Half Year Report
2015/16
At the heart of power electronics

Business Report
Dear Shareholders,After a slowdown in Q4 of financial year 2014/15 and Q1 of 2015/16, our business regained momentum in Q2 of 2015/16. We
report stable sales for the first half of 2015/16. The strength of the Swiss franc versus most other currencies weighed on sales
and margins. In addition, competitive pressure and therefore price pressure remained intense.
Robust development in China is a growth driver for LEM. Here we recorded progress in the increasingly important renewableenergies, green cars and traction businesses. This sustained performance is the result of our products' technology and quality,
and linked to strong presence with local production as well as customer service. We observed a recovery in Europe and North
America, supported by a steadier economic environment. Several ongoing design-in projects underline solid interest in our new
products.
Our sales increased by 0.1% to CHF 131.6 million in the first half of 2015/16; at constant exchange rates, they increased by 3.4%.
Bookings for the first six months totaled CHF 126.9 million, up 0.2% on the same period of 2014/15. The book-to-bill ratio
remained stable at 0.96 illustrating our customers' uncertainty about their own perspectives.
Our gross margin stands at 45.5%, down from 46.3% in the first half of 2014/15, while EBIT reached 24.9 million, a decrease of
16.0% on the first half of 2014/15. Our EBIT margin for the first six months of 2015/16 was 18.9%, compared with 22.5% a year
earlier. Currency effects, as well as one-off costs arising from the introduction of our new ERP system and from organizationalchanges, affected our operational result.
Net profit came in at CHF 19.8 million, a decrease of 7.8% compared with the first half of 2014/15.
Our balance sheet remains strong. As of 30 September 2015, total assets stood at CHF 156.8 million. Shareholders' equity
reached CHF 62.6 million (CHF 91.9 million as of 31 March 2015, CHF 73.8 million as of 30 September 2014), representing anequity ratio of 40.0% (65.0% as of 31 March 2015, 52.7% as of 30 September 2014).
Industry segment – importance of Chinese markets
First-half sales in the Industry segment totaled CHF 110.3 million, down 2.9% on the same period a year earlier. At constantexchange rates, sales increased by 1.5%. Seasonal effects in the renewable energies business and continued growth in China
supported our sales development. After a slow start into the financial year, activities in Europe and North America picked up
across all businesses. We started several design-in projects with our newly launched product families, which will help us tofurther increase production output. We stepped up production of our solar product families. First-half EBIT decreased by 21.5%,
from CHF 27.0 million in 2014/15 to CHF 21.2 million in 2015/16, mainly resulting from currency effects and price pressure. Sales
growth was strongest in China (+13%). North America recovered (+6%) but our sales performance in Europe (–9%) and Asia
excluding China (–18%) was slow. Asia remains the most important region with 47% of sales; China, with 32% of sales, is the
single most important country.
–– Sales in the drives & welding business slowed by 9% compared with the first half of 2014/15. Lower machine constructionin China, because of lower industrial activity in China and worldwide, slowed our sales in most regions. LEM maintained its
market share.
–– Sales in renewable energies & power supplies business increased by 8% on the first six months of 2014/15. High investments
in solar and wind farms led to continued growth in China and India. In Japan, however, subsidies expired, which caused a
sharp decline. We achieved stabilization in North America and market share wins in Europe.
–– The traction business stabilized after a period of strong growth. The favorable trend in China continued thanks to Chinese rail
companies winning market share at home and abroad. Infrastructure investments in Europe remained subdued. Sales decreased
by 7%.
–– We recorded a positive trend in the high-precision business with sales growth of 6%. Seasonality in the test & measurement
market in Asia and North America as well as good HVDC business in China contributed to the positive result.
Automotive segment – growth in all regions
Sales in the Automotive segment reached CHF 21.3 million, up 18.5% on the same period in 2014/15. At constant exchange
rates, they increased by 15.3%. After a slow start into the year, sales picked up in the second quarter with an increase of 25.6%
on the first quarter of 2015/16. We improved our EBIT margin in the first half of 2015/16 thanks to volume growth, the currency
situation (stronger USD) and a favorable product mix. Half-year EBIT jumped to CHF 3.7 million compared with CHF 2.6 million
in the first half of 2014/15.
–– In the conventional cars business, sales increased by 14%. We grew in line with the market and kept our market share. We
took advantage from the strong growth in US vehicle production.

