Half Year Report
2017/18
At the heart of power electronics

Business Report
Dear Shareholders,
LEM started the year 2017/18 off strong with double-digit sales
and profit growth. All but the conventional cars business contributed to this positive performance. We saw more industrial
activity, as many players stepped up their investments in automation and increased their capacities. In addition, we capitalized on our investment in the green cars business, where weleveraged our market position in the fastest-growing markets:
China, Japan and Korea. Our key challenge in the first half of2017/18, however, was to increase production capacity andflexibility in order to better meet growing demand.
Greater investment in innovation remained the top priority.
We increased our R&D team by nearly 20 % in four locations(Geneva, Lyon, Beijing and Sofia). While there were few product launches in the first half of 2017/18, we have a pipeline ofexciting product innovations and will launch several new
promising products in the second half of the year.
Financial Highlights
Our sales increased by 14.8 % to CHF 152.2 million in the firsthalf of 2017/18. At constant exchange rates, sales increased
by 15.9 %. Bookings for the first six months totaled CHF 156.8
million, up 18.5 % on the same period in 2016/17. The bookto-bill ratio improved from 1.00 to 1.03.
Our gross margin was 45.6 %, down from 46.3 % in the firsthalf of 2016/17, while EBIT reached CHF 31.9 million, an
increase of 15.9 % on the first half of 2016/17. Our EBIT margin for the first six months of 2017/18 was 20.9 %, comparedwith 20.7 % a year earlier. Volume growth and production
efficiency improvements reduced the impact of price erosion
in most markets.
Net profit came in at CHF 26.5 million, an increase of 19.7 %compared with the first half of 2016/17. Free cash flow in thefirst half of 2017/18 was CHF 6.5 million, compared with
CHF 18.5 million a year earlier. This is due to the increasesof accounts receivables (+22 %) and investments in production equipment (+84%) linked to the accelerated sales growth.
As of 30 September 2017, total assets stood at CHF 170.8
million. Following a dividend payment of CHF 39.9 million in
July 2017, equity was CHF 78.7 million (CHF 65.8 million asof 30 September 2016), representing an equity ratio of 46.1 %(43.1 % as of 30 September 2016).
Industry Segment – Growth Momentum Across
All Businesses
First-half sales in the Industry segment totaled CHF 123.7
million, up 15.6 % on the same period a year earlier. At constant exchange rates, sales increased by 16.6 %.

LEM | Half Year Report 2017/18

2

The positive economic environment provided a tailwind for
all Industry businesses. Sales grew by 28 % in China, by 13 %in Asia excluding China and by 12 % in Europe. Sales performance in North America was mixed (– 2 %) due to strong
drives business but waning renewables business in the US.
First-half EBIT increased from CHF 21.0 million in 2016/17 to
CHF 25.9 million in 2017/18.
– –Sales in the drives & welding business grew by 9 % compared with the first half of 2016/17. We achieved higher
sales in all regions, with LEM gaining some market share.
Sales growth in China was strongest. Here we identified
high demand in automation industries; this also helped theJapanese automation industry.
– –Sales in the renewable energies & power supplies businessincreased by 25 % on the first six months of 2016/17.
Growth was driven by continuing demand from solar energy
in China and Europe. Overall, we won market share.
– –Some short-term projects supported our traction business,
which grew by 23 %. We achieved strong sales with energy
metering, trackside applications and retrofit orders in
Europe and India as well as light rail and subway projects
in China. Our market share remained stable.
– –Sales in the project-driven high-precision business wereup by 3 %. Activity in China slowed, with no repeat of last
year's HVDC projects. The test & measurement market
picked up, mainly driven by higher demand in the automotive industry. Our market share remained stable.
Automotive Segment – Green Cars Business Exceeds
Conventional Cars BusinessIn the first half of 2017/18, sales in the Automotive segment
totaled CHF 28.5 million, representing an increase of 11.3 %.
At constant exchange rates, sales increased by 13.2 %. Sales
growth was driven by the green cars business in China, Japanand Korea. Sales in our green cars business exceeded sales
in the conventional cars business for the first time in Q2
2017/18. Competition is intensifying as higher market volumes attract new players from all corners of the car industry.
We increased our marketing and sales capacities worldwide
and participated in three trade fairs in order to develop ourmarket presence in the global car industry.
The EBIT in the Automotive segment reached CHF 5.9 million, down 8.5 % on the exceptionally high EBIT in the firsthalf of 2016/17.
– –Sales in the green cars business climbed by 63 % on theprevious year. The Asian electric vehicle market is growing
fast. New market entrants are driving the development, but
we also see a strong commitment to developing new electric or hybrid-electric vehicle platforms from large car manufacturers around the globe.
– –In the conventional cars business, sales decreased as
expected by 18 %. We experienced a weaker US market
due to low US vehicle sales and the ongoing technologicalshift.

