023/24
Sales increased by 2.6% to CHF 60.9 million compared to the previous year. Excluding the negative
exchange rate effects, growth totaled 8.2%.
The DC meter for EV charging stations was a strong
driver, particularly in the first half of the year. There
was a noticeable slowdown in the second half of theyear, as some customers in Europe with large inventories postponed their orders. Products for smart
grids developed solidly due to the favorable growth
rates in these markets, although customers wererather reluctant to invest at the end of the financial
year. The testing and measurement business performed well in the first half of the year due to gooddemand from the e-mobility sector, which invested
in the development of batteries. There was a slowdown in the second half of the year, in line with thegeneral slowdown in e-mobility. In medical technology, the first half of the year was also good, followed
by a slowdown in the second half of the year.
Innovation
LEM continues to work on the development pipelineof metering solutions. The focus is on cost optimization and system integration for the DC meter. By theend of 2025, a new DC meter will be launched in themarket that is cheaper, has more functions and ismore compact. A 100A energy meter has beenlaunched for small DC chargers. LEM is also investing
in metering solutions for mega chargers for trucks.
Outlook
For metering solutions for charging infrastructure,
LEM is aiming for further growth in the current financial year, primarily in Europe, where e-mobility ismost widely accepted. Based on its strong position
in EMEA, LEM is also expanding its focus to theemerging American market for EV charging stations.
Additional momentum will be provided by the next,
more cost-effective product generation, which iscurrently under development.
For the smart grid, test and measurement as well as
medical devices market segments, LEM expects investment by customers to increase again.

DC FAST-CHARGING STATIONFOR ELECTRIC VEHICLES

DC fast chargers provide power to the car battery
directly and quickly, which is essential for
convenient long-distance driving and for fleets.
The AC/DC power module enables the conversion
from alternating current to a direct current.
Sensors ensure the control loop function, which
regulates the stability and power of power
modules.

DC meterLESR 25-NP

AC
DC
CDSR 0.07-TP

Our five businesses
Track

Activity
The first LEM products in the 1970s were sensors inlocomotives for trains, trams and metros. Today, theTrack business includes on-train sensors that control
power converters to regulate the speed and powerof locomotives as well as inverters that regulate energy for air-conditioning, heating, lighting or electrical doors. In Europe, where railroads often moveacross national borders, LEM’s specially designed
energy metering solutions make sure the electricity
use is precisely accounted for.
Trackside sensors are for infrastructure along therails, such as in substations, crossing gates, track
circuits, control and safety systems, and signaling
and point machines. These minimize train service
interruptions due to equipment breakdown and reduce lifecycle costs.
MarketAlthough growth is not as fast as that of new application areas, the legacy Track business continues torecord solid year-over-year growth of around 3%.
Electric trains will continue to replace diesel trains,and many countries are investing in the electrification of railroads and more public transportation.
These are fundamental long-term infrastructure investments by governments and therefore the market
is characterized by project-related long investment
horizons. LEM is the clear market leader in this business.

LEM Annual Report 23 | 24

20

2023/24Starting from a weak previous-year base, the Trackbusiness achieved in the financial year 2023/24 a
29.1% jump in sales to CHF 55.5 million. At constantexchange rates, sales increased by as much as
35.4%. Momentum was exceptionally high in thefirst half of the financial year, settling into solid
growth in the second half.
The periodic retrofit business for the renewal of energy meters for locomotives in various EU countries
ensured high demand in EMEA. Track also recordedrobust growth in China, supported by a positive market environment.
Innovation
Due to the long project-related investment horizons,the product renewable cycles are longer in the Trackbusiness than in other areas of the LEM Group. In thereporting period, one focus was on the renewal of
the DVM voltage sensor family. The DVM productfamily comprises a compact range of voltage sensors designed for high and medium voltage measurements, which feature a unique compact designand deliver exceptional overall accuracy.
Outlook
LEM assumes that the Track business, which is characterized by long investment cycles, will remain on
its usual growth path in the coming years. The business of retrofitting energy meters for locomotives inthe EU will continue to provide stimulus. LEM has
received a major new order from a European state
railroad, which will run over a period of three years.

TRACTION

LEM Traction sensors are used in converters toregulate speed and power of locomotives aswell as in auxiliary systems such as ventilation,lighting, etc. In addition, our products are used forenergy metering to make sure the electricity
use is precisely accounted for.
TRACKSIDE

Privatization of rail networks means
new requirements such as monitoring tracks
to minimize service interruptions. Our new
HTRS family of sensors features DC and
AC measurement with the same performancein an ultra-compact, robust design.

TEMA 4G

AC/DC

LTC
SeriesDVM

HTRS

Leading the world inelectrical measurement

LEM headquarters
Geneva, Switzerland

PR
OD
DUCTI
ON
N || RR&
D || SALSALESPROU CTI O
&D
ES
|
|
AG
EN
TS
DI
STRI
BUTO
AG E NTS DISTR IB UTO RS

A leading company in electrical measurement, LEM engineers the best solutions forenergy and mobility, ensuring that ourcustomers, systems are optimized, reliable,
and safe.

LEM Annual Report 23 | 24

22

EMEA

Geneva, Switzerland
Frankfurt, Germany
Vienna, Austria
Brussels, Belgium
Randers, Denmark
Paris, France
Padova, Italy
Skelmersdale, UK
Lyon, France
Sofia, Bulgaria
CHI NA

BeijingShanghai
Shenzhen
Xian
Hefei
Taipei, Taiwan
Wuhan
AMERI CAS

Milwaukee, Wisconsin
Detroit, Michigan
Bridgewater, New Jersey
Columbia, South Carolina
Los Angeles, California
REST OF ASI A

Pune, India
Seoul, South Korea
Tokyo, Japan
Penang, Malaysia

New production facility
Penang, Malaysia

Our 1,808 people in 17 countries transform
technology potential into powerful solutions andsupport our customers on a global scale.
LEM has expanded its production capacities
in the financial year 2023/24 with a new
production facility in Penang, Malaysia.

The new production facility enables LEM to
supply the Asian markets as well as the US andEurope from Asia. The new plant complements
the global network of existing production
facilities in Geneva, Beijing, Sofia and Tokyo.

23

LEM Annual Report 23 | 24

Information for investors

Share price development LEM HOLDING SA (LEHN)
compared to SPI

LEM share price (+242.3%)
SPI Index rebased (+88.3%)

in CHF
3,500
3,000
2,500
2,000
1,500
1,000
500
0

31.3.1431.3.15

31.3.16

31.3.1731.3.18

31.3.19

31.3.20

31.3.2131.3.2231.3.23

31.3.24

Source: Bloomberg

Share information
Symbol

LEHN

Listing

SIX Swiss Exchange

Nominal value

CHF 0.50

ISIN

CH0022427626

Swiss Security Number (Valor)

2 242 762

Key figures for the LEM share2023/242022/23

In number of shares, CHF

1,140,000

1,140,000

Year high1

2,350

2,440

Year low1

1,568

1,364

Year-end (March 31)1

1,706

1,966

Market capitalization as per March 311 (in CHF millions)

1,945

2,241

Number of shares

Average daily trading volume (shares)1

731

540

Earnings per share

57.35

66.12

Equity per share

154.98152.31

Ordinary dividend per share

50.00252.00

1 Source: SIX
2 Proposal of the Board of Directors to the Annual General Meeting of Shareholders 2024

Dividend policy
LEM targets a payout ratio significantly above 50% of the consolidated net profit for the financial year.
For the period 2023/24 the Board of Directors proposes to the Annual General Meeting on June 27, 2024,
the distribution of a dividend of CHF 50.00 per share which corresponds to a payout ratio of 87.3%.

LEM Annual Report 23 | 24

24

Dividend andpayout ratio

Dividend in CHF
Payout ratio in %

60

120%

50

100%

40

80%

30

60%

20

40%

10

20%

0

13/14

14/15

15/16

16/17

17/18

18/19

19/20

20/21

21/22

22/23

23/24 1

Investor contact
Andrea Borla,
Chief Finance Officer
Phone: +41 22 706 1250
E-mail: investor@lem.com
Share register contact
areg.ch ag
Phone: +41 62 209 16 60
E-mail: info@areg.ch

0%

1 Proposal of the Board of Directors to the Annual General Meeting of Shareholders 2024

Number of registered shareholders
1 – 499

31.3.2024

31.3.2023

1,646

1,422

500 – 4,999

62

63

5,000 – 49,999

9

850,000 and more

3

3

1,720

1,496

31.3.2024

31.3.2023

Institutional shareholders

42.9

45.2

Private individuals

25.8

25.8

LEM employees, managers, and Board

7.0

6.9

Treasury shares

0.1

0.0

Nonregistered shares

24.2

22.1

Total

100.0

100.0

Total

Shareholders by categoryin %Financial calendar
2024
June 27, 2024 Annual General Meetingfor the financial year 2023/24
July 2, 2024 Dividend ex-dateJuly 4, 2024 Dividend payment dateJuly 26, 2024 First quarter results 2024/25
November 11, 2024 Half year results 2024/25

2025
February 7, 2025 9 months results 2024/25
May 27, 2025 Full year results 2024/25
June 26, 2025 Annual General Meetingfor the financial year 2024/25
July 1, 2025 Dividend ex-dateJuly 3, 2025 Dividend payment date

25

LEM Annual Report 23 | 24

Corporate
governancereportLEM Annual Report 23 | 24

26

The following information complies with the Directive on Information relating to Corporate Governance of the SIX Swiss Exchange (SIX) and the disclosure rules of the Swiss Code of Obligations.
In order to enhance the clarity of this chapter, reference is made to other parts of this Financial
Report and our website (www.lem.com). Key elements are contained in the Articles of Incorporation.
1.

Group structure and shareholders

Group structure
LEM HOLDING SA is domiciled at Route du Nant-d’Avril 152, CH–1217 Meyrin. LEM’s registered shares are listed on the main
segment of the SIX Swiss Exchange (LEHN, security no. 2 242 762; ISIN 0022427626). On 31 March 2024, the market capitalization was CHF 1,945 million. LEM Group is structured into Asia and Europe & Americas regions. Appropriate segment reporting
pursuant to IFRS is contained in note 3 of the consolidated financial statements. All companies in LEM Group are listed under“Scope of consolidation” in note 26 of the consolidated financial statements, with their respective company names, registeredoffices, share capital and the relevant percentages of shares held. There are no other listed companies in the scope of consolidation.
Significant shareholders
The following shareholders held 3% or more of the share capital and voting rights:
31.3.2024
In number of shares, percent of shareholding

Werner O. Weber and Ueli Wampfler, in Zollikon/
Wollerau, Switzerland, through WEMACO Invest
AG and Voltano AG in Cham, Switzerland

31.3.2023

SharesIn %SharesIn %599,13952.6%

592,500

52.0%

Capital Group Companies Ltd., Los Angeles,
U.S.A.

n.a.

3% – 5%1

n.a.

3% – 5%1

J. Safra Sarasin Investmentfonds AG, Basel,
Switzerland

34,550

3.0%

n.a.

<3%

1 Capital Group disclosed a 3.02% stake as of 31 August 2020, but did not report the exact number of LEM shares per 31 March 2023 and 31 March 2024

Shareholdings of
non-executive directors

Shareholdings of
Executive Management
31.3.2024
Number ofshares held

31.3.2023
Number ofshares held

31.3.2024
Number ofshares held

31.3.2023
Number ofshares held

Andreas Hürlimann

1,001

1,001

Frank Rehfeld, CEO

29

20

Andrea Borla, CFO

0François Gabella

600

0

600

Rodolphe Boschet, CHRO

0

Ilan Cohen

0

300

300

Verena Vescoli, CTO

0076,65075,500John McLuskie, SVP Asia

00

Ulrich Jakob Looser

350

350

Bastien Musy, SVP Europe & Americas

00Werner C. Weber00

Uwe Gerber, SVP Operations

0

0

78,90177,751

Total

29

20

Ueli Wampfler

Total

27

LEM Annual Report 23 | 24

Corporate governancereport

The notifications which have been sent to the Company and the disclosure office of SIX Swiss Exchange AG during the financial
year pursuant to Article 120 et seqq. of the Federal Act on Financial Market Infrastructures and Market Conduct in Securities
and Derivatives Trading may be viewed via the search function on https://www.ser-ag.com/en/resources/notifications-market-participants/significant-shareholders.html#/.
The trading of LEM shares by both Board of Directors and Executive Management has to respect LEM’s disclosure and insider
trading policy as well as all applicable rules and legislation.
Cross-shareholdings
LEM has no cross-shareholdings with other joint-stock companies.

2.
Capital structure and shares
The nominal value of the share capital of LEM HOLDING SA is CHF 570,000, which is divided into 1,140,000 fully paid-up registered shares with a par value of CHF 0.50 each. No changes in the capital have occurred during the last three financial years.
There are no shares with preferred voting rights. All shareholders are entitled to the same dividends. There are no restrictions
on the transfer of shares. In order to be registered in the share register, each shareholder shall declare that they hold the sharesfor their own account.
On 31 March 2024, LEM HOLDING SA held 1,058 treasury shares.
Capital range and conditional capital
There is neither capital range nor conditional capital, nor are there any profit-sharing certificates or participation in certificatesor any convertible bonds or options outstanding.

3.
The Board of Directors’ election, terms of office and cross-involvement
The Board of Directors is composed of at least three members who are individually elected at the Annual General Meeting fora mandate of one year, which is renewable up to an age limit of 70. It is possible to derogate from this rule in justified cases.
The Board of Directors constitutes itself, except for the Chairman of the Board of Directors and the members of the Compensation Committee who are elected by the Annual General Meeting of Shareholders.
At the Annual General Meeting on 29 June 2023, Andreas Hürlimann, François Gabella, Ilan Cohen, Ueli Wampfler, Ulrich J.
Looser and Werner C. Weber were re-elected as members of the Board of Directors. Andreas Hürlimann was re-elected as
Chairman of the Board of Directors. In addition, shareholders elected Andreas Hürlimann, Ulrich J. Looser and Werner C. Weberto the Nomination & Compensation Committee (NCC). Ulrich J. Looser chairs the Committee.
All members of the Board of Directors are non-executive. Only François Gabella had been part of the Executive Management of
LEM before his election as member of the Board of Directors. No member of the Board of Directors has any significant businessconnection with LEM Group.

LEM Annual Report 23 | 24

28

External mandates
Pursuant to Article 31 of the Articles of Incorporation, members of the Board of Directors may not hold more than ten additional mandates of which no more than four may be in listed companies. The following mandates are not subject to the above
limitations: (a) mandates in companies which are controlled by LEM or which control LEM; (b) up to five mandates held at therequest of LEM or companies controlled by it; and (c) up to six mandates in associations, charitable organizations, foundations,trusts and employee welfare foundations. Mandates shall mean mandates in the supreme governing body of a legal entity, whichis required to be registered in the commercial register or a corresponding foreign register. Up to 20 mandates in different legal
entities which are under joint control or same beneficial ownership are deemed one mandate.
Internal organizational structure
The Board of Directors meets as often as necessary, but six annual meetings are planned in advance. In the completed financial
year, six full-day meetings were held. The meetings usually take place at the Company’s registered office in Meyrin. The Chairman, after consulting with the CEO and the Chairmen of the committees, determines the agenda for the Board meetings. The
members of the Board of Directors can ask for additional items to be included on the agenda. They receive supporting documents beforehand, allowing for a comprehensive preparation of the meeting. The CEO and CFO attend the meetings of the Boardof Directors as non-voting guests. Depending on the topics, other members of Executive Management participate in the meetings in order to respond to specific questions. Decisions can be taken by the Board of Directors if at least half of the Directors
are present, and a simple majority of them is sufficient. In the event of tie, the Chairman has the casting vote. Minutes of themeetings including decisions taken are prepared by the CFO and distributed to the members of the Board of Directors, the CEO
and the CFO.
The Board of Directors reviews its working procedures, the efficiency and effectiveness of its teamwork as well as its interaction
with the management of the Company on a regular basis. Regular feedback sessions at the end of a meeting provide valuable
input for the continuous improvement of the Board’s coherence and leadership.
Definition of areas of responsibility
The Board of Directors delegates the management of the Company to the CEO to the extent permitted by the Swiss Code ofObligations. The Board of Directors reviews and assesses at least on an annual basis and makes decisions in the following areas:– review and approval of the strategy, business plan, annual business objectives and budget for the LEM Group;– approval of creation/closing of any subsidiary and purchase/sale of any interest in any company or entry into any merger or
joint venture agreement;– appointment/dismissal of the Executive Management;– monitoring the ethical and legal behavior of LEM;
– review of human resources management, including employee satisfaction and management development and legal, intellectual property, social and environmental aspects.