LEM | Half Year Report 2015/16

2

–– Sales in the green cars business jumped by 39% on the previous year. We benefitted from government support for green cars
in China. We won new projects with Chinese car manufacturers, and started new hybrid car projects in the US. We identified
promising business opportunities with US and Korean manufacturers for our new product families.
Executing our strategy–– Increase our technology leadership
We closely monitor the global market and technology trends, and adapt our product road map to emerging technologies andcustomer requirements. We keep launching a high number of new products that offer better performance and new functions
at lower costs to our customers. Our customers are encouraging us to launch such products faster than originally planned
and increasingly ask for support during the feasibility studies of their new platforms. Investment in R&D remains within thelong-term average of 5.5% of sales, amounting to CHF 7.2 million.
So far this financial year, we launched one new product for drives, renewable energies and traction applications. The LF 2010
models use a proprietary ASIC for closed loop Hall Effect technology and deliver a performance that matches the more
complex fluxgate technology. In addition, we introduced at least 15 derivatives of recently launched products, which arecustom-built for specific customer applications. We have secured six patents.
At LEM Bulgaria, we introduced a local development team. In a first step, it will support local production, but in the long term,
we are aiming to shape it into an additional product development unit.
–– Increase our efficiency
We maintained our focus on cost management in production by reducing the number of key suppliers and by simplifying the
supply chain for project-driven products. We improved internal efficiency by growing the share of cost-effective production. Our
new production site in Bulgaria again increased its output in line with our development plan, reaching 8.5% of global output in
Q2 of 2015/16 (In comparison, our biggest production site, in China, stabilized around 63% of global output.). We have increased
the number of production lines in Sofia from nine at year-end 2014/15 to eleven at end of first half of 2015/16.
By going live with the new ERP system at the beginning of financial year 2015/16, we laid the foundation for additional efficiency
improvements through simplification and standardization of processes throughout the Group.
–– Increase our production flexibility
We maintained our delivery performance, absorbing the effects of the shortening lead times of our customers as well as theseasonal increase in solar production. The deployment of our integrated flexible supply-chain model now covers 80% of sales
and allows to increase inventory turns by 10%.
Outlook
We expect a steady economic situation in Europe and the US while the Chinese economy is set to slow. International currency
fluctuations, particularly the strong Swiss franc, will remain a challenge. We have been addressing this challenge in the regularreview of our international footprint for several years.
We anticipate normal seasonal decline in the second half of the financial year 2015/16 because of holiday season in China andthe rest of the world as well as lower solar infrastructure investments during the winter months. For the full financial year 2015/16,
we forecast sales of CHF 250–260 million; this compares with CHF 257.8 million for full-year 2014/15 (achieved in a more favorable foreign exchange environment than 2015/16). We expect our EBIT margin to be within our target range of 15% to 20%.
We thank you for your continued trust in LEM.
Yours sincerely,

Andreas Hürlimann
Chairman of the Board of Directors

François Gabella
Chief Executive Officer

LEM | Half Year Report 2015/16

3

Key Figures, Financial Calendar,
Contacts
Key figures

First half vs. first half

Second quarter vs. first quarter2015/16
In CHF millions

2014/15
In CHF millions

ChangeIn %Q2 2015/16
In CHF millions

Q1 2015/16
In CHF millions

ChangeIn %+ 8.5

Orders received

126.9

126.6

+ 0.2

66.0

60.9

Book-to-bill ratio

0.96

0.96

–

0.94

0.99

–

Sales

131.6

131.5

+ 0.1

70.0

61.5

+ 13.8Gross profit
In % of sales

59.9

60.9

– 1.7

32.2

27.7

+ 16.4

45.5%

46.3%

– 0.8 pt

46.0%

45.0%

+ 1.0 pt

EBIT
In % of sales

24.9

29.6

– 16.014.4

10.5+ 36.7

18.9%

22.5%

– 3.6 pt

20.5%

17.1%

+ 3.4 pt

10.9

8.9

+ 23.2

Net profit for the period

19.8

21.5

– 7.8

EPS basic (in CHF)

17.40

18.87

– 7.8

Operating cash flow

0.6

25.2

– 97.6

Investing cash flow

– 2.0

– 3.6

+ 45.030.9.15

31.3.15

ChangeIn %Net financial assets /­(liabilities)(26.8)