Executing Strategy–– Increase our technology leadership
We lead by technological advantage and launch real innovations that allow our customers to improve the performanceof their applications. One year ago, we decided to significantly increase R&D investments and have since executed
the strategy. We increased our R&D team by almost 20 %.
We hired 15 engineers for our new R&D center in Lyon and
we also added R&D resources in Beijing and Sofia. R&D
expenses amounted to CHF 10.1 million (+28.5 %), representing 6.7 % of sales.
We launched the ITN 1300-S transducer for medical applications for currents of up to 1'300 A requiring high precision
and a compact size.
–– Increase our efficiency
Reviewing our activities and international footprint remains
an ongoing task. We set up additional production lines in
Beijing and Sofia. As a result, we grew the share of costeffective production to 80 % of total sales. We increased theworkshop surface in Sofia by 20 % and continued to expand
the local team. We implemented additional automation in our
Beijing site to further increase efficiency.
–– Increase our production flexibility
We maintained our delivery performance at a high level,
despite the sharp increase in demand. We managed our supply chain more closely and increased the inventory of raw
materials and finished goods to meet growing demand incertain product categories.
In our manufacturing, we are investing in a new generationof "Industry 4.0" automated lines. The new machines dedicated to high volume transducers will be networked with acentral storage, which will combine full traceability, better
efficiency and increased flexibility. The new manufacturinglines will be introduced at our Geneva site.

Frank Rehfeld (49) joined LEM on 1 January 2016 to head theCompany's Industry segment. In this position, he has been
advancing technology leadership, driving growth andaddressing new market segments. Starting his career in R&D
and sales in Body Electronics at Siemens VDO Germany, he
subsequently held multiple leadership positions in China at
Siemens, VDO, Hella as well as Brose. Frank Rehfeld holds
a Master degree in Electrical Engineering from the Universityof Erlangen-Nürnberg and is a German national.
Since 2010, François Gabella has been successfully leading
the Company and achieved a phase of profitable growth andshareholder value creation. This accomplishment was driven
by Mr. Gabella's focused internationalization of the Group,
the implementation of a strong organization and his priority
on innovation. The Board of Directors gratefully emphasizes
his outstanding achievements throughout the years of his
mandate.
LEM's Board of Directors will propose Mr. Gabella to beelected new Board member at the next Annual General Meeting on 28 June 2018 to benefit from his know-how and industry insights.
Outlook
We see our Industry businesses supported by the positive
global economic environment. Our green cars business is set
to remain strong, but we also anticipate volatile development
as this business is mainly relying on government policies.
Seasonality will affect sales in our third financial quarter inEurope (Christmas season) and in our fourth financial quarterin China (Chinese New Year). For the full financial year
2017/18, we forecast sales of around CHF 290 million compared with CHF 264.5 million for full-year 2016/17. We expect
our EBIT margin to remain above 20 %.
We thank you for your continued trust in LEM.
Yours sincerely,

LEM's Board of Directors Appoints Frank Rehfeld as
In-house Successor to CEO François Gabella
After eight successful years at the helm of the Company,
François Gabella has decided to retire from the operationalrole at LEM. Consistent with its long-term planning, LEM's
Board of Directors has appointed Frank Rehfeld, Senior Vice
President Industry, as CEO of LEM Holding SA. Frank Rehfeld
will take over from François Gabella at the start of the financial year 2018/19 (1 April 2018). His broad experience as wellas his personality and the seamless transition will assure thecontinuation of LEM's strong executive leadership and thestrategy of profitable growth. The Board of Directors has initiated a search for the successor to lead LEM's Industry segment.