29

LEM Annual Report 23 | 24

The Board of Directors was composed of the following members as of 31 March 2024:

Position
Chairman of the Board of Directors,
Chairman of the Strategy Committee,
Member of the Nomination andCompensation Committee
Entry
2011

Andreas Hürlimann
Nationality Swiss
Born in 1964

Other notable activities– HMT Microelectronic AG, Biel/Bienne,
Chairman of the Board of Directors– Condis SA, Rossens, Member of the Board of Directors– Glatz AG, Frauenfeld, Vice-Chairman of theBoard of Directors

Professional background– Sustainable Real Estate Investments SICAV, Zurich,
Chairman of the Board of Directors– Since 2011, Entrepreneur– themissinglink ag, Cham, Member of the Board of Directors– 2005 – 2010, Managing Director,
Spencer Stuart, Zurich

Education– 1999 – 2005, Global Director of Industry
Practices and Member of the Executive
Board, Arthur D. Little Inc., Zurich,
Lisbon, London and Paris– M. Sc. Electrical Engineering, ETH Zurich, Switzerland– DAS Finance, University of Zurich, Switzerland– 1990 – 1999, international business development, sales and management roles
with Siemens Schweiz AG, ABB Power
Generation AG and Oerlikon Aerospace
Inc., Zurich, Baden, Montréal

Position
Member of the Board of Directors,
Member of the Strategy Committee
Entry
2018

– Sonceboz SA, Sonceboz, Member of theBoard of Directors– Sensirion AG, Stäfa, Member of the Board of Directors– ALPIQ Holding AG, Olten, Member of the Board of Directors– 2010 – 2018, CEO, LEM Group– Swissmem, Zurich, Vice President– 2006 – 2010, CEO, Tesa SA– Switzerland Global Enterprise, Zurich, Vice President of
the Advisory Board– 1996 – 2002, Business Area Manager,
ABB Power Transformers

Nationality Swiss
Born in 1958

– Natron Energy, USA, Chairman of the Board

Professional background– 2002 – 2006, SVP, Areva

François Gabella

Other notable activities– Economiesuisse, Zurich, Member of the Board– City Counsel of Buchillon, Switzerland, Member– Fondation des Maladies Hépatiques, Lausanne, Member
Education– M. Sc. Microtechnics EPFL, Lausanne, Switzerland– MBA IMD, Lausanne, Switzerland

Position
Member of the Board of Directors

Other notable activities

Entry
2010

– MOTX LTD, Israel, Member of the Board of Directors

Professional background– New Era Partner Capital, Israel and USA,
Member of the Advisory Board– Since 2019, Chairman and CEO of Caja
Robotics– Negba Houses for Children at Risk in Israel,
Honorary President– 2009 – 2019, President, Servotronix
Motion System Ltd.

Education– 2008 – 2009, General Manager, Kollmorgen Industrial & Commercial Engineered
Solutions Ltd. (Danaher Group)

Ilan Cohen
Nationality Israeli
Born in 1956

– 1997 – 2008, President and CEO,Kollmorgen Servotronix Ltd.
– 1987, Founder, Servotronix Ltd.
– 1983 – 1990, Associate Professor,
University of Tel Aviv, Israel

LEM Annual Report 23 | 24

30

– Caja Robotics, Israel, Chairman of the Board of Directors– Ph.D. Control System, Ecole Polytechnique de Bruxelles,
Belgium– MSEE, CALTECH Pasadena, USA– M.Sc. and BSEE Electro-mechanical engineer,
Ecole Polytechnique de Bruxelles, BelgiumPosition
Member of the Board of Directors,
Chairman of the Nomination andCompensation Committee,
Member of the Audit and Risk Committee
Entry
2015
Professional background

Ulrich J. Looser
Nationality Swiss
Born in 1957

– Since 2009, Berg Looser Rauber &Partner (BLR&Partners)– 2001 – 2009, Accenture, various
positions including Managing Director
Austria/Switzerland/Germany Management Consulting and Chairman Accenture
AG (Switzerland)– 1987 – 2001, McKinsey & Company,
industry, energy, pharma and public
sector practices, partner election 1993

Ueli Wampfler
Nationality Swiss
Born in 1950

– Bachofen Holding AG, Chairman of the Board of Directors– Fostag AG, Member of the Board of Directors– Geistlich Holding AG, Member of the Board of Directors– Fachhochschule Kanton Zurich,Member of the Fachhochschul Council– Economiesuisse, Member of the Board– University Hospital Balgrist,
Member of the Board of Directors– Swiss-American Chamber of Commerce
Education– M.Sc. Physics, ETH Zürich, Switzerland– M.A. HSG, University of St. Gallen, Switzerland

Other notable activities

Entry
2007

– Rebew AG, Zurich, Member of the Board of Directors– Jereca Holding AG (Traco Power Group), Baar,
Member of the Board of Directors

Professional background– Voltano AG, Baar, Owner and Chairman of theBoard of Directors– Since 2004, Founder and Senior Partner,
Wampfler & Partner AG, Zurich– Swisa Holding AG, Baar, Owner and Delegate of theBoard of Directors– 1998 – 2004, Director, STG Schweizerische Treuhandgesellschaft, Zurich

Education– 1974 – 1998, STG Coopers & Lybrand,
Zurich (Partner since 1991)– Certified auditor

Position
Member of the Board of Directors, Memberof the Strategy Committee,

Other notable activities

Entry
2017

Nationality Swiss
Born in 1960

– u-blox AG, Member of the Board of Directors

Position
Member of the Board of Directors,
Chairman of the Audit and Risk Committee

Member of the Nomination and Compensation Committee

Werner C. Weber

Other notable activities– Lic. oec., University of Zurich, Switzerland– WEMACO Invest AG, Zug, Member of the Board of Directors– Arosa Bergbahnen AG, Arosa, Member of theBoard of Directors– Schilthornbahn AG, Lauterbrunnen, Member of the Boardof Directors

Professional background– City Parkhaus Aktiengesellschaft, Zurich, Member of theBoard of Directors– Since 1998, weber schaub & partner ag,
Partner– MedioSearch AG, Bern / SkySmile AG, Zurich,Member of the Board of Directors– Prior thereto in particular Freddy Burger
Management Group in Zurich as LegalCounsel and General Secretary, andPricewaterhouseCoopers AG in Zurich as
Legal and Tax Counsel

Education– Dr. iur. University of Zurich, Switzerland– Admitted as an attorney-at-law in Zurich, Switzerland– Mediator SBA, Zurich, Switzerland

31

LEM Annual Report 23 | 24

Corporate governancereportInformation and control systems of the Board of Directors vis-à-vis Executive Management
The Board of Directors ensures that it receives sufficient information from the management to perform its supervisory duty andto make the necessary decisions.
The Board of Directors obtains the information required to perform its duties through several means:– the Board of Directors receives monthly and quarterly reports on the current development of the business;– informal meetings and teleconferences are held as required between the Chairman and the CEO as well as between the
Chairman and individual members of the Board of Directors;– the Committees meet at regular intervals and exchange detailed information with the Executive Management;– the Board of Directors receives detailed information to each agenda item one week before the Board meeting;– each Executive Manager joins at least one but usually multiple Board sessions in any given year.
Business risk management
In compliance with Swiss law, LEM is using a standardized procedure to analyze its business risks. LEM’s risk management
covers all types of risk: financial, operational and strategic – including the external business environment, compliance andreputational aspects.
The Executive Management conducts an annual risk analysis. The results and consecutive action plans are thereafter presented to and formally approved by the Board of Directors.
The risk management approach follows five steps: in a first step, potential hazards are evaluated and a consolidated list with 5
to 10 main hazards is set up. In a second step, each hazard is assessed by a product of probability and quantified impact. Step
two results in a risk map, which visualizes LEM’s potential risk environment. In step three, an action plan is put in place to mitigate the risks. The hazards thereafter are revalued a second time, taking into consideration the mitigation measures. In step
four, the action plan is validated and thereafter monitored on a bi-annual basis (step five).
Internal control system
In compliance with Swiss law, LEM has put in place an internal control system.
Starting from the material positions in the annual financial results, the important underlying processes and process owners havebeen identified. For each process, key risks that could lead to errors in the financial reporting have been identified. For eachkey risk, key controls have been defined and responsibilities assigned to assure effective compliance and documentation of
the key controls. The process has been presented to and approved by the Audit & Risk Committee.
Looking forward, the process owners will perform an annual process review whereby identified weaknesses shall be continuously improved and key risks and controls shall be updated. Based on the input of the process owners, the CFO prepares anannual report on the internal control system, which is presented to and discussed with the Audit & Risk Committee.

LEM Annual Report 23 | 2432

Committees
Three standing committees support the Board of Directors. They are composed of at least two non-executive members of theBoard of Directors. They meet whenever necessary but at least twice a year.
Corporate governance report– The primary objective of the Audit & Risk Committee (ARC) is to provide the Board of Directors with effective support
in financial matters, in particular the selection and supervision of the external auditor, assessment of the effectiveness,compliance and clarity of the Group financial reporting and the assessment and preparation of the financial reports to theshareholders. Furthermore, it reviews critical accounting policies, financial control mechanisms and compliance with corresponding laws and regulations as well as the development and continuous improvement of the internal control system. If
required, the external Group auditors are invited to participate in the meeting. The ARC prepares proposals to be decided
by the Board of Directors. In the completed financial year, three half-day meetings were held.
– The Nomination & Compensation Committee (NCC) deals with succession, recruitment and compensation of the membersof the Board of Directors and the Executive Management. It ensures and monitors the personnel development plan and adequate succession planning for middle and top management. It supports the Board of Directors in establishing and reviewing the compensation strategy and guidelines and the performance objectives as well as in preparing the proposals to besubmitted to the General Meeting regarding the compensation of the Board of Directors and of the Executive Management.
It reviews and updates the compensation policy for the members of the Board of Directors and the Executive Management
and the performance-based compensation system for the Executive Management. The NCC prepares proposals to be
decided by the Board of Directors. In the completed financial year, four half-day meetings were held.
– The primary objective of the Strategy Committee (SC) is to assist the Board of Directors in fulfilling its duties with respect
to determining the Company’s strategy and the appropriate means to pursue it, including LEM’s organizational setup. As
strategic work and its successful implementation is based upon coordinated and interlocking activities between Executive
Management and the Board of Directors, the SC ensures close collaboration with the CEO and the Executive Management.
The SC prepares proposals to be decided by the Board of Directors. The Board of Directors may also decide to delegate
members of the SC to assist in steering longer-term strategic initiatives by joining the project steering committee. In thecompleted financial year, seven video/phone conferences were held.

33

LEM Annual Report 23 | 24

Corporate governancereport4.
Executive Management
The Executive Management was composed of the following members as of 31 March 2024:

Frank Rehfeld
Nationality German
Born in 1968
Function CEO
With LEM since 2016

Andrea Borla
Nationality Swiss
Born in 1967
Function CFOWith LEM since 2015

Rodolphe Boschet
Nationality French
Born in 1967
Function CHRO
With LEM since 2020

Verena Vescoli
Nationality Italian
Born in 1970
Function CTO
With LEM since 2022

John McLuskie
Nationality British
Born in 1970
Function Senior Vice
President Asia
With LEM since 2023

LEM Annual Report 23 | 24

34

Previous companies and positions
2016 – 2018, SVP Industry, LEM Group2009 – 2015, VP Drives, Brose China Co., Ltd.
2006 – 2009, Managing Director, Hella Shanghai Electronics Co., Ltd.
2004 – 2006, Siemens VDO China, Director Body/Chassis Electronics
1996 – 2004, Siemens VDO Germany, Director R&D Body/Chassis Electronics
Education
Dipl. Eng. Electrical Engineering, Erlangen-Nuremberg, Germany
Previous companies and positions
2008 – 2015, CFO, Schindler France
2003 – 2007, Field Operations Manager, Schindler China
1999 – 2003, Area Controller, Schindler Asia Pacific1996 – 1999, Head of Group Consolidation, SAirGroup
Education
Ph.D., M.A. HSG, Finance and Accounting, St. Gallen, Switzerland
Previous companies and positions
2019 – 2020, VP HR integration, Danaher
2016 – 2019, Senior Vice President HR & Communications, Beckman Coulter2013 – 2016, Global Vice President HR & Communications, Radiometer2006 – 2013, Head of HR France, Europe, Chemistry Business Unit, Beckman Coulter
2002 – 2006, HR Manager Europe, Datascope Corp
1997 – 2002, International HR Manager, Cartier
Education
Masters of Political Science, Paris Sorbonne, France
Masters in International Human Resources Management, ENS Cachan, France
Previous companies and positions
2016 – 2022, Senior Vice President R&D, ams OSRAM AG, Austria
2015 – 2016, Senior Manager Device & Systems R&D, ams AG, Austria
2012 – 2015, Department Manager R&D Particle and Soot Management Systems, AVL List GmbH, Austria
2009 – 2012, Product Manager Particle and Soot Management Systems, AVL List GmbH, Austria
2000 – 2009, Senior Engineer TCAD and Device Development, ams AG, Austria
Education
Ph.D. in Solid State Physics, ETH Zurich
Master of Science in Physics, Université de Franche-Comté of Besançon/France
Bachelor of Science in Physics, Karl Franzens University and Technical University of Graz/Austria
Previous companies and positions
2018 – 2022, President, GKN Automotive China
2014 – 2018, Deputy General Manager Shanghai GKN HUAYU Automotive Systems
2007 – 2013, Business Development Director, GKN Driveline Torque Technology
2005 – 2007, Commercial Director Japan and Korea, GKN Driveline Torque Technology
2003 – 2004, Global Commercial Director, Propshaft Product Group, GKN Driveline
2001 – 2003, Global Account Manager, GKN Driveline
1999 – 2000, Manager – Japanese Development Projects, GKN Driveline
1996 – 1998, Business Development Manager, GKN Invel Transmissions Ltd
Education
BEng in Electrical and Electronic Engineering, University of Leeds, UKBastien Musy
Nationality French
Born in 1978
Function Senior Vice
President Europe &AmericasWith LEM since 2018

Uwe Gerber
Nationality German
Born in 1965
Function Senior Vice
President Operations
With LEM since 2023

Previous companies and positions
2019 – 2022, VP Global Product Management, LEM Group2018 – 2019, Special Projects Manager, LEM Group
2016 – 2018, Global Pricing & Commercial Analytics Lead, Syngenta
2015 – 2016, Investor Relations Manager, Syngenta
2012 – 2015, Head Finance Production & Supply Asia Pacific, Syngenta
2009 – 2012, Controller Seeds Division, Syngenta
2005 – 2009, Risk and Financial Planning Manager, Ciba Specialty Chemicals
2001 – 2005, Internal Auditor, Credit Mutuel – CIC
Education
MSc in Management, University Lyon III, France
Previous companies and positions
2020 – 2022, Managing Director & COO, Bode – Die Tür2018 – 2020, Managing Director & COO, Thermamax
2016 – 2018, VP Global Operations (Industry), Behr (MAHLE)
2012 – 2016, VP Operations North America, Behr (MAHLE)
2008 – 2011, Plant Manager, Behr2004 – 2008, Head of Prototype Shop, Behr1999 – 2004, Program Manager, Behr
Education
Industrial Engineering, University – FH Esslingen, Germany

Verena Vescoli is member of the Board of Directors of Sonion, Denmark, OSRAM GmbH and of OSRAM Licht AG, Germany. Apartfrom Ms. Vescoli, none of the members of the Executive Management have other activities in governing or supervisory bodies,
any official functions or political posts nor any permanent management functions for important Swiss and foreign interest
groups.
External mandates
Pursuant to Article 31 of the Articles of Incorporation, and subject to approval by the Board of Directors, members of the Executive Management may not hold more than three additional mandates of which no more than one may be in listed companies.
The following mandates are not subject to the above limitations: (a) mandates in companies which are controlled by LEM or
which control LEM; (b) up to five mandates held at the request of LEM or companies controlled by it; and (c), subject to approval by the Board of Directors, up to three mandates in associations, charitable organizations, foundations, trusts and employee welfare foundations. Mandates shall mean mandates in the supreme governing body of a legal entity, which is required
to be registered in the commercial register or a corresponding foreign register. Up to 20 mandates in different legal entities
which are under joint control or same beneficial ownership are deemed one mandate.
Management contracts
There are no management contracts with companies or individuals outside LEM Group.

35

LEM Annual Report 23 | 24

Corporate governancereport5.
Compensation
Please refer to the compensation report.

6.
Shareholders’ participation rights
The rules on shareholders’ participation rights are outlined in the Articles of Incorporation. The rules for the convening of General Meetings, the participation rights and the majority rules for decisions all follow Swiss law. The complete Articles of Incorporation can be downloaded from the Investor Relations pages on the website www.lem.com/en/file/12164/download.
Voting rights and representation restrictions and entry in the share register
There are no limitations on voting rights for shareholders who are entered into the shareholders’ register with voting rights.
Anyone purchasing registered shares is registered by the Board of Directors in the share register on request as a shareholder
with voting rights, provided they expressly declare that the shares are held for their own account. Each shareholder may be
represented by the independent representative or by a third party who need not be a shareholder of LEM HOLDING SA.
Statutory quorums
The Articles of Incorporation contain no deviation from the applicable law. In case a second vote is necessary for elections, arelative instead of the absolute majority of the votes represented is required.
Convocation of the General Meeting of the Shareholders and inclusion of items on the agenda
Registered shareholders are convened to General Meetings by ordinary mail and by publication in the Swiss Official Gazette ofCommerce at least 20 calendar days prior to the day of the meeting.
According to Article 12 of the Articles of Incorporation, one or several shareholders who collectively hold 10% of the sharecapital can call for a shareholders’ meeting; shareholders representing shares with a total nominal value of CHF 1 m or 1% of theshare capital may request that an item be placed on the agenda.
Entries in the share register
Voting rights may be exercised by shareholders who are registered in the share register on the record date indicated in theinvitation to shareholders’ meeting.
Dividend policy
LEM targets a payout ratio significantly above 50% of the consolidated net profit for the year, to be proposed by the Board of
Directors to the Annual General Meeting.