20.9–

Shareholders' equity

62.6

91.9

– 31.9Equity ratio (in % of total assets)

40.0

65.0

– 25.0 pt

Market capitalization

795

910

– 12.7

Employees (FTEs)

1'339

1'274

+5.1

Sales per segment

Regional sales breakdown

In CHF millions

In CHF millions

70

65.0

66.5

70.0
64.7

61.5

61.5

50

50

87%

86%

86%

84%

85%

48%

45%

70.0
64.7

61.5

61.5
47%

83%
30

47%

42%

16%

19%

37%

39%

50%

15%

16%

17%
17%

20

20

0

66.5

40

30

10

65.0

60

60

40

70

10
13%

14%

14%

16%

15%

17%

37%

39%

33%

36%

0

Q1 2014/15 Q2 2014/15 Q3 2014/15 Q4 2014/15 Q1 2015/16 Q2 2015/16

Q1 2014/15 Q2 2014/15 Q3 2014/15 Q4 2014/15 Q1 2015/16 Q2 2015/16

Industry segment
Automotive segment

Asia and rest of the world
North America
EuropeFinancial calendar
The financial year runs from 1 April to 31 March

16 February 2016

Third quarter results 2015/16

9 June 2016

Year-end results 2015/16

30 June 2016

Ordinary General Meeting of the
Shareholders

5 July 2016

Dividend ex-date

7 July 2016

Dividend payment date

LEM | Half Year Report 2015/16

4

Media andinvestor contact
Andrea Borla (CFO)
Phone: +41 22 706 12 50
E-mail: investor@lem.com

Address
LEM Holding SA
Avenue Beauregard 1
CH-1700 Fribourg
Phone: +41 26 460 10 30
Fax: +41 26 460 10 39
www.lem.com

Interim
Consolidated
Financial
Statements

Consolidated Statement of
Financial Position
AssetsIn CHF thousands

Notes

30.9.2015

31.3.2015

13'23520'92072'81850'126Inventories

27'742

27'545

Income tax receivable

1'368

771

Other current assets

2'140

2'338

Total current assets

117'303

101'700

5'458

4'418

Property, plant and equipment

24'59825'728Intangible assets

8'384

8'878

Other noncurrent assets

1'013

889

Total noncurrent assets

39'45339'913

Total assets

156'756

141'613Notes

30.9.2015

31.3.20155

18'55712'012Current assets
Cash and cash equivalents
Accounts receivable4

Noncurrent assets
Deferred tax assets

12

Liabilities and equity
In CHF thousands

Current liabilities
Accounts payable
Accrued expenses

17'79918'688

Income tax payable

12

5'367

10'225Current provisions

6

1'462

1'501

Current financial liabilities

7

40'055

Other current liabilities

8

Total current liabilities

2'494

466

85'73542'892

Noncurrent liabilities
Noncurrent provisions

6

1'467

1'854

Deferred tax liabilities

12

1'542

2'259

Other noncurrent liabilities

5'377

2'665

Total noncurrent liabilities

8'386

6'777

Total liabilities

94'12149'670570

570

EquityShare capital

9

Treasury shares

9

(624)

(283)

Reserves

9

10'970

12'552Retained earnings

51'71979'105

Total equity

62'63591'943

Total liabilities and equity

156'756

141'613

LEM | Half Year Report 2015/16

6

Consolidated Income Statement
April to September
In CHF thousands

Notes

2015/16

2014/15

Sales

131'567

131'497

Cost of goods sold(71'696)(70'579)

Gross margin

59'87260'918

Sales expense(13'801)(11'783)

Administration expense(14'085)(12'454)

Research & development expense(7'206)(7'414)(4)(1)

Other expense
Other income

94

332

24'87129'598Financial expense

(107)

(73)

Financial income

46

131

533

(1'879)25'34227'777

Operating profit

Exchange effect10

11

Profit before taxes
Income taxes
Net profit for the period

12(5'525)(6'287)

19'81821'491

17.40

18.87

Earnings per share, in CHF

Basic and diluted earnings per share

LEM | Half Year Report 2015/16

7

Consolidated Statement ofComprehensive Income
April to September
In CHF thousands