Andreas Hürlimann
Chairman of the Board of Directors

François Gabella
Chief Executive Officer

LEM | Half Year Report 2017/18

3

Key Figures, Financial Calendar,
Contacts
Key figures

April to September
2017/18
In CHF millions

2016/17
In CHF millions

Change
in %

156.8
1.03
152.2
69.4
45.6 %
31.9
20.9 %
26.5
23.23

132.3
1.00
132.6
61.4
46.3 %
27.5
20.7 %
22.1
19.41

+18.5
+3.2
+14.8
+13.1
– 0.7 pt
+15.9
+0.2 pt
+19.7
+19.7

14.5
– 8.0

22.9
– 4.4

– 36.5– 84.2

Orders received
Book-to-bill ratio
Sales
Gross profit
in % of sales
EBIT
in % of sales
Net profit
EPS basic (CHF)
Operating cash flow
Investing cash flow

30.9.201731.3.2017

ChangeNet financial assets/(liabilities)
Shareholders' equity
Equity ratio (in % of total assets)– 20.1
78.7
46.1

12.8
90.5
60.7

–
– 13.0– 14.6 pt

Market capitalization
Employees (in FTEs)

1'412.5
1'542

1'064.8
1'453

+32.7
+6.1

In
CHF
millions
In CHFmillions
Sales
per segment

In CHFmillions
In CHFmillions
Regional
sales breakdown

In CHF millions

In CHF millions

90

90

90

90

80

80

80

80

70

70

70

66.9
70 66.9

60

60

60

60

50

50

50

50 49% 49%

40

40 82% 82%

40

40

30

30

30

30 17% 17%

20

20

20

20

10

10

10

10 34% 34%

0075.9 75.9
66.9 66.9

18% 18%65.7 65.7

79% 79%21% 21%65.1 65.1

81% 81%

19% 19%76.3 76.3

66.8 66.8

82% 82%

80% 80%82% 82%

18% 18%

18% 18%20% 20%0

Q1 2016/17
Q2 2016/17
Q3 2016/17
Q4 2016/17
Q1 2017/18
Q2 2017/18
Q1 2016/17
Q2 2016/17
Q3 2016/17
Q4 2016/17
Q1 2017/18
Q2 2017/18

Industry
segment
Industry
segment
Automotive
segment
Automotive
segment

65.7 65.7

65.1 65.1

48% 48%

53% 53%

19% 19%33% 33%

17% 17%
31% 31%75.9 75.9

76.3 76.3

54% 54%

53% 53%66.8 66.8

46% 46%

18% 18%

15% 15%

36% 36%

31% 31%

14% 14%

33% 33%0
Q1 2016/17
Q2 2016/17
Q3 2016/17
Q4 2016/17
Q1 2017/18
Q2 2017/18
Q1 2016/17
Q2 2016/17
Q3 2016/17
Q4 2016/17
Q1 2017/18
Q2 2017/18

of theworld
AsiaAsia
andandrestrestof theworld
North
America
North
America

EuropeEuropeFinancial calendar
The financial year runs from 1 April to 31 March

8 February 2018

Third quarter results 2017/18

23 May 2018
28 June 2018

Year-end results 2017/18
Annual General Meeting of Shareholders
for the financial year 2017/18