7.
Change of control and defensive measures Opting-out clause
Any shareholder is released from the obligation to submit a public takeover offer to all shareholders if their participation in LEM
exceeds 33 1/3% of the voting rights.
Clauses on changes of control
There is no particular clause in the Articles of Incorporation for changes of control. No member of the Executive Management
will receive additional severance payments if dismissed in the case of a change of control of the Company.

7a. Transparency on non-financial matters
Please refer to the report on non-finanicial matters in the sustainability report.

LEM Annual Report 23 | 24

36

8.
Auditors
The duration of the auditors’ mandate is one year. Ernst & Young has been auditing LEM since the financial year 2005/06, with
Daniel Zaugg bearing the responsibility for the audit since 2021/22. As required by law, the auditor-in-charge is changed every
seven years. Ernst & Young audits the Group’s consolidated financial statements as well as all of LEM’s Group companies in
Switzerland and abroad that are subject to a statutory audit requirement. The audit fees and fees for additional services are as
follows:
Type of service
2023/242022/23

Audit fees

533

595

Additional audit-related fees

41

Total

574

In CHF thousands

595

The Audit Committee evaluates and controls the performance (focus on areas that involve significant risk to LEM, ability toprovide effective and practical recommendations, open and effective communication and coordination), fees, and independence of the auditors each year. It discusses and reviews the scope of the audits, and the resulting feedback. Based on thisinformation, it determines which changes and improvements are necessary. The auditor’s report on the results of their audits
both orally and in writing. Financial statements as well as management letters are discussed in the ARC in the presence of theexternal auditors. During 2023/24 Ernst & Young attended two regular ARC meetings.

9.
Information policy
LEM informs its shareholders about the business status and its results on a quarterly basis in the form of press releases. These,
together with the Annual Review and Financial Report, are made publicly available on its website (www.lem.com/en/investors)
and may be obtained in printed form from the Company’s headquarters. Once a year, LEM holds a presentation for the media,
investors and financial analysts. Internal processes assure that price-sensitive facts are published without delay in accordancewith the ad hoc publicity rules of the SIX Swiss Exchange. At www.lem.com, detailed information is available, e.g., the Articles
of Incorporation, interim and annual reports, investor presentations, press releases as well as the financial calendar.

10. Trading restriction periods
LEM HOLDING SA has adopted a disclosure and insider trading policy with the objective to prevent insider trading by LEM
HOLDING SA, its affiliates, their directors, officers and employees. LEM applies trading restriction periods (blackout periods)
from the internal disclosure of the quarterly, semi-annual and annual financial results to the Board of Directors (at 7am on the
1st of the month following the closing of the relevant financial period) until 24 hours after the public release of such financial
results.
LEM HOLDING SA, its affiliates and all persons who have regular access to potentially price-sensitive information, including all
members of the Board of Directors and the Executive Management, as well as their staff and LEM employees worldwide (insiders) are bound by the blackout periods. Any Insider is prohibited from engaging in any transactions in LEM securities during theblackout periods. The blackout periods are without prejudice to the obligation of the Insiders to refrain from dealing in LEM
securities at any other times when in possession of price sensitive facts relating to LEM.
Contact for investors and media: Andrea Borla, CFO, Route du Nant-d’Avril 152, CH–1217 Meyrin, or send an e-mail toinvestor@lem.com (phone: +41 22 706 12 50).

37

LEM Annual Report 23 | 24

Compensation
reportLEM Annual Report 23 | 24

38

The future of LEM depends on our ability to attract, develop and retain talented people.
Among the many measures we use to achieve this goal are competitive compensation policies.
Our compensation policies are designed to align the interests of the Executive Management
and the Board of Directors with the interests of shareholders.
In brief
Core principles
LEM’s compensation policies are designed to reward results and performance as well as to create long-term value for shareholders. The compensation policies are reviewed on an annual basis.
LEM’s Articles of Incorporation (www.lem.com/en/Investors > Corporate Governance) contain provisions regarding the approval of compensation of the Board of Directors (BoD) and the Executive Management (Article 27), the supplementary amount for
new members of the Executive Management (Article 28), the general compensation principles (Article 29) as well as provisions
regarding the agreements with members of the Board of Directors and the Executive Management (Article 30).
This compensation report is based on section 5 of the annex to the Corporate Governance Directive issued by SIX Exchange
Regulation AG and Articles 13 to 17 of the Ordinance Against Excessive Compensation in Listed Stock Companies (OaEC).
Compensation of the Board of Directors
The compensation of the Board of Directors consists exclusively of a fixed fee paid in cash. There is no variable compensation.
The compensation of the Chairman and the members of the Board of Directors depends on the responsibility of each member
and the related work, such as serving on committees of the Board of Directors.
Compensation of the Executive Management
To encourage and reward results that contribute to the sustainable success of LEM, the total compensation of the Executive
Management consists of three elements: base salary, variable compensation, and non-wage compensation. The target-setting
process for the variable compensation is carried out on an annual basis and includes quantitative and qualitative performance
criteria, including LEM’s financial results.
Members of the Executive Management are entitled to attend the meetings of the Board of Directors relevant to their function
but are excluded from any deliberation and decision on their compensation.
The compensation authorities are summarized in the following table:
Beneficiary

Compensation element

ProposalApproval

Board of Directors (BoD) and
Executive Management

Compensation principles

Nomination and Compensation
Committee (NCC)

BoD within limits of Articles
of Incorporation

BoD

Aggregate maximum amount
fixed compensation

BoD based on NCC proposal

Annual General Meeting(prospective approval)

BoD

Individual compensation

NCC

BoD

Executive Management

Aggregate maximum amount
fixed annual base salary

BoD based on NCC
proposalAnnual General Meeting(prospective approval)

Executive Management

Aggregate amount short-term
incentive

BoD based on NCC
proposalAnnual General Meeting(retrospective approval)

Executive Management

Aggregate maximum amountlong-term incentive

BoD based on NCC
proposalAnnual General Meeting(prospective approval)

Executive Management

Individual compensation

NCC based on proposal from
CEO

BoD

CEO

Individual compensation

Chairman of the BoD

BoD

39

LEM Annual Report 23 | 24

Compensation report1.
Board of Directors
1.1
General principles of compensation for members of the Board of Directors
The aggregate maximum compensation of the Board of Directors is approved by the Annual General Meeting upon proposal by
the Board of Directors based upon recommendation from the Nomination & Compensation Committee. The remuneration of theBoard of Directors consists of a fixed cash payment and is reviewed on an annual basis. The remuneration compensates for the
personal responsibility and exposure as member of the Board of Directors and the work related to the Board of Directors’ membership. There is neither a variable compensation nor any participation in an equity-based compensation plan.
1.2 Compensation for members of the Board of Directors
The Board of Directors adopted a remuneration scheme with a fixed membership fee payable in cash of gross CHF 280,000 for
the Chairman and gross CHF 100,000 for each member of the Board of Directors. Activities in committees of the Board of Directors is compensated by membership fees of gross CHF 40,000 for the Committee’s Chairman and gross CHF 20,000 foreach member.
The tables below show the compensation per member of the Board of Directors in the financial years 2022/23 and 2023/24
for their respective term of office. At the Annual General Meeting held on 29 June 2023, the shareholders approved a maximum
compensation amount for the term of office from the Annual General Meeting 2023 until the Annual General Meeting 2024 of
CHF 1,400,000. The actual costs for the Company are CHF 1,098,000.

2023/24
In CHF thousands

Annual fees (A)Taxes, social security
charges and similar
contributions (B)Total (A) + (B)Andreas Hürlimann 1, 5, 6

340

28

368

Ueli Wampfler 2

140

10

150

Ulrich Jakob Looser 3, 4

160

11

171

Ilan Cohen a

120

8

128

Werner C. Weber 5, 7

140

13

153

François Gabella 7
Total

120

8

128

1,020

78

1,098

Annual fees (A)Taxes, social security
charges and similar
contributions (B)Total (A) + (B)2022/23
In CHF thousands
1, 5, 6

310

26

336

Ueli Wampfler 2

120

10

130

Ulrich Jakob Looser 3, 4

140

10

150

Ilan Cohen a

100

7

107

Werner C. Weber 7

100

9

109

François Gabella 7

100

8

108

Total

870

70

940

Andreas Hürlimann

1 Chairman of the Board of Directors

5 Member of the Nomination & Compensation Committee

2 Chairman of the Audit & Risk Committee

6 Chairman of the Strategy Committee

3 Member of the Audit & Risk Committee

7 Member of the Strategy Committee

4 Chairman of the Nomination & Compensation Committee

a including the amount of CHF 20,000 for R&D contribution

LEM Annual Report 23 | 24

40

2.
Executive Management
2.1 General principles of compensation for members of Executive Management
The aggregate maximum compensation of the Executive Management is approved by the shareholders at the Annual General
Meeting upon proposal by the Board of Directors. The proposals of the Board of Directors are based on NCC recommendation.
The compensation of the Executive Management is reviewed by the Board of Directors on an annual basis.
The total compensation of the Executive Management is composed of the following elements:
Compensation
element

Instrument

PurposeDrivers

Range and cap

Shareholder approvalBase salaryMonthly cash
payments

Pay for the function

Scope and responsibilities, profile andcompetencies

N/A

Prospective maximum
amount (October –September)

Short-term incentive

Annual cash
payment

Pay for annual
performance

Business and individual performance throug
hout the financial year

0% – 139% oftarget amount

Retrospective

Former long-term
incentive until
21/22

Annual cash
payment

Participation insustainable company
success, alignment
with shareholderinterests

Achieved value
creation over threeconsecutive financial
years

0% – 200% of
target amount

Prospective maximum
amount for payout
three years later

New long-term
incentive starting
22/23

SharesParticipation insustainable company
success, alignment
with shareholderinterests

Achieved value
creation and absoluteand relative shareholder return overthree consecutive
financial years

0% – 200% of
target amountMaximum compensation assuming all
performance targets
will be reached at
maximum possiblelevel, not considering
future share pricedevelopment

Non-wagecompensation

Pensioncontributions

Protect against risks
plus retirementand dependents’
coverage

Local legislation andmarket practice

N/A

The total compensation is in line with the market for comparable industrial companies considering the various remunerationlevels for different functions and locations. Furthermore, the compensation mix between base salary, variable compensationand non-wage compensation reflects sectorial and functional market practice. The full Board of Directors periodically reviews,
sets, and approves the compensation system, based on the recommendation of the NCC. The latest external benchmark was
performed early 2022 with the support of Mercer. The Mercer IPE (International Position Evaluation) has been used to define
the peer group, which allows comparability between companies based on revenues, number of employees and business value
chain.

41

LEM Annual Report 23 | 24

Compensation report

2.1.1 Base salary of Executive Management
Base salaries are paid monthly as fixed cash amounts.
2.1.2 Variable compensation of Executive Management
The target-setting process for the Leadership-for-Results (L4R) plan is part of the LEM performance management and is carriedout on an annual basis by the NCC. Variable compensation is partly paid in cash (the short-term incentive) and partly delivered
in LEM shares (the long-term incentive) and after approval by the shareholders. The Chairman of the Board of Directors (for theCEO) and the NCC (for the other members of the Executive Management) prepare objectives and performance evaluations
based on personal performance review.
Short-term incentive (STI) related to the Executive’s function, responsibility and obtained results
Each Executive’s individual target amount for the short-term incentive plan is communicated to the Executive at the beginningof the financial year together with the objectives and their weighting. The target amount and the objectives are based on therole and impact of the Executive as well as annual Company priorities. Objectives are linked to audited financial indicators suchas EBIT and net profit, other quantitative indicators as well as qualitative targets based on strategic initiatives. At the end of thefinancial year, the performance on each objective is evaluated resulting in the total amount to be paid.
The number of objectives is large enough to allow each Executive to reach a fair level of short-term variable compensation rewarding for the results achieved even under changed business conditions. Since the degree of achievement of set objectives
has to be evaluated at the end of the period, a clear understanding of the metrics to be applied is established at the time oftarget setting and kept constant over the period. For each objective, the curve between minimum and maximum bonus level isdefined. Ambitious but achievable objectives are set as targets, at which 100% of the respective target amount is attributed.
For the Executive Management, the minimum payout of the short-term incentive is 0% of the target amount and the weighted
maximum payout is 139%. The target amount of the short-term incentive represents between 18% and 24% of the total target
compensation.
The short-term incentive payout is presented for retrospective approval to the shareholders along with the Annual Report andthe financial statements of the same financial year at the Annual General Meeting 2024 prior to being paid out.
Long-term incentive (LTI) related to the sustainable financial performance of LEM Group
During the financial year 2021/22, the long-term incentive was replaced by a share-based Performance Share Unit (PSU) plan.
The goal is to further focus participants on various dimensions of LEM’s financial performance, especially long-term growth andvalue creation, thereby tightening the alignment of interest with our shareholders.
Starting with financial year 2022/23, participants are granted an individual LTI amount in CHF at the beginning of each three- year
plan cycle, which corresponds to the grant date. This amount is converted into PSUs based on a reference price (10-day average share price prior to grant date). At the end of the plan cycle, PSUs vest in LEM shares, whereas the number of shares obtained can vary between 0 and 2, depending on the achievement of pre-defined performance and service conditions.

LEM Annual Report 23 | 24

42

The performance conditions are:
– Economic Value Added (EVA): to account for an internal view on value creation (weighted 60%)
– Absolute TSR: to link the overall compensation directly to the absolute value created by LEM for its shareholders (weighted
20%)– Relative TSR (LEM’s TSR compared to the TSR of the SPI EXTRA): to strengthen the appreciation of a participant’s contribution to the Company’s success based on LEM’s performance compared to the market (weighted 20%)
Under these conditions performance is measured over three consecutive financial years starting with the year during which the
grant date occurs and therefore the plan cycle starts. The Board of Directors defines the targets for all three performance criteria, including minimum, expected and maximum levels, at the beginning of year one of the plan cycle following a stringent
target setting process. In financial year 2023/24 the target for the grant are as follows:

Minimum level(leading to a vesting of 0%)

Expected level(leading to a vesting of 100%)

Maximum level(leading to a vesting of 200%)

EVA

69% of expected performance

100% of expected performance

131% of expected performance

Absolute TSR

0.0%

7.0%

14.0%

Relative TSR–10 pp.

0 pp.

10 pp.

Because absolute target amounts for the EVA performance condition are considered strategic and sensitive business information, targets are provided on a relative basis. To set those targets, investors, return expectations on market value, performanceprojections and current profitability levels were considered to establish an appropriate link between LTI payouts, and the value
created for investors. Once the targets are defined, they remain unchanged over the three-year period. The evaluation of theperformance takes place at the end of year three. The LEM shares for the purposes of this PSU plan will be acquired in themarket. It will not dilute existing shareholders’ interests in the Company.
Overall, the minimum number of shares delivered under the long-term incentive corresponds to 0% of the granted PSUs andthe maximum is 200% of granted PSUs. The target amount, the individual LTI amount, of the long-term incentive represents
35% of the total target compensation of the CEO and between 14% and 27% of the total target compensation for other members of the Executive Management.
Forfeiture rules apply in case a participant is no longer an employee of LEM at the moment where PSUs vest.
The PSU related to the period 23/24 to 25/26 LTI plan were allocated as follows:
Numbers of PSUs

Value at reference price
In CHF thousands

Frank Rehfeld, CEO

210

450

Executive Management (excl. CEO)

368

785

Total

578

1,235

Former compensation plans: Long-term incentive related to the sustainable financial performance of LEM Group
Until (and including) financial year 2021/22, the former long-term incentive plan was defined as an annual cash target amountand was based on the performance of LEM evaluated over a period of three consecutive financial years. The performance
criterion was the cumulated Economic Value Added (EVA) over these three financial years.
For the Executive Management, the minimum payout of the long-term incentive was 0% of the target amount and the maximum
payout was 200%.

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LEM Annual Report 23 | 24

Compensation report

For the long-term incentive cycle 2021/22 to 2023/24, the maximum amount approved prospectively by the shareholders at
the Annual General Meeting in 2021 was CHF 1,870,000 for payout in 2024 in cash.
No further awards will be made under this plan.
2.1.3 Non-wage compensation of the Executive Management
For the Executive Management, non-wage compensation consists of pension plans (retirement benefits) only.
The Executive Management benefits from LEM’s Swiss pension plan, considered a defined contribution plan under Swiss lawthat provides retirement benefits and risk insurance for death and disability. IFRS, on the contrary, considers this plan as a defined benefits plan. The insured base salary follows Swiss professional pension regulations without limitation of the amount.
The pension fund is funded by contributions from the Company and the respective insured executive.
2.2

Remuneration of Executive Management

2023/24

Base salary

In CHF thousands

Frank Rehfeld, CEO

Short-term
incentive

Long-term
incentive

Company’scontribution
to pension
fund

Other
benefits3

Total

Company’scontribution tosocial security
compensation

525

183

328

61

1,097

110

Executive Management(excl. CEO)1

2,162

581

390

204

150

3,487

349

Total

2,687

764

718

265

150

4,584

459

From 2016 to 2023, the Company erroneously deducted the employer contribution of the Executive Committee members 1e
pension from the Executive Committee members variable compensation payout. The aggregate amount of CHF 886,459 was
reimbursed to the members of the Executive Committee in March 2024.