2015/16

2014/15

Net profit for the period recognized in the income statement

19'81821'491

Currency translation difference(1'923)

3'691

Total other comprehensive income to be reclassified
to profit and loss in subsequent periods(1'923)

3'691

Other comprehensive income to be reclassified to
profit and loss in subsequent periods

Other comprehensive income not to be reclassified
to profit and loss in subsequent periods
Remeasurement gains /­(losses) on defined benefit plans(1'458)

63

318

(14)

Total other comprehensive income not to be reclassified
to profit and loss in subsequent periods(1'140)49

Other comprehensive income /(loss) for the period, net of tax(3'063)3'740

Total comprehensive income for the period

16'75525'231Attributable to shareholders

16'75525'231

Income tax

Consolidated Statement of
Changes in Equity
Attributable to shareholders
In CHF thousands

Notes

1 April 2014

Share ­capital

Treasury shares

Capital reserve

Translation
reserve

Retained­earnings

Total equity

570

(745)

12'688(3'390)85'081

94'20321'491

21'49149

3'740

Net profit for the period
Other comprehensive
income /(loss)

3'691

Total comprehensive income

3'691

Dividends paid

9

Movement in treasury shares

9

21'540

25'231(45'568)(45'568)

(111)

111

(52)

(52)

30 September 2014

570

(856)

12'799301

61'00073'814

1 April 2015

570

(283)

12'226326

79'10591'943

Net profit for the period
Other comprehensive
income /(loss)(1'923)

Total comprehensive income(1'923)

Dividends paid

9

Movement in treasury shares

930 September 2015

LEM | Half Year Report 2015/16

570

8

(341)

341

(624)

12'567(1'597)

19'81819'818(1'140)(3'063)18'67816'755(45'547)(45'547)

(516)

(516)

51'71962'635

Consolidated Cash Flow Statement
April to September
In CHF thousands

Notes

2015/16

2014/15

Profit before taxes

25'34227'777

Adjustment for noncash items and taxes paid

(4'751)

4'025

Cash flow before changes in net working capital

20'59131'802

Cash flow from changes in net working capital(19'994)(6'614)597

25'188(2'306)(2'364)

Investment in intangible assets(349)(1'219)

Increase (–) /decrease (+) in other assets

673

(25)

(1'982)(3'607)

Cash flow from operating activities

Cash flow from operating activities
Cash flow from investing activities
Investment in fixed assets

Cash flow from investing activities
Cash flow from financing activities
Treasury shares acquired (–) /divested (+)

9

(516)

(52)

Dividends paid to the shareholders of LEM Holding SA

9(45'547)(45'568)

Increase (+) /decrease (–) in financial liabilities

7

40'000

12'000Cash flow from financing activities(6'063)(33'620)

Change in cash and cash equivalents(7'448)(12'039)

Cash and cash equivalents at the beginning of the period

20'920

24'581(237)

758

13'23513'300Exchange effect on cash and cash equivalents
Cash and cash equivalents at the end of the period

LEM | Half Year Report 2015/16

9

Notes to the Interim Consolidated
Financial Statements
1 General information
LEM Group is a market leader in providing innovative and high quality solutions for measuring electrical parameters. Its coreproducts – current and voltage transducers – are used in a broad range of applications in drives & welding, renewable energies &power supplies, traction, high-precision, conventional and green cars businesses.
2 Significant accounting principles
These unaudited consolidated financial statements for the six months ended on 30 September 2015 have been prepared inaccordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”. They do not include all the information and disclosures presented in the annual consolidated financial statements and should therefore be read in conjunction withthose for the year ended 31 March 2015.
The accounting and valuation policies are consistent with those applied in preparing the annual consolidated financial statements for the year 2014/15.
The preparation of the interim consolidated financial statements in conformity with IFRS requires management to make estimatesand assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and related disclosures at thedate of the interim financial statements. These estimates are based on management's best knowledge of current events andactions that the Group may undertake in the future. However, actual results could differ from those estimates.
In accordance with IAS 1 “Presentation of Financial Statements”, the financial information is presented in thousands of CHF. The
totals are calculated with the original unit amounts, which could lead to rounding differences. These differences in thousands ofunits are not changed in order to keep the accuracy of the original data.
In 2015/16, LEM Group introduced the following revised standards and interpretations:Standard or­i nterpretation