2022/23
Base salary

In CHF thousands

Frank Rehfeld, CEO

Short-term
incentive

Long-term
incentive

Company’scontribution
to pension
fund

Other
benefits3

Total

Company’scontribution tosocial security
compensation

512

363

420

54

1,349

135

Executive Management(excl. CEO)2

1,490

705

655

149

26

3,025

303

Total

2,002

1,068

1,075

203

26

4,374

438

1 Including leaver former SVP Europe/Americas for short-term incentive
2 Including joiners CTO (pro-rated five months), SVP Asia (pro-rated three months), New SVP Operations (pro-rated two months),
new SVP Europe/Americas (pro-rated three months), and leaver former SVP Operations (pro-rated six months)
3 Other benefits: international benefits (e.g. company car, housing)LEM Annual Report 23 | 24

44

The amounts are shown as follows:– Base salary: CHF 2,687,000 as paid out in the reporting period.
– Short-term incentive 2023/24: CHF 763,748 as proposed to the Annual General Meeting on 27 June 2024 for payout in July2024.
– Long-term incentive: CHF 718,000 as accrued for long-term incentive 2021/24 for payout in July 2024.
– Pension fund contributions: CHF 265,000 as accrued for or paid during the reporting period.
– Company’s contributions to social security charges: CHF 459,000 as accrued for or paid during the reporting period.
Amounts approved by previous Annual General Meetings related to the period reported above:– Maximum amount base salary (for the period from 1 October 2022 to 30 September 2023): CHF 3,348,000– Maximum amount base salary (for the period from 1 October 2023 to 30 September 2024): CHF 3,937,000– Short-term incentive amount for 2022/23 for payment in 2023: CHF 1,175,255– Maximum amount long-term incentive 2021/22 to 2023/24 for payment in 2024: CHF 1,870,000– Pension fund contribution and Company contribution to social security charges as paid out or accrued for in the reporting
period are included in the above amounts.
The overall variable remuneration paid out for 2023/24 to the Executive Management ranged from 16% (for recent new joiners)
to 49% of the total compensation.
2.3 Shareholding requirements
Starting with financial year 2022/23, each member of the Executive Management is required to build up an investment in LEM
shares worth the equivalent of 150% of the annual base salary for the CEO, 140% for the CFO, and 80% for other members of
the Executive Management.
Members of the Executive Management will have a five-year period to achieve the above shareholding targets. In case ofnon-compliance, restrictions on the sale of owned shares and post-vesting holding requirements for shares vesting in the near
future under the new share based PSU plan will apply. All vested shares directly or indirectly owned by a member of the Executive Management and related parties, as well as granted but yet unvested PSUs under the LEM’s long-term incentive, will betaken into account when assessing whether or not the shareholding requirements are met.

3.
Loans to current and former members of the Board of Directors and Executive Management and related parties
Our Articles of Incorporation do not provide the basis to grant loans to current or former members of the Board of Directors, theExecutive Management or to any related party. Therefore, no loans have been granted in the financial years 2022/23 and2023/24 or in any previous year.

45

LEM Annual Report 23 | 24

Auditor’s report

Report of the statutory auditor on the audit of the compensation report
OpinionWe have audited the compensation report of LEM Holding SA (the Company) for the year ended 31 March 2024. The audit waslimited to the information pursuant to Art. 734a-734f of the Swiss Code of Obligations (CO) in the tables marked “audited” onpages 38 to 45 of the compensation report.
In our opinion, the information pursuant to Art. 734a-734f CO in the compensation report complies with Swiss law and the Company’s articles of incorporation.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities underthose provisions and standards are further described in the “Auditor’s responsibilities for the audit of the compensation report”
section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirementsof the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in theannual report, but does not include the tables marked ”audited” in the compensation report, the consolidated financial statements, the stand-alone financial statements and our auditor’s reports thereon.
Our opinion on the compensation report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the compensation report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the audited financial information in the compensation
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Board of Directors’ responsibilities for the compensation report
The Board of Directors is responsible for the preparation of a compensation report in accordance with the provisions of Swisslaw and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary
to enable the preparation of a compensation report that is free from material misstatement, whether due to fraud or error. It isalso responsible for designing the compensation system and defining individual compensation packages.

LEM Annual Report 23 | 24

46

Auditor’s report

Auditor’s responsibilities for the audit of the compensation report
Our objectives are to obtain reasonable assurance about whether the information pursuant to Art. 734a-734f CO is free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of this compensation report.
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:– Identify and assess the risks of material misstatement in the compensation report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.
– Obtain an understanding of internal control relevant to the audit 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 Company’s internal
control.
– Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

Geneva, 23 May 2024
Ernst & Young Ltd
				Daniel Zaugg				Didier Lequin
Licensed audit expert			
Licensed audit expert(Auditor in charge)

47

LEM Annual Report 23 | 24

Financial Reportof LEM GroupLEM Annual Report 23 | 24

48

Consolidated statement offinancial position

AssetsIn CHF thousands

Notes

31.3.2024

31.3.2023

Current assets
Cash and cash equivalents

23,71021,775

Accounts receivable

5

76,12586,458Inventories

656,361

56,831

10,457

3,896

Income tax receivable
Other current assets

7

Total current assets

5,099

4,678

171,751

173,638

Non-current assets
Property, plant and equipment

8

85,08573,580

Right-of-use assets

925,89725,266

Intangible assets

10

9,026

5,987

Deferred tax assets

21

49,53648,369Other non-current assets

11

3,029

664

Total non-current assets

172,574

153,866

Total assets

344,325

327,504

31.3.2024

31.3.2023

Liabilities and equity
In CHF thousands

Notes

Current liabilities
Accounts payable

12

Accrued expenses

28,352

36,071

31,95232,296

Lease liabilities

9

2,796

3,103

Income tax payable

21

5,229

2,199

Current provisions

13

856

601

57,27538,414

Interest-bearing loans and borrowings
Other current liabilities

14

Total current liabilities

2,392

2,228

128,852

114,912

Non-current liabilities
Non-current lease liabilities

926,03526,930Non-current provisions

13

303

1,020

Deferred tax liabilities

21

2,347

2,934

9,550

5,175

Interest-bearing loans and borrowings
Other non-current liabilities

561

2,899

Total non-current liabilities

14

38,796

38,959Total liabilities

167,648

153,871

EquityShare capital

15

570

570

Treasury shares

15(1,988)(1,069)Reserves

15(1,176)

2,949

Retained earnings

179,272

171,184

Total equity

176,677

173,633

Total liabilities and equity

344,325

327,504

49

LEM Annual Report 23 | 24

Consolidated
income statement

April to March

Notes

In CHF thousands

Sales

2023/242022/23

405,777

406,350(216,614)(214,156)

Gross profit

189,163

192,194

Sales expenses(29,513)(29,124)

Administration expenses(44,881)(38,950)

Research & development expenses(33,866)(32,174)

Cost of goods sold

Other income
Operating profit

153

234

81,05892,180(1,719)Financial expenses

18(3,181)

Financial income

19

422

392

Foreign currency exchange effect20(3,326)(1,928)74,972

88,925(9,645)(13,585)

65,32775,340

57.35

66.12

57.26

66.07

Profit before tax
Income taxes

21

Net profit
Earnings per share, in CHF

Basic earnings per share
Diluted earnings per share

LEM Annual Report 23 | 24

50

22

Consolidated statement ofcomprehensive income

April to March
In CHF thousands

Notes

Net profit for the period recognized in the income statement

2023/242022/23

65,32775,340(5,045)(6,843)

Other comprehensive income to be reclassified to profit and loss
in subsequent periods
Currency translation difference
Income tax
Total other comprehensive income to be reclassified to profit and loss
in subsequent periods

465

726

(4,579)(6,117)(172)

Other comprehensive income not to be reclassified to profit and loss
in subsequent periods
Remeasurement gains /(losses) on defined benefit plans

24

2,087

Income tax

21

(293)

32

Total other comprehensive income not to be reclassified to profit and loss
in subsequent periods

1,794

(140)

Other comprehensive income /(loss) for the period, net of tax(2,785)(6,257)

Total comprehensive income for the period

62,542

69,08351

LEM Annual Report 23 | 24

Consolidated statement ofchanges in equity

Attributable to shareholders
In CHF thousands

Notes

Share
capitalTreasurysharesCapitalreserve

Translation
reserve

Retainedearnings

Total
equity1 April 2022

570

(977)

12,920(3,219)151,904

161,197

Net profit for the year
Other comprehensive income/(loss)
Total comprehensive income

75,34075,340(6,843)586(6,257)(6,843)75,92669,083

Share-based payments

17

514

514

Dividends paid

15

(56,958)(56,958)

Movement in treasury shares

15

(92)

92

(202)

(202)

31 March 2023

570

(1,069)13,011(10,062)

171,185

173,633

1 April 2023

570

(1,069)13,011(10,062)

171,185

173,633

Net profit for the year
Other comprehensive income/(loss)
Total comprehensive income

65,32765,327(5,045)2,259(2,785)(5,045)67,58662,542

Share-based payments

17

768

768

Dividends paid

15(59,252)(59,252)

Movement in treasury shares

15

31 March 2024

570

(920)

920

(1,988)13,931(15,107)(1,015)(1,015)

179,272

176,677

The amount available for dividend distribution is based on LEM HOLDING SA’s shareholders’ equity determined in accordancewith the legal provisions of the Swiss Code of Obligations.

LEM Annual Report 23 | 2452

Consolidated cash flow
statement

April to March2023/242022/23

Profit before tax

74,972

88,925Adjustment for non-cash items and taxes paid

5,597

9,020

2,536

1,257
(18)

In CHF thousands

Notes

Cash flow from operating activities

Net financial result
Derivative financial instruments revaluation

932

Share-based payment expense

800

516

Depreciation and amortization

15,75014,592(751)

442

Impairment loss
Gain / Loss on disposal of fixed assets

244

75

Increase (+) / decrease (–) of provisions and allowances

1,966

1,596

Movement in pension

2,039

(244)

Interest received

387

284

Interest paid

(2,923)(536)

Taxes paid

(15,382)(8,944)

Cash flow before changes in net working capital

80,56997,945

Change in inventories(3,532)(13,789)5,856(10,786)

Change in accounts receivable and other current assets
Change in payables and other liabilities(8,475)

13,624

Cash flow from changes in net working capital(6,150)(10,951)

Cash flow from operating activities

74,41986,995(26,232)

Cash flow from investing activities
Investment in fixed assets

8(26,725)

Investment in intangible assets

10(2,426)(227)(2,528)(144)

Increase (–) in other non-current assets
Decrease (+) in other non-current assets
Cash flow from investing activities

119

150

(31,561)(26,453)(7,427)

Cash flow from financing activities
Treasury shares acquired (–)

15(8,666)

Treasury shares divested (+)

15

7,746

7,225

(3,300)(1,819)(59,252)(56,958)

Payment of lease liabilities
Lease incentive received
Dividends paid to the shareholders of LEM HOLDING SA

892
15

Increase (+) in financial liabilities

128,418

141,745

Decrease (–) in financial liabilities(104,750)(138,590)

Cash flow from financing activities(39,803)(54,932)

Change in cash and cash equivalents

3,054

5,609

Cash and cash equivalents at the beginning of the period

21,775

17,198Exchange effect on cash and cash equivalents(1,120)(1,032)

Cash and cash equivalents at the end of the period

23,71021,775The accompanying notes are an integral part of the consolidated financial statements.

53

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

1.
General information
LEM Group (the Group) is a leading company in electrical measurement. LEM engineers the best solutions for energy and mobility, ensuring that its customers’ systems are optimized, reliable and safe. The Group has operations in seventeen countries
and employed 1,808 people as at 31 March 2024. The parent company of LEM Group is LEM HOLDING SA (the Company) which
is a limited company incorporated in Switzerland. LEM HOLDING SA is domiciled at Route du Nant-d’Avril 152, 1217 Meyrin.
The financial year ends on 31 March 2024. The Company has been listed on the SIX Swiss Exchange since 1986.
The Board of Directors approved the consolidated financial statements on 23 May 2024, to be submitted for approval by the
Annual General Meeting of Shareholders on 27 June 2024.

2.
Material accounting principles
2.1 Basis of preparation
The consolidated financial statements of LEM Group have been prepared in accordance with the IFRS accounting standards
and interpretations published by the International Accounting Standards Board (IASB) and comply with Swiss law.
The consolidated financial statements have been prepared using the historical cost convention except that, as discussed in
the accounting policies below, certain items like derivatives are recorded at fair value.
The financial information is presented in thousands of Swiss francs (CHF). The totals are calculated with the original unit
amounts which could lead to rounding differences. These differences in thousands of units are not changed in order to keep
the accuracy of the original data.
2.2 Adoption of new and revised International Financial Reporting Standards and interpretations
New and amended standards and interpretations
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on orafter 1 January 2023. The Group has not early adopted any other standard, interpretation or amendment that has been issued
but is not yet effective.
Standard or ­interpretation

Title

Effective date

Amendments to IAS 1 andIFRS Practice Statement 2

Making Materiality Judgements

1 January 2023

Amendments to IAS 12

International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12

1 January 2023

For IAS 1 and IFRS Practice statement 2, the amendments have had an impact on the Group’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group’s financial statements.
The amendment, International Tax Reform – Pillar Two Model Rules, had no impact on the Group’s consolidated financial statements as the Group is not in scope of the Pillar Two model rules as its revenue is less that EUR 750 million per year.
Future standards
There are no standards that are not yet effective and that would be expected to have a material impact on the Group in thecurrent or future reporting periods.

LEM Annual Report 23 | 24

54

Notes to the consolidated
financial statements

2.3 Summary of critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions
that affect the reported amounts of revenues, expenses, assets, liabilities and related disclosures at the date of the financial
statements. These estimates are based on management’s best knowledge of current events and actions that the Group mayundertake in the future. However, actual results could differ from those estimates. The key assumptions concerning the futureand other key sources of estimation uncertainty at the reporting date are discussed below.
LeasesThe Group assessed whether a contract is or contains a lease at inception of the contract. This assessment involves the exercise of judgment about whether it depends on a specific asset, whether the Group obtains substantially all the economic
benefits from the use of that asset, and whether the Group has the right to direct the use of the asset.
Impairment of goodwill, other intangible assets and property, plant and equipment
The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. Other intangible assets andproperty, plant and equipment are tested for impairment if there is a triggering event indicating a potential impairment. These
calculations require the use of estimates in particular to the expected growth of sales, discount rates and development of raw
material prices.
Provisions
Provisions are recognized only if the specific criteria under IFRS are met. Provisions represent presumed obligations arisingfrom past events and are recognized only if their amount can be estimated reliably. Nevertheless, provisions are based onassumptions.
Income and other taxes
The Group operates in multiple jurisdictions with complex legal and tax regulatory environments. Some of these positions are
inherently uncertain and include those relating to transfer pricing matters and the interpretation of income tax laws applied
to complex transactions. The Group periodically reassesses its tax positions. The Group recognizes liabilities for potential tax
audit issues and uncertain tax positions based on management’s estimate of whether additional taxes will be due and on therequirements of IFRIC 23 Uncertainty over Income Tax Treatments.
Employee benefits
The standard requires that certain assumptions are made in order to determine the amount to be recorded for defined benefit
obligations and pension plan assets, in particular for defined benefit plans. These are mainly actuarial assumptions such as
expected salary increase, employee turnover and discount rates. Substantial changes in the assumed development of any ofthese variables may significantly change LEM Group’s retirement benefit obligation and pension plan assets.
Valuation of deferred tax assets
The carrying amount of deferred tax assets is reviewed on each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

55

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

2.4 Basis of consolidation
The consolidated financial statements are composed of LEM HOLDING SA and of its subsidiaries.
Subsidiaries
Subsidiaries are those entities over which the Group has control. Control is when the Group is exposed, or has rights, to variable
returns from its involvement with a subsidiary and has the ability to affect those returns through its power over the subsidiary
to direct the relevant activities.
Business combinations are accounted for using the acquisition method. Companies that are acquired are included when control is obtained and are consolidated until control is transferred to the acquirer. The cost of purchasing a company is determinedas the sum of the fair value of the assets that are to be paid to the seller and the obligations that are entered into, or assumed,on the date of purchase. Identifiable acquired assets, liabilities and contingent liabilities are recognized at their fair value as ofthe date of their acquisition. The Group’s share of the purchase price that exceeds the fair value of the identifiable net assets
is recognized as goodwill. The Group’s share of the fair value of the identifiable net assets that exceeds the purchase price isshown as a gain on bargain purchase on the income statement.
Intragroup assets and liabilities as well as income and expenses are set-off against each other.
Unrealized intragroup profits, particularly on inventories and fixed assets, are eliminated.
Associates
Investments in associated undertakings are accounted for using the equity method. These are undertakings over which theGroup exercises significant influence, but which it does not control.
No associated undertakings existed as of 31 March 2024 and 31 March 2023.
2.5 Foreign currencies
Functional and presentation currency
The consolidated financial statements are presented in Swiss francs as the presentation currency. The subsidiaries use local
currencies as their functional currency which is the currency of the primary economic environment in which they operate.
Foreign currency translation
All assets and liabilities in the balance sheets of subsidiaries that are denominated in the respective functional currencies aretranslated into Swiss francs at the year-end exchange rate. Items in the income statement and cash flow statement are translated at the average exchange rate for the year. The resulting translation differences are recognized in other comprehensive
income. When a foreign operation is disposed, the cumulative translation differences recognized in other comprehensive
income are transferred to the income statement.

LEM Annual Report 23 | 2456

Notes to the consolidated
financial statements

The following table summarizes the principal exchange rates that have been used in the translation process:Currency

Income statementof 2023/24

Income statementof 2022/23

Balance sheet
31.3.2024

Balance sheet
31.3.2023

Average rate in CHF

Average rate in CHF

Year-end rate in CHF

Year-end rate in CHF

BGN

0.491

0.508

0.497

0.509

CNY

0.124

0.139

0.125

0.133

DKK

0.129

0.134

0.130

0.134

EUR

0.961

0.994

0.972

0.995

GBP

1.113

1.150

1.137

1.131

JPY

0.00610.00710.00600.0069

MYR

0.191

0.215

0.191

0.207

RUB

0.010

0.014

0.010

0.012

USD

0.886

0.955

0.901

0.914

Foreign currency transactions
Foreign currency transactions are translated at the market rate prevailing at that time. The monetary assets and liabilities aretranslated at the year-end rates while non-monetary assets are translated at historical rates. Gains and losses arising from thetransactions as well as from the translation of monetary assets and liabilities in foreign currencies are recorded as income or
expenses in the income statement (except from translation differences arising from a monetary item that forms part of theGroup’s net investment in a foreign operation which are included in shareholders’ equity).
2.6 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and cash at postal accounts and bank deposits with an original
maturity of three months or less from the date of acquisition that are readily convertible to known amounts of cash.
2.7 Inventories
Inventories are stated at the lower of cost or net realizable value. The first-in, first-out (FIFO) method is applied. The cost offinished goods and work in process comprise raw materials, direct labor costs and other costs that can be directly allocated,such as production overhead expenditures. Allowances are established when:– there is an objective indication that the Group will not be able to sell the goods in due time;– the goods are damaged, in excess or obsolete;– the net realizable value is below cost.
2.8 Property, plant and equipment
Property, plant and equipment is stated at cost of acquisition or construction, less depreciation and any impairment. Depreciation is calculated on a straight-line basis on the following estimated useful life:
Land

nil

Buildings

20 – 40 years

Fixtures and equipment

5 – 15 years

Machinery and equipment

5 – 8 years

Tools and molds

2 – 5 years

Vehicles3 – 5 years

IT equipment

3 – 5 years

57

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Repairs and renewals are charged to the income statement when the expense is incurred. Subsequent expenditure on an itemof property, plant and equipment is capitalized only when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably.
2.9 Leases
The Group recognizes a right-of-use asset and a corresponding lease liability with respect to contracts considered as a leasein which the Group acts as lessee, except for leases with a term of 12 months or less (“short-term leases”) and leases for which
the underlying asset is of a low value (“low-value asset”).
At the commencement date of a lease, a lessee recognizes a liability measured at the present value of future lease payments
using the interest rate stated in the contract or in the absence of such a rate an incremental borrowing rate (i.e., the lease liability) and a corresponding asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use
asset). Extension options are initially only considered if the Group is reasonably certain that such options are exercised. Leaseliabilities are subsequently remeasured in case the lease term is changing or if extension options are reassessed. Right-of-use
assets are adjusted accordingly if lease liabilities are reassessed.
Lease liabilities are thereafter recorded at amortized cost whereas right-of-use assets are depreciated on a straight-line basis
over the lease term.
Real estate leases
The Group leases buildings for use as office and warehouse space. Lease terms are negotiated on an individual basis andcontain a wide range of different terms and conditions. Leases are typically made for a fixed period of 1 to 15 years and may
include extension options.
Vehicles leases
The Group maintains some leased vehicles with an average lease term of three years.
2.10 Intangible assets Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of theacquired subsidiary at the date of acquisition. Goodwill on acquisitions is reported in the balance sheet under intangible assets
and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Research & development
Research costs are expensed as incurred. An intangible asset arising from development is recognized if, and only if, the Groupcan demonstrate the following:– the technical feasibility of completing the intangible asset;– Group’s intention to complete the intangible asset;– ability to use or sell the intangible asset and the expectation that the intangible asset will generate probable future
economic benefits;– the availability of adequate technical, financial and other resources to complete the development; and– the ability to measure the expenditure attributable to the intangible asset during its development reliably.
Such development costs are capitalized and amortized over the life of the product or process.

LEM Annual Report 23 | 24

58

Notes to the consolidated
financial statements

Other intangible assets
Other intangible assets with definite useful lives are carried at cost less amortization and any impairment.
Expenditure on computer software, acquired patents, trademarks and licenses is capitalized and amortized using the straightline method over their useful lives, not exceeding five years.
2.11 Impairment of tangible fixed assets, intangible assets and right-of-use assets
Assets that are subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value lesscost to sell and value in use.
For the purpose of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable
cash-flows (cash-generating unit).
The value in use is calculated based on the estimated future cash-flows expected to result from the use of the asset and eventual disposal, discounted using an appropriate non-current interest rate.
Goodwill is tested for impairment annually (at 31 March) and when circumstances indicate that the carrying value may be
impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill
relates. Impairment losses relating to goodwill cannot be reversed in future years.
2.12 Financial assets
Financial assets comprise cash, receivables, certain accrued income, marketable securities and derivative financial instruments. Financial assets are recorded on the trade date.
Initial recognition and measurement
At initial recognition, financial assets are designated into two categories, financial assets at fair value through profit and loss
and at amortized cost.
Financial assets are initially recognized at fair value plus, in the case of a financial asset not at fair value through profit and loss,
directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification:– financial assets at fair value through profit and loss (refer to note 2.13);– loans and receivables are measured at amortized cost using the effective interest rate method, less impairment.
Accounts receivables are carried at the original invoice amount less an allowance made for doubtful accounts based on areview of all outstanding amounts at year-end covering expected lifetime credit losses. Allowances for doubtful accounts are
established when there is an objective indication that the Group will not be able to collect the amounts due. Allowances for
doubtful accounts are written off when identified as not recoverable in full. For accounts receivable that are not individually
adjusted, LEM applies the simplified approach for the recognition of the expected lifetime losses using a provision matrix.
Other receivables are measured at amortized cost less allowances for amounts that are deemed not to be recoverable.

59

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

2.13 Derivative financial instruments
The Group uses derivative financial instruments to hedge foreign exchange risks of forecasted transactions. Derivative financial
instruments comprise forward exchange contracts.
Derivative financial instruments are initially measured at fair value and subsequently at fair value through profit and loss. Any
gains and losses arising from changes in fair value on derivatives are recorded directly in the income statement which meansthat the Group does not apply hedge accounting.
Derivative financial instruments are shown as part of other current assets and other current liabilities. In case the maturity isafter more than one year, derivative financial instruments are recognized under other non-current assets or other non-current
liabilities.
2.14 Financial liabilities
Financial liabilities comprise bank loans, payables, certain accrued expenses and derivative financial instruments at the end of
the period. Financial liabilities are initially recorded on the trade date.
All financial liabilities are recognized initially at fair value less, in the case of financial liabilities not at fair value through profit andloss, directly attributable transaction costs.
Financial liabilities that are due within 12 months after the balance sheet date are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability until at least 12 months after the balance sheet date.
Borrowing costs are expensed as incurred except if they are capitalized as part of a qualifying asset.
Subsequent measurement
Subsequently, financial liabilities other than derivatives are measured at amortized cost based on their effective interest rate.
Interest expenses and foreign currency revaluations are recognized in the income statement. On derecognition, gains and losses are recognized in the income statement. Financial liabilities are derecognized when the contractual obligations are fulfilled,
cancelled or expired.
2.15 Employee benefits
The Swiss and German subsidiaries provide a defined benefit plan for employees; the other subsidiaries provide defined contribution plans according to local laws. In both cases the charges are included in the related periods in the personnel expensesof the various functions where the employees are located.
Defined benefit plan
The defined benefit obligation is determined annually by qualified independent actuaries. The obligation and cost of pension
benefits are determined using the projected unit credit method. Service costs are part of personnel expenses and consist of
current service cost, past service cost and gains/losses from plan settlements. Past service costs are recognized at the earlier of the date when the plan amendment occurs, or when restructuring costs are recognized. They include plan amendment
and curtailment. Gains or losses on settlement of pension benefits are recognized when the settlement occurs. Net interestis recorded in the financial result and is determined by applying the discount rate to the net defined benefit liability/asset thatexists at the beginning of the year. Actuarial gains and losses resulting from changes in actuarial assumptions and experience
adjustments are recorded in other comprehensive income as remeasurements of employee benefits. The return on plan assets(excluding interest based on the discount rate) and any change in the effect of an asset ceiling are also recorded in this line.
In accordance with IFRIC 14, any assets resulting from surpluses in defined benefit plans are limited to their economic benefit
such as to the value of the maximum future savings from reduced contributions.

LEM Annual Report 23 | 2460

Notes to the consolidated
financial statements

Defined contribution plan
The subsidiaries sponsor defined contribution plans including state plans based on local laws and regulations. Defined contribution plan expenses are recorded in the income statement as incurred.
LEM Incentive System
The LEM Incentive System consists of a short-term incentive component and a long-term incentive component.
The short-term incentive component compensates for the actual annual results and achieved performance. The long-term
incentive plan rewards the members of the Executive Management and Senior Managers for the sustainable financial performance of the Group.
Both elements are cash settled and the bonus payments are made in the first four months of the following fiscal year. The estimated payments are accrued for at year-end.
As of 2022/23, the Board of Directors of LEM HOLDING SA decided to replace the current cash-based long-term incentive planfor LEM’s Executive Management by a share-based Performance Share Unit (“PSU”) plan.
Share-based payment
The purpose of the share-based Performance Share Unit (“PSU”) plan is to offer LEM’s senior management and Executive
Management the possibility to participate in the future long-term business results of LEM Group, provide an increased incentive for participants and foster loyalty as well as align the interests among senior management and Executive Management,
LEM Group as well as its shareholders.
The number of shares obtained per PSU can thereby vary between 0% and 200% of the award, subject to continuous employment and depending on the achievement of pre-agreed performance conditions.
The performance conditions include non-market and market conditions such as economic value added (“EVA”), absolute total shareholder return (“absolute TSR”), and total shareholder return measured relative to the SPI EXTRA® Total Return Index(“relative TSR”). The grant-date fair value estimate of market conditions is based on a Monte Carlo simulation. The performance
conditions are measured over the period of three consecutive financial years starting with the financial year during which theaward date occurs, relevant for measuring the long-term performance.
The Group accounts for the PSU as an equity-settled plan.
The employee services received in exchange for the grant of the PSU are measured at the fair value of the equity instruments
granted and are recognized as expenses, with a corresponding increase in retained earnings over the vesting period.
The dilutive impact of the outstanding performance share plan is reflected in the calculation of diluted earnings per share.
Further details about this share-based payment LTI plan are provided in the compensation report.
2.16 Provisions and contingent liabilities
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of
the obligation.

61

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Warranty and customer claims
The Group recognizes the estimated liability to replace products still under the contractual warranty at the balance sheet date.
This position is calculated based on past history of the level of repairs and replacements. Additional specific provisions arebooked when required.
Litigations
The Group recognizes the estimated country and entity-specific risks relating to litigations with former personnel or indirect
taxation.
Restructuring
A constructive obligation to restructure arises only when an entity has a detailed formal plan for the restructuring identifying
at least:– the business or part of a business concerned;– the principal locations affected, function and approximate number of employees who will be compensated for terminating
their services;– the expenditures that will be undertaken; and– when the plan will be implemented;
and raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.
Contingent liabilities
Contingent liabilities arise from past events where the outcome depends on future events. As the probability either cannot bemeasured reliably or the probability for a subsequent outflow lies below 50%, contingent liabilities are not recognized in thebalance sheet but are described in the notes.
2.17 Share capital
LEM HOLDING SA has only ordinary registered shares. Dividends on ordinary shares are deducted from equity in the period inwhich they are declared.
Treasury shares
Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain orloss is recognized in the income statement on the purchase, sale, issue or cancellation of the Group’s own equity instruments.
Any difference between the carrying amount and the consideration is recognized in retained earnings.
2.18 Revenue recognition
Revenue from the sale of products is recognized at a point in time when LEM satisfies its performance obligation, which is themoment when the customer acquires control over the products. This is generally achieved at delivery of the products. Revenue
is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of
payment and excluding taxes or duty.
Revenue from the sale of products comprises all revenue that is derived from sales of products to third parties after deductionof rebates and value-added taxes.

LEM Annual Report 23 | 24

62

Notes to the consolidated
financial statements

2.19 Income taxes and deferred taxation
Income taxes
Income taxes comprise all current and deferred income taxes, including the withholding tax payable on profit distributions within the Group. Income taxes are recognized in the consolidated income statement except for income taxes on transactions thatare recognized directly in shareholders’ equity or in other comprehensive income.
Deferred taxation
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax base of
assets and liabilities and their carrying amounts in the financial statements. Deferred taxes are determined using tax rates that
apply, or have been substantially enacted, on the balance sheet date in the countries where the Group is active. Tax losses
carried forward and deductible temporary differences are recognized as deferred tax assets to the extent that it is probablethat tax profit will be available in the future against which the tax losses carried forward can be utilized. Deferred tax assets andliabilities are offset against each other if the corresponding income taxes arise by the same tax authority and a legally enforceable right for offsetting exists.

3.
Segment Information
For management purposes, LEM Group is organized into two reportable segments as follows:– Region of Asia which includes China, Japan, South Korea, India, Southeast Asia;– Region of Europe/Americas which includes Europe, Middle East, Africa, NAFTA and Latin America.
The Group evaluates the performance of its reportable segments based on net sales and operating profit. Net sales for geographic segments are based on the location of customers. Operating profit for each segment includes net sales to third parties,
related cost of sales and operating expenses directly attributable to the segment.
Centralized headquarter support functions as well as certain research and development costs managed outside of the reportable segments are allocated to each segment based on sales.
The Group does not include intercompany transfers between segments for management reporting purposes. The reporting
segments are presented in a manner consistent with the internal reporting.

63

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Business segment information
Asia

Europe/Americas

LEM Group2023/242022/232023/242022/232023/242022/23

Sales

201,982

228,900

203,795

177,450

405,777

406,350

EBITDA38,56360,591

58,74446,55797,307

107,148

3,690

3,705

8,888

7,765

12,578

11,470

44

217

247

167

291

383

Right-of-use assets

1,014

1,021

2,367

2,094

3,381

3,115

Total

4,748

4,943

11,502

10,026

16,25014,968Operating profit

33,81655,64847,24236,531

In CHF thousands

Income statement

Depreciation and amortization
Property, plant and equipment
Intangible assets

Interest expenses

81,05892,180(3,181)(1,719)422

392

Foreign currency exchange effectInterest revenue(3,326)(1,928)Taxes(9,645)(13,585)

Net profit for the year

65,32775,34026,232

Capital expenditures
Property, plant and equipment

11,763

11,48014,962

14,752

26,725

18

71

2,408

156

2,426

227

Total capital expenditures

11,781

11,551

17,37014,90829,151

26,459Goodwill

2,759

2,907

2,759

2,907

Intangible assets

Assets by reportable segments include trade receivables, inventories, property, plant and equipment, right-of-use assets.
Liabilities by reportable segments include trade payables, accrued expenses and lease liabilities.

4.

Revenue information

Regional information
2023/242022/23

China

119,656

157,897

Rest of Asia

82,32671,003

Total region Asia

201,982

228,900

EMEA

156,514

127,668

Americas47,28149,782

Total region Europe/Americas

203,795

177,450

LEM Group

405,777

406,350

In CHF thousands

Sales

LEM Annual Report 23 | 24

64

Notes to the consolidated
financial statements

Geographical information
China

USA

GermanyJapan

2023/242022/232023/242022/232023/242022/232023/242022/23

In CHF thousands

Sales

119,656

157,897

42,941

44,56052,33343,53327,00829,149Non-current assets1

15,02615,990

154

98

154

132

3,133

3,425

Right-of-use assets

604

1,339

303

394

211

8

91

247

2023/242022/232023/242022/232023/242022/232023/242022/23

29,78924,650406,350South Korea

Italy

Other countries

LEM Group

In CHF thousands

14,595

13,827

119,456

92,734

405,777

Non-current assets1

Sales

0

21

75,64459,902

94,111

79,567Right-of-use assets

21

37

24,66623,24125,89725,266

1 Other than financial instruments, deferred tax assets and post-employment benefit assets.

Sales are reported as per place of transaction destination.

5.

Accounts receivable
31.3.2024

31.3.2023

In CHF thousands

Accounts receivable – trade74,41282,525

Allowance for doubtful accounts / expected credit losses(1,678)(1,379)81,146

Total accounts receivable – trade

72,734

Other receivables

3,391

5,313

Total

76,12586,458

Movements of allowance for doubtful accounts/expected credit losses
Total
In CHF thousands

Balance as per 1 April 2022

1,147

Addition

467

Utilized during the year

(188)

Foreign exchange effect(47)

Balance as per 31 March 2023

1,379

Balance as per 1 April 2023

1,379

Addition

385

Utilized during the year

(45)

Foreign exchange effect(41)

Balance as per 31 March 2024

1,678

65

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Aging analysis of accounts receivableNot due< 30 days

31– 90 days

91– 180 days

> 180 days

Total

70,633

8,116

2,343

363

1,070

82,525

(157)

(117)

(90)

(1,015)(1,379)

286

5,313

341

86,458In CHF thousands

31 March 2023
Accounts receivable – trade
Allowances for doubtful accounts /expected credit losses
Other receivables

4,517

510

Total

75,150

8,469

2,226

273

53,266

12,499

5,483

1,266

1,898

74,412

(75)

(148)

(252)

(1,203)(1,678)12,424

5,335

1,013

696

76,12531 March 2024
Accounts receivable – trade
Allowances for doubtful accounts /expected credit losses
Other receivables

3,391

Total

56,657

6.