Title

ImpactEffective date

Amendments

Annual improvements to IFRS – 2011–2013 cycle

None

1 July 2014

Amendments

Annual improvements to IFRS – 2010 –2012 cycle

None

1 July 2014

The new and revised standards do not have a material effect on the consolidated financial statements of LEM Group.
The following table summarizes the principal exchange rates that have been used in the translation process.
Period-end rate for balance sheet
30.9.2015

31.3.2015

Period average rate for income statement

Var. in %2015/16

2014/15

Var. in %

BGN

0.558

0.535

+ 4.3%

0.539

0.622

CNY

0.153

0.158

– 3.2%

0.154

0.146

– 13.3%+ 5.5%

DKK

0.146

0.140

+ 4.3%

0.141

0.163

– 13.5%

EUR

1.092

1.046

+ 4.4%

1.055

1.216

– 13.2%

GBP

1.475

1.437

+ 2.6%

1.467

1.511

– 2.9%

JPY

0.00810.0081+ 0.0%

0.00780.0088– 11.4%

RUB

0.015

0.017

– 11.8%

0.017

0.025

– 32.0%

USD

0.973

0.971

+ 0.2%

0.952

0.901

+ 5.7%

LEM | Half Year Report 2015/16

10

3 Segment information
April to September 2015
In CHF thousands

April to September 2014
Industry

Automotive

LEM Group

In CHF thousands

Sales

110'295

21'273131'567

Operating profit

21'213

3'658

24'871

Industry

Automotive

LEM Group

Sales

113'552

17'945131'497

Operating profit

27'016

2'581

29'5984 Accounts receivable
The increase of accounts receivable is due to the high level of sales in Q2 of 2015/16, the effects of the implementation of
the new ERP and the change of the European logistics organization. Allowance principles have been applied consistently.
Management expects to reduce accounts receivable as a result of the initiated collection efforts.
5 Accounts payable
After the decrease of accounts payable in Q4 of 2014/15 as a consequence of early settlement of payables in view of the go-liveof the new ERP on 1 April 2015 the present balance on 30 September 2015 is back on a consistent level.
6 Current and noncurrent provisions
Warranty and customer claims
Provisions for warranty and customer claims cover expected warranty claims which are not covered by insurances. The provisions 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 consumption taxes
Despite the care that LEM applies in the separation process with personnel, such separation may result in legal conflicts. The
Group will defend its case and management estimates the reasonable risk to be provided for.
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 tocomplex transactions. The Group periodically reassesses its tax positions. Changes to the financial statement recognition,measurement, and disclosure of tax positions are based on management's best judgment given any changes in the facts,
circumstances, information available and applicable tax laws.
Per 30 September 2015, the decrease of provisions compared to 31 March 2015 is mainly linked to the evolution of warranty
and customer claims provisions.
7 Current financial liabilities
LEM Group increases financial short-term liabilities to CHF 40.0 million (CHF 0.0 million at 31 March 2015) via short-term credit
lines in order to finance the CHF 45.5 million dividend payment of July 2015.
8 Other current liabilities
Other current liabilities increase is primarily due to the change in the fair value of the derivatives in relation with foreign exchange
hedging.