3,391

Inventories
31.3.2024

31.3.2023
30,756

In CHF thousands

Raw material

28,558Work in progress

1,515

3,323

Finished goods and goods for resale

26,28822,752

Total

56,361

56,831

The inventories include allowances of CHF 7,363 thousand (at 31 March 2023: CHF 6,090 thousand).

7.

Other current assets
31.3.2024

31.3.2023

Advances to suppliers

2,310

2,682

Prepayments and accrued income

2,789

1,952

In CHF thousands

Derivative financial instruments
Other current assets
Total

LEM Annual Report 23 | 24

66

42
1

2

5,099

4,678

Notes to the consolidated
financial statements

8.

Property, plant and equipment

In CHF thousands

Net book value 1 April 2022
Acquisitions

Land and buildings

Machinery andequipment

Total

1,055

59,51860,574717

25,736

26,453

Disposals

(140)

(140)

Impairment

(442)

(442)

Other movements

(17)

(17)

(13)

(11,016)(11,028)

Depreciation charge
Foreign exchange effect(57)(1,762)(1,819)Net book value 31 March 2023

1,703

71,87873,580At cost of acquisition

1,804

161,131

162,934

Accumulated depreciation(101)(89,253)(89,354)

Net book value 31 March 2023

1,703

71,87873,580Net book value 1 April 2023

1,703

71,87873,580Acquisitions

7,821

18,231

26,052

(235)

(235)

Disposals
Impairment reversal (charge)
Transfer to right of use

751

751

(1,302)(1,302)Other movements

4,232(4,291)(59)

Depreciation charge(319)(11,780)(12,099)

Foreign exchange effect(118)(1,485)(1,603)

Net book value 31 March 2024

12,01673,06985,085

At cost of acquisition

12,424

170,866

183,289(408)(97,796)(98,205)

12,01673,06985,085

Accumulated depreciation
Net book value 31 March 2024

67

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

9.
9.1

LeasesRight-of-use assets
Real estate

VehiclesTotal

28,272

164

28,436

880

231

1,111

(2,984)(130)(3,114)

(271)

(14)

(285)

25,015251

25,266

In CHF thousands

Net book value 1 April 2022
Addition
Remeasurement(882)

Depreciation
Foreign exchange effect
Net book value 31 March 2023

(882)

At cost of acquisition

33,114583

33,697

Accumulated depreciation(8,099)(332)(8,431)

Net book value 31 March 2023

25,015251

25,266

Net book value 1 April 2023

25,015251

25,266

Addition

2,593

334

2,927

Remeasurement

1,224(3,190)(170)(3,360)Depreciation
Foreign exchange effect
Net book value 31 March 2024
At cost of acquisition

1,224

(142)

(18)

(160)

25,500397

25,89736,045

1,125

37,169

Accumulated depreciation(10,545)(728)(11,272)

Net book value 31 March 2024

25,500397

25,897

LEM Annual Report 23 | 24

68

Notes to the consolidated
financial statements

9.2 Lease liabilities
The Group presents the lease liabilities in the table below:
Current leaseliabilities

Non-current
lease liabilities

1,646

28,375Total

In CHF thousands

Balance as per 1 April 2022
Payment of lease liabilities including interest
Lease incentive

30,021(1,819)(1,819)892

892

Non-cash items
Addition

224

Interest

1,006

Remeasurements(873)

Transfer from non-current to current

2,149

887

1,111
1,006
(873)

(2,149)Foreign exchange effect

(121)

(183)

(304)

Balance as per 31 March 2023

3,103

26,93030,034

3,103

26,930

Balance as per 1 April 2023
Payment of lease liabilities including interest

30,034(4,373)(4,373)

Lease incentive
Non-cash items
Addition

152

Interest

1,073

2,117

2,269
1,073

Remeasurements
Transfer from non-current to current
Foreign exchange effectBalance as per 31 March 2024

2,931

(2,931)

(91)

(81)

(171)

2,796

26,03528,831

31.3.2024

31.3.2023

The weighted average incremental borrowing rate is 3.72% (31 March 2023: 3.35%).
The following table presents the contract undiscounted cash flows for lease obligations:
Undiscounted cash flows
In CHF thousands

Within 1 year

3,781

4,261

Within 1 year to 5 years

12,674

12,118

Above 5 years

17,931

20,862

9.3 Other lease disclosures
The following expenses related to the Group’s leasing activities are recognized in the income statement:
Expenses related to the Group’s leasing activities
2023/242022/23

In CHF thousands

Expenses relating to short-term leases / low value assets
Depreciation of right-of-use assets(977)(1,001)(3,360)(3,114)

Interest expenses on lease liabilities(1,073)(1,006)

Total(5,410)(5,121)69

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

10.

Intangible assets
Other
intangible assets

Goodwill

Patents

Total

3,022

130

920

4,072

51

2,368

2,418

In CHF thousands

Net book value 1 April 2022
Investment
Other movements
Amortization
Foreign exchange effect(115)

Net book value 31 March 2023

2,907

At cost of acquisition

2,907

Accumulated amortization

181

16

16

(383)

(383)

(21)

(136)

2,899

5,987

516

11,505

14,928(335)(8,606)(8,941)

Net book value 31 March 2023

2,907

181

2,899

5,987

Net book value 1 April 2023

2,907

181

2,899

5,987

4

3,220

3,223

Investment
Other movements
Amortization

49

49

(291)

(291)

Foreign exchange effect

(149)

(1)

207

58

Net book value 31 March 2024

2,759

183

6,085

9,026

At cost of acquisition

2,759

518

14,933

18,210(0)(335)(8,849)(9,184)

2,759

183

6,085

9,026

Accumulated amortization
Net book value 31 March 2024

The entire goodwill of LEM Group results from the acquisition of NANA in 2000/01 and is allocated to the cash-generating unit
LEM Japan KK. The goodwill relates to the Asia business segment. The recoverable amount has been determined based onvalue-in-use calculations. These calculations use cash flow projections of five years based on financial business plans andbudgets approved by management. The projections include assumptions concerning revenue growth and expected operating
costs over the next five years plus a continuous period. Average revenue growth is projected at 13.1% and operating costs
were estimated based on the experience of management. The pretax discount rate used within these cash flow calculations
is 13.8% (2022/23 13.7%) and is based on the weighted average cost of capital of a peer group. The carrying value of the
cash-generating unit including goodwill was compared to the value in use and no impairment was found to be present for theyear ended 31 March 2024.
This year, the Group continues to invest into the transformation program, initiated last year, to support LEM’s future growth. Thistransformation program contains cloud computing arrangements on which an assessment has been made to ensure it complies
with IAS 38 Intangible assets. In relation to cloud computing arrangements, an entity needs to assess whether an intangible asset(s) is(are) present, i.e. does the contract provide the customer with a resource that it can control. Costs of implementationsuch as testing software and configuration are capitalized if directly attributable, and programming of interfaces are capitalized
if they met the definition of IAS 38. All other costs are expensed.

LEM Annual Report 23 | 2470

Notes to the consolidated
financial statements

11.

Other non-current assets
31.3.2024

31.3.2023

100

140

In CHF thousands

Loan to personnel
Recognized surplus – pension plan

2,339

Deposits and guarantees
Total

12.

590

524

3,029

664

31.3.2024

31.3.2023
33,004

Accounts payable

In CHF thousands

Total accounts payable – trade

24,912Other payables

3,440

3,067

Total

28,352

36,071

Other

Total

13.

Provisions
Warranty andcustomer claims

Litigations andindirect taxes

Balance as per 1 April 2022

681

210

Additional provisions

334

In CHF thousands

(35)

58

950

727

1,061

Unused amounts reversed

(177)

(4)

(216)

Utilized during the year

(71)

(12)

(83)

Foreign exchange effect

(26)

(64)

(91)

Balance as per 31 March 2023

741

705

1,621

175

Of which current

601

Of which non-current

1,020

Balance as per 1 April 2023

741

Additional provisions

373

175

705

1,621

1

374

Unused amounts reversed

(243)

(175)

(417)

Utilized during the year

(61)

Foreign exchange effect

(12)

0

(63)

(75)

Balance as per 31 March 2024

798

0

360

1,159

(283)

(344)

Of which current

856

Of which non-current

303

71

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Warranty and customer claims
Provisions for warranty and customer claims have been estimated based on past experience and the risk assessment of management. The warranty provision is expected to be used over the next five years.
Litigations and indirect taxes
Despite the care that LEM applies in the separation process with personnel, such separation may result in legal conflicts. The
Group reviews all legal claims and takes appropriate actions to support its position and management estimates the reasonablerisk to be provided for. The Company operates in multiple jurisdictions with complex legal and tax regulatory environments. Indirect tax provisions include disputes and uncertainties on non-income taxes (mainly VAT and sales taxes). They cover numerous
separate cases whose detailed disclosure could be detrimental to the Group’s interests. The Group does not believe that anyof these cases will have a material adverse impact on its financial position.
Other
The restructuration provision of CHF 380,000 recorded last year for the termination of LEM Russia operation has been utilized
for CHF 300,000 in 2023/24.

14.

Other liabilities
31.3.2024

31.3.2023

Post-employment benefit plans

459

513

Derivative financial instruments

890

In CHF thousands

Other liabilities

1,605

4,613

Total

2,953

5,127

2,392

2,228

561

2,899

Of which current
Of which non-current

15. Equity
Share capital
The nominal share capital of CHF 570,000 comprises 1,140,000 registered shares, each with a nominal value of CHF 0.50. Thereis neither authorized nor conditional share capital outstanding.
Investments in shares of LEM HOLDING SA held by the Group are classified as treasury shares and are accounted for at historicalcost. Treasury shares are not entitled to dividends.

LEM Annual Report 23 | 2472

Notes to the consolidated
financial statements

Movement of treasury shares
NumberHigh

Price per share in CHF
AverageLow

Value
in CHF thousands

In number of shares, in CHF

Value 1 April 2022

449

Purchases at cost

3,986

2,401.82

1,863.23

1,392.29

7,427(3,880)2,438.18

1,890.66

1,439.90(7,336)2,263.75

1,939.04

1,575.00

8,666(3,945)2,280.00

1,952.28

1,576.00(7,702)(21)

2,099.65

2,099.65

2,099.65

Sales at cost
Value 31 March 2023
Purchases at cost
Sales at cost
Granted to employees at cost
Value 31 March 2024

977

555
4,469

1,069

1,058

(44)
1,988

In CHF

Ordinary dividend per share 2022/23		

52.00

Ordinary dividend per share 2023/24

50.00

A dividend of CHF 50 per share will be proposed by the Board of Directors to the Annual General Meeting of Shareholders of
the Group on 27 June 2024. The expected payout for dividends amounts to CHF 57.0 million.

16.

Staff costs
2023/242022/23

Production(28,467)(28,520)

Sales(18,609)(19,544)

Administration(18,546)(16,192)

Research & development(27,092)(23,833)

Total(92,714)(88,089)

Salaries and wages(86,890)(83,039)

Temporary employee costs(4,104)(3,596)(1,549)(1,274)

In CHF thousands

Cost of defined benefit plans
Cost of defined contribution plans
Total
Number of employees at the end of the financial year

Notes

24.1

(171)

(180)

(92,714)(88,089)

31.3.2024

31.3.2023

Permanent employees

1,574

1,488

Temporary employees

217

216

Apprentices

18

13

1,808

1,716

Total

73

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

17.
Share-based payments
The grant-date fair value is calculated based on the closing share price as reported by SIX Swiss Exchange at the date of the grant.
As the EVA condition is a non-market condition, the future EVA performance realization is not reflected in the grant-date fairvalue. Since plan participants are not entitled to dividends during the vesting period, the value of the EVA-driven part of a PSU
is reduced by the present value of the expected dividend stream during the period from the grant date to the vesting date.
The three-year TSR is calculated as the relation between the average daily closing share prices / index performance during
the month of March of the year of grant and the average daily closing share prices / index performance during the month ofMarch of the year of vesting assuming dividend payments over the performance period are reinvested in shares at the time ofthe distribution and expressed in percentage based on the compound annual growth rate (CAGR) over the performance period.
Relative TSR is calculated as a simple difference between the three-year LEM’s TSR CAGR and the three-year TSR CAGR of the
SPI EXTRA® Index.
As of 31 March 2024, the Group has the following plans ongoing:

Number of
PSU
allocated

Revision of
sharenumberrelated toservice andperformance
conditions

Number ofsharesdefinitely
allocated in
March 2024

Number ofsharesexpected to
be deliveredat vestingdate

Grant date

Vesting date

Number of
beneficiaries

Plan Cycle 2022/23
to 2024/25

20.7.2022

20.7.2025

32

995

(136)

(21)

838

Plan Cycle 2023/24
to 2025/26

19.7.2023

19.7.2026

33

879

(44)

0

835

Plan name

Fair value at
grant date(in CHF)

Absolute TSR fairvalue at grant date(in CHF)

Relative TSR fairvalue at grant date(in CHF)

EVA fair value at
grant date(in CHF)

Plan Cycle 2022/23
to 2024/25

1,518.18

1,187.22

1,627.70

1,592.00

Plan Cycle 2023/24
to 2025/26

2,043.31

2,137.22

2,393.35

1,895.32

The expense recognised for employee services received during the year is shown in the following table:
31.3.2024

31.3.2023

Expense arising from equity-settled share-based payment transactions

781

514

Plan Cycle 2022/23 to 2024/25

358

514

Plan Cycle 2023/24 to 2025/26

423

In CHF thousands

The following tables list the inputs to the models used for the calculation of the fair value of the plans:
Plan Cycle 2023/24 to 2025/26

Plan Cycle 2022/23 to 2024/25

LEM

SPI Index

LEM

SPI Index

Risk-free interest

1.09%

1.09%

1.09%

1.09%

Dividend yield

2.85%

–

3.07%

Expected volatility

35.27%

16.09%

36.66%In %LEM Annual Report 23 | 2474

18.42%

Notes to the consolidated
financial statements

18.

Financial expenses
2023/242022/23(2,923)(1,542)

In CHF thousands

Interest expenses
Other financial expenses

(258)

(177)

(3,181)(1,719)2023/242022/23

Interest income on cash

422

392

Total

422

392

2023/242022/23(2,543)(2,191)

Total

19.

Financial income

In CHF thousands

20.

Exchange effect

In CHF thousands

Exchange gains /losses
Fair value revaluation on derivatives
Gains and losses on derivatives 1
Total

(932)

18

148

246

(3,326)(1,928)

1 Position includes cost of derivative hedging.

In 2023/24, the exchange effect is mainly driven by the foreign exchange loss linked to EUR devaluation.

21. Income taxes, deferred tax assets and liabilities
The Group operates in multiple jurisdictions with complex legal and tax regulatory environments. In certain of these jurisdictions, the Group has taken income tax positions that management believes are supportable and are intended to withstandchallenges by tax authorities. Some of these positions are inherently uncertain and include those relating to transfer pricing
matters and the interpretation of income tax laws applied to complex transactions. The Company periodically reassesses its tax
positions. Considering all available information and the history of resolving income tax uncertainties, the Group believes thatthe ultimate resolution of such matters will not have a material effect on its financial statements.
Differences between the final tax outcome and the amounts that were initially recorded impact the income and deferred taxes
in the period in which such determinations are made. The Group calculates its expected average tax rate as a weighted averageof the tax rates in the tax jurisdictions in which the Group operates.
LEM may repatriate all available dividends from its subsidiaries from time to time. Unrecoverable withholding taxes are considered part of the expected tax rate. Deferred income tax liabilities have been established for unrecoverable withholding taxes
that would be payable on the unremitted earnings of foreign subsidiaries.
The tax expense relating to components of other comprehensive income amounts to CHF 173,000 for the year 2023/24(tax expense of CHF 758,000 in 2022/23).

75

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Income tax
2023/242022/23(12,347)(9,608)893(4,462)

In CHF thousands

Current income taxes
Deferred taxes relating to the origination and reversal of temporary differences
Deferred tax income/(expense) resulting from reduction in tax rates

1,693

0

116

485

(9,645)(13,585)2023/242022/23

Group’s average expected income tax rate

16.3

15.6

Group’s average expected withholding tax rate

(0.1)

0.8

Group’s average expected tax rate

16.2

16.4

Permanent differences

(0.5)

(0.4)

Adjustment in respect of previous periods’ income tax

(0.2)

(0.6)

Recognition of previously unrecorded tax losses

(2.3)

0.0

Other differences

(0.4)

(0.2)

Group’s effective tax rate

12.9

15.3

Adjustment recognized in the period for current tax of prior year
Total

The Group’s effective tax rate differs from the Group’s average expected tax rate as follows:In %Tax effect of

As of 31 March, 2024, LEM Group recognized a tax profit of CHF 1.7 million related to the increase of its deferred tax assets.
This is mainly due to the decision taken by Swiss cantonal authorities in September 2023 to raise the income tax rate in 2024.

Deferred tax assets and liabilities
Deferred taxes have been calculated on the following balance sheet positions:31.3.2024

31.3.2023

Asset

Liability

Asset

Liability

50,149(6,021)

48,524(5,116)

168

(124)

108

(113)

Inventories

1,235

(410)

1,425

(591)

Property, plant and equipment

2,064(4,751)

1,348(3,891)

46,585(25)

45,635

(24)

96

(711)

8

(497)

Liabilities

4,950(1,889)4,825(2,798)Provisions

66

0

218

0

4,884

0

4,607

0

Gross deferred taxes

55,099(7,910)53,349(7,914)

Offsetting(5,563)

5,563(4,980)4,980

Net deferred taxes

49,536(2,347)48,369(2,934)

In CHF thousands

Assets
Accounts receivable

Intangible assets
Tax losses carried forward
Other assets

OthersWithholding tax on dividends

LEM Annual Report 23 | 2476

(1,889)(2,798)

Notes to the consolidated
financial statements

The balance sheet contains the following:
31.3.2024

31.3.2023

Deferred tax assets

49,53648,369Deferred tax liabilities(2,347)(2,934)

Net assets

47,18945,435

In 2023/24, the deferred tax assets of CHF 49.5 million are mainly linked to the deferred tax asset of the technical intellectual
property intercompany sale, the latest occurring in 2023/24, and usufruct sale in 2020/21.

22. Earnings per share
Net earnings per share is calculated by dividing the net profit for the financial period by the average number of shares in issue
over the period net of treasury shares held.
Only treasury shares held by LEM Group and allocated at the closing to share performance plan guarantee a dilutive effect on
the calculation of diluted earnings per share.
The following table reflects the income and share data used in the basic and diluted EPS calculations:
2023/242022/23

Basic earnings per share
Net profit for the year attributable to LEM shareholders – in CHF thousands

65,32775,340Ordinary number of shares at the beginning of the year

1,140,000

1,140,000

Weighted average number of ordinary shares

1,140,000

1,140,000

Weighted average number of treasury shares

874

544

1,139,125

1,139,456

57.35

66.12

Weighted average number of shares outstanding
Earnings per share – basic in CHF
Diluted earnings per share
Net profit for the year attributable to LEM shareholders – in CHF thousands
Weighted average number of shares outstanding
Share-based payment plans
Adjusted weighted average number of shares outstanding
Earnings per share – diluted in CHF

65,32775,3401,139,125

1,139,456

1,673

908

1,140,798

1,140,364

57.26

66.07

77

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

23. Related parties
Related parties are the Board of Directors and the Executive Managers as defined in the Corporate Governance guidelines.
The compensation to the Board of Directors is paid as a fixed fee in cash. The compensation for the Executive Management includes base salary, a performance-related bonus (LEM Incentive System), bonus and post-employment benefits. In
2023/24 and 2022/23, no termination benefits have been paid. The base salary is the employee’s compensation before
deduction of the employee’s social security contributions. Bonus payments are made in cash.
Compensation of the Board of Directors
2023/242022/23

In CHF thousands

Annual fees

(1,020)

(870)

Total

(1,020)(870)

2023/242022/23

Compensation of the Executive Management
In CHF thousands

Base salary(2,687)(2,002)Bonus(1,482)(2,143)

Other benefits

(150)

(26)

Company’s contribution to pension fund

(265)

(203)

(4,584)(4,374)

Total

Share-based payments of the Executive Management

Numberof shares
allocated

Revision ofshare number
related toservice andperformance
conditions–50

Grant date

Vesting date

Number of
beneficiaries

Plan Cycle 2022/23
to 2024/25

20.7.2022

20.7.2025

4

604Plan Cycle 2023/24
to 2025/26

19.7.2023

19.7.2026

7

578Plan name

Number ofsharesdefinitely
allocated in
March 2024

Number ofsharesexpected to
be deliveredat vesting
date

21

533

0

578

In 2023/24 and 2022/23, no member of the Board of Directors has any significant business connection with LEM Group.
For details on the compensation of the Board of Directors and of the Executive Management, please refer to the compensation
report. Also, see Significant Accounting Principles 2.15 Employee benefits.

LEM Annual Report 23 | 2478

Notes to the consolidated
financial statements

24. Retirement benefit obligations
The Group operates a defined benefit plan for all its employees in Switzerland with a collective foundation.
This foundation is a separate legal entity which is not part of the Group. It is managed by a board of trustees having equal representation of employees and employers of the affiliated companies. It is supervised by the supervisory authority and complies
with the requirements of Swiss pension law. The Company pays contributions that are based on a percentage of the insured
salary under the Swiss law. The pension plan qualifies as a defined benefit plan under IAS 19 due to the various benefits guaranteed according to the law.
The plan is funded by contributions from both employer and employees. The plan participants are insured against the financial
consequences of old age, disability and death. The retirement benefit is based on a notional individual savings account converted at retirement into a fixed pension benefit.
The assets of the foundation are invested in a diversified portfolio. Death in service and disability benefits are insured with aninsurance company. The pension plan does not expose the affiliated companies to any additional unusual risks not foreseen by
the law. No curtailments or settlements occurred in 2023/24.
As at 31 March 2024, the pension plan is in surplus. Based on the expected amount of contributions to be paid over the next year
versus the next year employer service cost, an economic benefit in the form of a reduction in future contributions can be realised. Therefore, the full amount of the surplus is recognised as per IFRIC 14 requirements for an amount of CHF 2,339 thousand.
The following main assumptions have been updated:– discount rate from 2.1% to 1.4%;– interests credited on savings account remains stable at 1.5%;– salary increase rate remains stable at 1%.
Applying the rules of IAS 19, this adjustment was accounted for in other comprehensive income and did not impact the net
profit for the year.
The subsidiaries abroad sponsor either defined contribution plans or defined benefit plans based on local laws and regulations.
A former employee in Germany benefits from a defined benefit obligation amounting to CHF 244 thousand at 31.3.2024 (CHF
249 thousand at 31.3.2023). Other subsidiaries, defined benefit obligations in Japan, Bulgaria and Italy amount to CHF 221
thousand at 31.3.2024 (CHF 264 thousand at 31.3.2023).
31.3.2024

31.3.2023

Fair value of plan assets at year-end

54,272

48,768

Defined benefit obligations at year-end

51,93344,435

Surplus

2,339

4,333

0

(4,333)

2,339

0

In CHF thousands

Effect of asset ceiling
Funded status (Net assets in the balance sheet)79

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

24.1 Cost of defined benefit plans
2023/242022/23

1,587

1,682

0

(386)

In CHF thousands

Current service cost
Past service cost
Net interest (income)/cost
Total pension expenses recorded in the consolidated income statement

(38)

(22)

1,549

1,274

Costs related to the pension plan were charged to the different functional departments based on salary costs.
In 2022/23, past service costs resulted from a change in the conversion rate.
24.2 Remeasurements of employee benefits
2023/242022/23

4,696(3,601)

In CHF thousands

Experience adjustments on defined benefit obligation
Change in the effect of asset ceiling(4,425)498

Return on plan assets excluding interests(2,358)

3,347

Total remeasurements recorded in other comprehensive income(2,087)244

2023/242022/23(4,334)(3,788)

4,425

(498)

24.3 Reconcilitation of the effect of asset ceiling
In CHF thousands

Effect of asset ceiling per beginning of year
Change in the effect of asset ceiling
Net interest (income)/cost
Effect of asset ceiling per end of year

24.4

(91)

(48)

0

(4,334)31.3.2024

31.3.2023

Change in fair value of plan assets

In CHF thousands

Fair value of plan assets as per beginning of year

48,76848,672Return on plan assets excluding interest income

2,358(3,347)

Interest income on plan assets

1,042

618

Employer’s contributions

1,810

1,518

1,727

1,403

Employees’ contributions
Benefits paid

(1,433)(95)

Fair value of plan assets as per end of year

54,272

48,768LEM Annual Report 23 | 2480

Notes to the consolidated
financial statements

24.5 Change in present value of defined benefit obligation
31.3.2024

31.3.2023

Defined benefit obligation per beginning of year

44,43544,884Current service cost

1,587

1,682

In CHF thousands

Past service cost
Employees’ contributions
Interest cost
Actual (gains)/losses
due to changes in assumptions
due to demographic and experience changes

0

(386)

1,727

1,403

913

549

4,704

(3,601)

4,735(4,359)(30)

758

Benefits paid

(1,433)(95)

Defined benefit obligation per end of year

51,93344,435

The weighted average duration of the Defined Benefit Obligation (DBO) at the end of the current fiscal year is 15 years.
In 2022/23, past service costs resulted from a change in the conversion rate.
24.6 Asset allocation of investments
Major categories of plan assets as a percentage of the fair value of total plan assets
Long-term target

2023/242022/23In %Equity securities

35.0%

35.7%

33.1%

Debt securities

39.0%

36.2%

31.2%

Real estate

24.0%

25.3%

28.4%

Cash and other investments

2.0%

2.8%

7.3%

100.0%

100.0%

100.0%

Strategic pension plan allocations are determined by the objective to achieve a return on investment which, together with thecontribution paid, is sufficient to maintain reasonable control over the various funding risks of the plans. Estimated returns on
assets are determined based on the asset allocation and are reviewed periodically. A temporary deviation from policy targets
is allowed.
Cash as well as most equity and debt securities have a quoted market price in an active market (Level 1 of fair value hierarchy).
Other assets including real estate and other investments do not have a quoted market price (Level 3 of fair value hierarchy).
24.7 Actuarial assumptions
The main actuarial assumptions used in the actuarial calculations include:2023/242022/23

Discount rate

1.40%

2.10%

Salary increases

1.00%

1.00%

Interest credit rates

1.50%

1.50%

In %

The present value of the defined benefit obligation is determined annually by independent actuaries using the projected unit
credit method. Actuarial assumptions are required for this purpose.

81

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Sensitivities of significant actuarial assumptions
The sensitivity analysis is based on reasonable possible changes as of the end of the year 2023/24. Each change in a significant assumption was analyzed separately as part of the test.
The sensitivity of the DBO to changes in the main actuarial assumptions is as follows:				
2023/242022/23

Increase by 0.25%(1,787)(1,520)Decrease by 0.25%

1,905

1,616

DBO increase / DBO (decrease) – In CHF thousands

Discount rate

Salary increase rate
Increase by 0.25%

522

448

Decrease by 0.25%

(527)

(458)

24.8 Maturity structure of pension obligation
The following main cash outflows are expected in future periods:
2023/24
In CHF thousandsin 1 year

1,915

in 2 years

2,192

in 3 years

1,831

in 4 years

2,675

in 5 years

2,300

in 6 to 10 years

16,38324.9 Contingent liabilities
The Group is from time to time impacted by changing political, legislative, fiscal and regulatory environments, including thoserelating to environmental protection. The frequency and effects on future operations and earnings are unpredictable and are
only partly covered by insurance policies. For the years 2022/23 and 2023/24, there is no material contingent liability from a
consolidated point of view.

LEM Annual Report 23 | 2482

Notes to the consolidated
financial statements

25. Financial risk management objectives and policies
The Group classifies its financial assets and liabilities in the following categories as per IFRS 7:
Financial assets

In CHF thousands

31.3.2024
Book value

31.3.2023
Book value

Amortized
cost

Cash and cash equivalents

23,71021,775

X

Accounts receivable

76,12586,458X

Derivative financial instruments – current
Other current financial assets
Other non-current financial assets
Total

42
1

At fair value
through
profit and
loss

X

2

X

3,029

664

X

102,864

108,941

Financial liabilities

In CHF thousands

31.3.2024
Book value

31.3.2023
Book value

Other financial liabilities

Accounts payable

28,352

36,071

X

Accrued expenses

31,95232,296

X

38,414

X

9,550

5,175

X

128,019

111,956

Derivative financial instruments - current
Other current financial liabilities
Other non-current financial liabilities
Total

890
57,275

At fair value
through
profit andloss

XBook values approximate fair values except for derivative financial instruments which are disclosed at fair value. Fair value ofthe lease is amounting to CHF 34,386 thousand in 2023/24 (CHF 37,241 thousand in 2022/23).

83

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Changes in liabilities arising from financing activities

Cash impact

1.4.2022

Cash flows
Inflow

Cash flows(Outflow)

Non-cash
impactFair valuechanges andOthers

31.3.2023

In CHF thousands

Interest-bearing loans and borrowings

40,650141,745(138,590)(216)

43,589Total

40,650141,745(138,590)(216)

43,589Cash impact

1.4.2023

Cash flows
Inflow

Cash flows(Outflow)

Non-cash
impactFair valuechanges andOthers

31.3.2024

In CHF thousands

Interest-bearing loans and borrowings

43,589128,418(104,750)(432)

66,825

Total

43,589128,418(104,750)(432)

66,825

Management assessed that fair value levels of all financial assets and liabilities approximate their book value. The Group enters
into derivative transactions such as forward contracts to hedge USD and EUR risks.
The purpose of these currency hedges is to manage the currency risks arising from the Group’s operations.
It is the Group’s policy that no derivatives for speculative purposes shall be entered into. The main risks arising from the Group’s
financial instruments are foreign currency risks and credit risks whereas the others are of minor or no impact. The Board of
Directors reviews and agrees policies for managing each of those risks.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation method:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.,
as prices) or indirectly (i.e., derived from prices).
Level 3: methods which use inputs which have a significant effect on the recorded fair value that are not based on observable
market data.
The Group’s net financial assets at fair value amount to CHF 890,000 per 31 March 2024 (net financial assets of CHF 42 thousand per 31 March 2023), all classified under Level 2.
During the two last reporting periods, there were no transfers between Level 1 and Level 2 fair value measurements, and notransfers into and out of Level 3 fair value measurements.

LEM Annual Report 23 | 2484

Notes to the consolidated
financial statements

Foreign currency risk
The Group operates globally and is exposed to various foreign exchange risks primarily to the USD, EUR, JPY, CNY and GBP. The
Group generally seeks to reduce these risks by optimizing its natural hedging strategy (cash inflows and outflows in a specificcurrency should be balanced as far as possible).
The Group’s policy states that 100% of LEM’s net exposure for the main currencies EUR, USD and JPY is to be hedged on arolling 12-month basis.
Currency risks also arise from translation differences that are not hedged by the Group when preparing the consolidated financial statements in CHF. The foreign exchange translation is excluded from the calculation of the sensitivity analysis for currency
risk below.
Sensitivity analysis for currency risk
The sensitivity analysis is performed per 31 March 2024 with a 5% change in the USD, EUR, JPY, CNY and GBP, with all othervariables held constant of the Group’s profit before tax (due to the changes in the fair value of the monetary assets and liabilities) and the Group’s equity.
The sensitivity analysis performed for the financial year shows an impact of CHF ±1,179 thousand for a ±5% EUR rate change(CHF ±979 thousand per 31 March 2023), of CHF ±720 thousand for a ±5% USD rate change (CHF ±575 thousand per 31 March
2023), of CHF ±1,181 thousand for a ±5% CNY rate change (CHF ±1,608 thousand per 31 March 2023) and of CHF ±140 thousand for a ±5% JPY rate change (CHF ±249 thousand per 31 March 2023). For other currencies, there is no significant impact.
There is no significant impact on the Group’s equity.
Credit risk
Credit risk is the risk that a financial loss occurs if a counterparty is unable or unwilling to fulfill its contractual payment obligation. The Group trades with recognized and creditworthy parties. Accounts receivables are monitored on a monthly basis.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In caseof a deterioration of the credit history, advance payments are required.
The Group’s exposure to bad debts is not significant. The maximum exposure is the carrying amount as disclosed in note 5.
There are no significant concentrations of credit risk within the Group.
With respect to credit risk arising from the other financial assets in the Group which comprises cash and cash equivalents,
other current assets and certain derivative instruments, the Group’s exposure to credit risks arises from a potential default of
the counterparty, with a maximum exposure equal to the carrying amount of these positions.

85

LEM Annual Report 23 | 24

Notes to the consolidated
financial statements

Liquidity risk
The Group operates through a cash-pooling agreement in which cash targets are set for all the subsidiaries. Cash surplus /shortages are balanced in intercompany loans on a monthly basis.
Group capital requirements are managed centrally by corporate finance. In case liquidity is required, bank loans are either taken
up centrally and passed on as an intercompany loan, or provided directly by the bank to the subsidiary with a reduction of theGroup’s total credit line. The total leverage of the Group is low, the financial liabilities mature in less than one year based on the
carrying value of borrowings reflected in the financial statements.

31.3.2024
Book valueLess than
one yearOver oneyear

31.3.2023
Book valueLess than
one yearOver one
year

9,550

5,175

In CHF thousands

Debt

66,82557,27543,58938,414

Accounts payable

28,35228,352

36,071

36,071Other current liabilities

34,74835,73435,39936,557– of which lease liabilities1

2,796

3,781

3,103

4,261

– of which derivative financial instruments00Other non-current liabilities

26,03530,60426,930– of which lease liabilities1

26,03530,60426,930Total Financial liabilities

155,960

40,154

141,989

121,361

32,98032,980111,042

38,155

1 Whereas net book values are net present values, future liabilities are disclosed as undiscounted.

The Group’s exposure to the risk of changes in market interest rates with the current financial leverage is low. As of 31 March
2024, the bank credit line amounts to CHF 57.3 million.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a healthy and stable equity ratio in order to secure the confidence of shareholders and investors, creditors and other market players and to strengthen the future
development of the Group’s business activities. The Group manages its capital structure and makes adjustments if required byeconomic conditions. LEM targets a payout ratio significantly above 50% of the consolidated net profit for the year. However,it may diverge from this policy due to economic prospects or on the grounds of planned future investment activities.