LEM | Half Year Report 2015/16

11

9 Equity
At the shareholders' meeting held in Fribourg on 25 June 2015, the shareholders approved the distribution of an ordinary dividend of CHF 40.00 per share resulting in an estimated payout of CHF 45'585 thousand. The gross dividend effectively paid on
2 July 2015 amounted to CHF 45'547 thousand (prior year: ordinary dividend of CHF 40.00; total CHF 45'568 thousand).
In the frame of its market-making contract, LEM has acquired a net of 566 shares for a total net amount of CHF 341 thousand,generating a net charge of CHF 516 thousand in equity. At 30 September 2015, LEM owns 931 treasury shares.
In the prior year period, LEM had acquired a net of 91 shares for a total amount of CHF 111 thousand, generating a net chargeof CHF 52 thousand in equity. At 30 September 2014, LEM owned 1'175 treasury shares.
10 Operating profit
The gross margin decrease of CHF 1.05 million can be explained by the negative FX impacts on sales partly compensated withan increase of volumes and lower costs.
The increase in operating expenses contributed to the decrease in the operating profit of CHF 4.7 million. The increase in sales
and administrative expenses of CHF 3.6 million are the main drivers of the operating expenses and can mainly be explained bycosts associated with the implementation of the new ERP per 1 April 2015, the reorganization of the European logistics platform
and management reorganization.
11 Exchange effect
The foreign exchange effect is driven by the currencies' parity versus Swiss franc and the effect of hedging transactions.
Compared to the same period of the previous financial year, CNY and USD were revaluating versus CHF whereas JPY and EUR
were devaluated. In the first half of last year, CNY and USD were revaluating versus CHF whereas JPY remained fairly stable.
12 Income taxes
Income tax expense is calculated based on the best estimate of the applicable annual income tax rate expected for the full year.
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 withstand challenge
by tax authorities. Some of these positions are inherently uncertain and include those relating to transfer pricing matters and theinterpretation of income tax laws applied to complex transactions. The Company periodically reassesses its tax positions.
Changes to the financial statement recognition, measurement, and disclosure of tax positions are based on management's best
judgment given any changes in the facts, circumstances, information available and applicable tax laws. Considering all available
information and the history of resolving income tax uncertainties, the Group believes that the ultimate resolution of such matterswill 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.
The tax rate remains stable between the two periods.
13 Consolidated cash flow statement
The adjustment for noncash items increases by CHF 8.8 million compared to the same period 2014/15 and is mostly due to the
cash-out of accrued taxes.
The cash flow from changes in net working capital evolution is linked to the increase of accounts receivable lowered by anincrease of payable and decrease in inventory.
In order to finance the CHF 45.5 million dividend payment the financial liabilities were increased by CHF 40.0 million via our bankcredit lines.
The exchange effect on cash and cash equivalent is driven by the currencies' parity versus Swiss franc, as explained in note 11
Exchange effect.

LEM | Half Year Report 2015/16

12

14 Financial assets and liabilities
The group classifies its financial assets and liabilities into the following categories as per IFRS 7:
Financial assets
In CHF thousands

30.9.2015
Fair value

31.3.2015
Fair value

Loans andreceivables

Cash and cash equivalents
Accounts receivable
Derivative financial instruments – current
Other current financial assets
Other noncurrent financial assets
Total

13'23572'818034
1'013
87'100

20'92050'126342
14889
72'291X
X

In CHF thousands

30.9.2015
Fair value

31.3.2015
Fair value

Loans andreceivables

Accounts payable
Accrued expenses
Derivative financial instruments – current
Other current financial liabilities
Bank loans
Other noncurrent financial liabilities
Total

18'557
17'7991'642
1140'00030
78'03912'012
18'688027
01630'743

X
X

Financial liabilities

At fair value throughprofit and loss

X
X
X

At fair value throughprofit and loss

X
X
X
X

The management assessed that fair value level of cash and cash equivalents, accounts receivables, other current and noncurrent
assets, accounts payables, accrued expenses and other current and noncurrent liabilities that are not measured at fair value
approximate their carrying amounts in view of their short-term nature and are consequently not separately disclosed.
The Group enters into derivative transactions such as currency risk reversal and forward contracts to hedge the 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 areof 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
technique:
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: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable
market data.
The Group's financial liabilities at fair value amount to CHF 1'642 thousand per 30.9.2015 (financial asset of CHF 342 thousand
per 31.3.2015), 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 | Half Year Report 2015/16

13

15 Changes in scope of consolidation
As per 4 April 2015, LEM Deutschland GmbH changed its name to LEM Europe GmbH.
In 2014/15, the Group finalized the conversion of European entities into branches of a European head office with the absorptionof LEM France and LEM Belgium into LEM Deutschland GmbH:–– On 2 February 2015, LEM France Sàrl was merged into LEM Deutschland GmbH.
–– On 2 February 2015, LEM Belgium Sàrl was merged into LEM Deutschland GmbH.
16 Events after the balance sheet date
The Board of Directors and Senior Management are not aware of any significant events up to the date of approval of the interim
consolidated financial statements on 3 November 2015 that would require an adjustment in carrying amounts of the Group's
assets and liabilities.

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LEM Holding SA
Avenue Beauregard 1
CH-1700 Fribourg
Phone: +41 26 460 10 30
Fax: +41 26 460 10 39
www.lem.com
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