LEM Annual Report 23 | 24

86Notes to the consolidated
financial statements

26.

Scope of consolidation

Full consolidation

Country

Currency

Share capital

Ownership

EuropeLEM Europe GmbHGermany

EUR

75,000100%

LEM HOLDING SA

Switzerland

CHF

570,000

100%

LEM International SA

Switzerland

CHF

100,000

100%

LEM Management Services SARL

Switzerland

CHF

20,000100%

LEM Tech France SAS

FranceEUR

50,000100%

LEM Bulgaria EOOD

Bulgaria

BGN

1,971,000

100%

LEM Russia Ltd

RussiaRUB

16,400,000

100%

USA

USD

150,000

100 %LEM Electronics (China) Co. Ltd

China

CNY

204,495,594

100%

LEM Japan KK

Japan

JPY

16,000,000

100%

Malaysia

MYR

15,000,000

100%

North America
LEM USA Inc.
Asia

LEM Malaysia SDN, BHD

27. Changes in scope of consolidation
As announced last year, LEM Russia Ltd has terminated its operation in Russia. There are no other changes in scope.

28. Events after the balance sheet date
There were no events subsequent to the balance sheet date that require adjustment to or disclosure in the financial statements.

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LEM Annual Report 23 | 24

Auditor’s report

Report on the audit of the consolidated financial statements
OpinionWe have audited the consolidated financial statements of LEM Holding SA and its subsidiaries (the Group), which comprise theconsolidated statement of financial position as at 31 March 2024, the consolidated statement of income, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Groupas at 31 March 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with IFRS Accounting Standards and comply with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISA) and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor's responsibilities
for the audit of the consolidated financial statements” section of our report. We are independent of the Group in accordancewith the provisions of Swiss law, together with the requirements of the Swiss audit profession, as well as those of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with theserequirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
For the matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the “Auditor's responsibilities for the audit of the consolidated financial statements” section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements.
The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our
audit opinion on the consolidated financial statements.

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Auditor’s report

Recoverability of deferred tax assets
Risk
At 31 March 2024, the Group disclosed CHF 50m of deferred tax assets in Note 21 to the consolidated financial statements (CHF
48m at 31 March 2023).
The deferred tax assets were recognized and relate mainly to timing difference of the technical IP sale from LIP to LIN andusufruct sale from LHO to LIN . The analysis of the recoverability of the deferred tax assets was significant to our audit because
the amounts are material, the assessment process is complex and judgmental and is based on assumptions that are affectedby expected future market or economic conditions.
Our audit response
Our procedures included, amongst others:– We have audited the tax provision and the related business tax risks.
– We also involved our internal tax experts to assess the recoverability of the asset as well as inputs into the model such as
tax rate.
– We analyzed the offsetting and presentation of deferred tax positions.
– We audited the current year tax provision, the Company’s reconciliation of book to taxable income, as well as the deferred
tax balances and evaluated whether the assumptions applied by management on the recoverability of deferred tax assets
are consistent with its budget and forecasts.
Our audit procedures did not lead to any material reservations regarding the recoverability of the deferred tax assets.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in theannual report, but does not include the consolidated financial statements, the stand-alone financial statements, the compensation report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.

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LEM Annual Report 23 | 24

Auditor’s report

Board of Directors’ responsibilities for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial statements, which give a true and fairview in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such internal control as the Boardof Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basisof accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISA and
SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located on EXPERTsuisse’s
website at: https://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

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Auditor’s report

Report on other legal and regulatory requirements
In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has
been designed for the preparation of the consolidated financial statements according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.

Geneva, 23 May 2024
Ernst & Young Ltd
				Daniel Zaugg				Didier Lequin
Licensed audit expert			
Licensed audit expert(Auditor in charge)

91

LEM Annual Report 23 | 24

Financial Reportof LEM HOLDINGSALEM Annual Report 23 | 2492

Balance sheet(before distribution of earnings)

AssetsNotes

31.3.2024

31.3.2023

5,526

704

4

131,698

133,774

2,441

3,027

In CHF thousands

Current assets
Cash and cash equivalents
Loans to affiliated companies
Current assets from affiliated companies
Other current assets

414

288

Total current assets

140,079

137,793

237,050

Non-current assets
Loans to affiliated companies NC

4215,050

Investments in affiliated companies

1

43,09038,286

Total non-current assets

258,140

275,336

Total assets

398,219

413,130

31.3.2024

31.3.2023

52,50038,000Liabilities and equity
Notes
In CHF thousands

Current liabilities
Current financial liabilities
Loans from affiliated companies

57

Current liabilities from affiliated companies

92

97

Other current liabilities

3,211

1,788

Total current liabilities

55,80339,942570

570

EquityShare capital2

Legal reserves
Free reserves– balance carried forward– profit for the year

285

285

314,147

339,453

29,40233,948(1,988)(1,069)Total equity

342,416

373,188

Total liabilities and equity

398,219

413,130

Treasury shares

3

93

LEM Annual Report 23 | 24

Income statement

IncomeNotes

2023/242022/23

In CHF thousands

Dividend from affiliated companies

5Interest income from affiliated companies

22,401

30,778

11,672

7,423
1,268

Foreign exchange gain

6

1,412

Other financial income

1

3,991

149

Other income from affiliated companies

1,868

2,818

Total income

41,34442,4352023/242022/23(4,848)(5,279)

(593)

(444)

ExpenseNotes
In CHF thousands

Administration and other expenses
Participations’ impairment

1

Financial expense
Foreign exchange loss

6

Total expense
Profit before tax
Income taxes

7

Net profit for the year

LEM Annual Report 23 | 24

94

(1,685)(752)(3,432)(1,807)(10,558)(8,283)30,78634,153(1,383)(204)

29,40333,948

Notes to thefinancial statements

Principles for the establishment of the financial statements
The accompanying financial statements have been prepared in accordance with the requirements of the Swiss Code of Obligations. In agreement with the Article 961d of the Code of Obligations, the Company does not present the additional informationin the notes to the annual accounts, the cash flow statement and the management report.
Due to rounding, numbers presented throughout this report may not add up precisely to the totals provided. All ratios andvariances are calculated using the underlying amount rather than the presented rounded amount.
LEM HOLDING SA does and did not have any employees.
Financial income and expenses
Current assets and current liabilities denominated in foreign currencies are converted at year-end exchange rates. Realizedexchange gains and losses, and all unrealized exchange losses arising from these as well as those from business transactions,are recorded net as financial income or financial expenses.
Derivative financial instruments
Derivative financial instruments are used for hedging purposes. These instruments are valued at fair value.
Cash and cash equivalents
Cash and cash equivalents are bank accounts and short-term deposits, highly liquid and readily convertible to known amountsof cash with maturities of three months or less from the date of acquisition.
Financial assets
Financial assets are valued at acquisition cost less adjustments for foreign currency losses and any other impairment of value.
Financial investments
Financial investments are initially recognized at cost. Investments in LEM HOLDING SA subsidiaries are assessed annually andin case of an impairment adjusted to their recoverable amount.
Treasury shares
Treasury shares are recognized at acquisition cost and deducted from equity. Gains and losses on the sale are recognized in
the statement of income.

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LEM Annual Report 23 | 24

Notes to thefinancial statements

1.

Investments in affiliated companies
31.3.2024

31.3.2023

In CHF thousands

Historical cost minus impairment

43,09038,286

Total

43,09038,286The CHF 4,804 thousand increase in participations is explained by:– CHF 1,723 thousand on capital increase in LEM Malaysia;– CHF 3,081 thousand for corrections of participations previously impaired (mostly LEM Europe and LEM USA, following theirvalue increase).
For more detail about participation, please refer to note 26 of the consolidated financial statements.

2.

Share capital

Opening capital at 1 April 2023

Number of shares

Par value pershare in CHF

Capital in CHF
thousands

1,140,000

0.50

570

0.50

570

Change of capital0

Closing capital at 31 March 2024

3.

01,140,000

Treasury shares
Price per share in CHF
NumberHigh

Average

Low

Value in CHF
thousands

In number of shares, in CHF

Value at 1 April 2022

449

Purchases at cost

3,986

2,401.82

1,863.23

1,392.29

7,427(3,880)2,438.18

1,890.66

1,439.90(7,336)2,263.75

1,939.04

1,575.00

8,666(3,945)2,280.00

1,952.28

1,576.00(7,702)(21)

2,099.65

2,099.65

2,099.65

Sales at cost
Value at 31 March 2023
Purchases at cost

555
4,469

Sales at cost
Granted to employees at cost
Value at 31 March 2024

977

1,069

1,058

(44)
1,988

Subsidiaries of LEM HOLDING SA did not own any shares of LEM HOLDING SA.
Treasury shares are valued at the lower of cost or market value.

4.
Loans to affiliated companies
On 31 March 2024, LEM HOLDING SA has notably a loan of CHF 237 million towards LEM International SA, coming from the IP
sold to LEM International SA in 2019. This loan is refunded every year for an amount of CHF 22 million. It is disclosed as follows
in the balance sheet as of 31 March 2024:– Current loans, for CHF 22 million;– Non-current loans, for CHF 215 million.

LEM Annual Report 23 | 24

96

Notes to thefinancial statements

5.

Dividend from affiliated companies

In financial year 2023/24, the dividend income amounts to CHF 22 million coming mostly from LEM China (CHF 15 million).

6.

Exchange effect2023/242022/23(1,237)(803)

In CHF thousands

Exchange gains/(losses)
Fair value revaluation on derivatives 1

(932)

18

148

246

(2,021)(539)

2023/242022/23(1,384)(737)

Gains/(losses) on derivatives 1
Exchange effect
1 Position includes cost of derivative hedging

7.

Income taxes

In CHF thousands

Current taxes
Adjustments of tax provisions of previous periods
Total

1

533*

(1,383)(204)

31.3.2024

31.3.2023

185

1,627

* From previous years due to liquidation of LEM Intellectual Property SA

8.

Guarantees in favor of third parties on behalf of subsidiaries

In CHF thousands

Amount of guarantees issued

The lease guarantee of LEM former Headquarters (Plan-les-Ouates) was cancelled, following the move to Meyrin.

9.

Shareholdings

Significant shareholders
On 31 March 2024, the following shareholders held 3% or more of the share capital and voting rights:
31.3.2024

31.3.2023

SharesIn %SharesIn %Werner O. Weber and Ueli Wampfler, in Zollikon/Wollerau, Switzerland,through WEMACO Invest AG and Voltano AG in Cham, Switzerland

599,13952.6%

592,500

52.0%

J. Safra Sarasin Investmentfonds AG, Basel, Switzerland

34,550

3.0%

n.a.

<3%

n.a.

3%–5%1n.a.

3%–5%1

In number of shares, percent of shareholding

Capital Group Companies Ltd., Los Angeles, USA

1 Capital Group disclosed a 3.02% stake as of 31 August 2020, but did not report the exact number of LEM shares per 31 March 2023 and 31 March 2024

97

LEM Annual Report 23 | 24

Notes to thefinancial statements

Shareholdings of non-executive directors
31.3.2024
Number of shares
held

31.3.2023
Number of shares
held

Andreas Hürlimann

1,001

1,001

François Gabella

600

600

Ilan Cohen

300

300

76,65075,500Ulrich Jakob Looser

350

350

Werner C. Weber0078,90177,751

Ueli Wampfler

Total

Shareholdings of Executive Management

31.3.2024

31.3.2023

Number of shares
held

Number of shares
heldFrank Rehfeld, CEO

29

20

Executive management (excl. CEO)

0

0

Total

29

20

Starting with financial year 2022/23, participants to the LTI plans are granted an individual LTI amount in CHF at the beginning of each three-year plan cycle, which corresponds to the grant date. This amount is converted into PSUs based on
a reference price (10-day average share price prior to grant date). At the end of the plan cycle, PSUs vest in LEM shares,
whereas the number of shares obtained per PSU can vary between 0% and 200% of the award, depending on the achievement of pre-defined performance and service conditions. Each year, a new plan is setup, with new PSU allocated, as below:
Plan Cycle 2023/24
to 2025/26

Plan Cycle 2022/23
to 2024/25

Frank Rehfeld, CEO

210

265

Executive management (excl. CEO)

368

290

Total

578

555

31.3.2024

31.3.2023

Balance brought forward from previous year

313,013

338,436of which treasury shares from previous year

(1,069)(977)

Number of PSU allocatedProposed appropriation of available earnings
In CHF thousands

Variation of treasury shares

(920)

(91)

Net profit for the year

29,40333,948

Total available earnings

341,496372,293

Ordinary dividend(57,000)(59,280)

Balance to be carried forward

284,496

313,013

Proposal of the Board of Directors

The Board of Directors proposes the distribution of an ordinary dividend of CHF 50 per share. Net of 35% withholding tax, thisis an ordinary cash dividend of CHF 32.5 per share.
The proposed appropriation of available earnings is made in compliance with Article 671 of the Code of Obligations.
Shares held by LEM HOLDING SA or any of its subsidiaries are not entitled to dividends.
LEM Annual Report 23 | 24

98

Auditor’s report

Report on the audit of the financial statements
OpinionWe have audited the financial statements of LEM Holding SA (the Company), which comprise the statement of financial position
as at 31 March 2024 and the statement of income for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements comply with Swiss law and the Company’s articles of incorporation.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities underthose provisions and standards are further described in the “Auditor's responsibilities for the audit of the financial statements”
section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirementsof the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. We have determined that there are no key audit matters to communicate in our report.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in theannual report, but does not include the consolidated financial statements, the stand-alone financial statements, the compensation report and our auditor’s reports thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.

99

LEM Annual Report 23 | 24

Auditor’s report

Board of Directors’ responsibilities for the financial statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swisslaw and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue asa going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse’s website at:https://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

Report on other legal and regulatory requirements
In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has
been designed for the preparation of the financial statements according to the instructions of the Board of Directors.
Furthermore, we 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.

Geneva, 23 May 2024
Ernst & Young Ltd
				Daniel Zaugg				Didier Lequin
Licensed audit expert			
Licensed audit expert(Auditor in charge)

LEM Annual Report 23 | 24100

Group subsidiaries

LEM is a global player with production plants and development centers in Beijing (China), Geneva (Switzerland), Tokyo (Japan),Peneng (Malaysia) and Sofia (Bulgaria). The Company has a dedicated R&D Center in Lyon (France) and sales offices at all its
customers’ locations and offers seamless service around the globe.
For a complete list of subsidiaries and offices, refer to www.lem.com > About LEM > Our Locations

EuropeLEM HOLDING SA
Route du Nant-d’Avril 152
CH–1217 Meyrin
LEM International SA
Route du Nant-d’Avril 152
CH–1217 Meyrin
LEM Management Services Sàrl
Route du Nant-d’Avril 152
CH–1217 Meyrin
LEM Tech France SAS
Les Allées du Parc
Allée des Parcs 575/655
F–69800 Saint-Priest
LEM Europe GmbH
Frankfurter Straße 74
D–64521 Groß-Gerau
LEM Europe GmbH,
Branch Austria
Concorde Business Park 2/F/6
A–2320 Schwechat

Asia
LEM Europe GmbH,
Branch Belgium
Egelantierlaan 2
B–1851 Humbeek
LEM Europe Denmark,Filial af LEM Europe GmbH
Haraldsvej 60A’1.
DK–8960 Randers
LEM Europe GmbH,
Succursale France
29 rue d’Estienne d’Orves
F-92120 Montrouge
LEM Europe GmbH,
Succursale Italia
Via V. Bellini 7
I–35030 Selvazzano Dentro, PD
LEM Europe GmbH,
Branch UK
Suite 10 West Lancs Investment
Centre Mapleview
Whitemoss Business Park
UK-Skelmersdale WN8 9TG
LEM Bulgaria EOOD
Iliensko Shosse 8
BG–1220 Sofia
LEM Russia, LLC
Staritskoe Shosse 15
RU–170040 Tver

LEM Electronics (China) Co. Ltd
Linhe Street 28, Shunyi District
CN–101300 Beijing
LEM Japan KK
2–1–2 Nakamachi
JP-Machida, 194–0021 Tokyo
LEM Management Services Sàrl,
Branch India
Level 2, Connaught Place
Bund Garden Road
IN–411 001 Pune
LEM Management Services Sàrl,
Branch Korea
Seocho-Dong
Wonil Bldg.1–3F (311) 10
Nambushuhwan-Ro 333-Gil
Seocho-Gu
KR-Seoul
LEM Management Services Sàrl,
Branch Taiwan
7F., No. 342, Wenlin Road
Shilindistrict
TWN–11163 Taipe
LEM Malaysia Sdn Bhd
Plot P22E, Jalan PSPN 3, Mukim 13,
Penang Science Park North, Bukit
Minyak
MY-Penang, 14100

North America
LEM U.S.A., Inc.
11665 West Bradley Road
USA-Milwaukee, WI 53224

101

LEM Annual Report 23 | 24

Copyright© LEM HOLDING SA,
GenevaConcept and text
LEM HOLDING SA, Geneva
Dynamics Group, Zurich
DesignProcess AG, Zurich
PhotosMara Truog, Zurich
Getty Images
Printing
Druckprodukt, Zurich eading the world in electricalLmeasurement, LEM engineers
the best solutions for energy
and mobility, ensuring that ourcustomers’ systems are
optimized, reliable, and safe.

LEM HOLDING SA
Route du Nant-d’Avril 1521217 Meyrin
Geneva, Switzerland
www.lem.com