3 July 2018
5 July 2018

Dividend ex-date
Dividend payment date

LEM | Half Year Report 2017/18

4

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

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

Interim
Consolidated
Financial
Statements

LEM | Half Year Report 2017/18

5

Consolidated Statement of
Financial Position
Assets
Notes

In CHF thousands

Current assets
Cash and cash equivalents
Accounts receivable
Inventories
Income tax receivable
Other current assets
Total current assets

30.9.201731.3.201713'87671'38733'612927
2'131
121'932

12'80958'47930'628723
1'905
104'543

5'058
36'245
6'516
1'025
48'844

5'028
31'381
7'045
985
44'440170'776

148'983

Notes

30.9.201731.3.201794
5

20'28625'143
3'549
1'312
34'000854
85'14424'59822'043
2'824
1'061

1'133
2'523
3'243
6'898

1'127
1'881
4'389
7'397

92'04258'503

570
(676)
9'590
69'24978'733

570
(906)
9'467
81'35090'480170'776

148'983

9

Noncurrent assets
Deferred tax assets
Property, plant and equipment
Intangible assets
Other noncurrent assets
Total noncurrent assets

9

Total assets

Liabilities and equity
In CHF thousands

Current liabilities
Accounts payable
Accrued expenses
Income tax payable
Current provisions
Current financial liabilities
Other current liabilities
Total current liabilities
Noncurrent liabilities
Noncurrent provisions
Deferred tax liabilities
Other noncurrent liabilities
Total noncurrent liabilities

4
9
6

Total liabilities
EquityShare capital
Treasury shares
Reserves
Retained earnings
Total equity

7
7
7

Total liabilities and equity

LEM | Half Year Report 2017/18

6578
51'106

Consolidated
Income Statement
April to September
Notes

2017/18

2016/17

Sales
Cost of goods sold
Gross profit

152'197(82'781)
69'417

132'620(71'257)
61'363

Sales expense
Administration expense
Research & development expense
Other expense
Other income
Operating profit(15'040)(12'511)(10'130)0135
31'870(13'579)(12'496)(7'886)(0)102
27'503Financial expense
Financial income
Exchange effect

(118)
45
1'514

(76)
33
(20)

Profit before taxes

33'31227'441(6'840)(5'319)26'472

22'122

2017/18

2016/17

23.23

19.41

In CHF thousands

Income taxes

89

Net profit

Earnings per share, in CHF
Basic and diluted earnings per share

Notes

The accompanying notes are an integral part of the consolidated financial statements.

LEM | Half Year Report 2017/18

7

Consolidated Statement ofComprehensive Income
April to September
In CHF thousands

2017/18

2016/17

Net profit for the period recognized in the income statement

26'472

22'122

354
354

(909)
(909)

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

1'252
(272)
979

(1'754)380(1'374)

Other comprehensive income/(loss) for the period, net of tax

1'333(2'283)

Total comprehensive income for the period
Attributable to shareholders

27'80527'80519'83919'839Other comprehensive income to be reclassified to
profit and loss in subsequent periods
Currency translation difference
Total 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

Consolidated Statement of
Changes in Equity
Attributable to shareholders
Notes

In CHF thousands

1 April 2016
Net profit for the period
Other comprehensive income/(loss)
Total comprehensive income
Dividends paid
Movement in treasury shares
30 September 2016

1 April 2017
Net profit for the period
Other comprehensive income/(loss)
Total comprehensive income
Dividends paid
Movement in treasury shares
30 September 2017

LEM | Half Year Report 2017/18

8

Share
­capital

Treasuryshares570(502)

12'445

570

(253)
(755)

253
12'69875'919 85'894
22'122
22'122(909)(1'374)(2'283)(909)
20'74819'839(39'879) (39'879)
(92)
(92)
(3'447) 56'696
65'762570(906)

12'849(3'383)

570

231
(676)

(231)
12'6197
7

7
7

Capital Translation
reserve
reserve

Retainedearnings

Total
equity(2'538)81'35090'48026'47226'472
354
979
1'333
354
27'451 27'805(39'889) (39'889)
337
337(3'029)69'24978'733

Consolidated Cash
Flow Statement
April to September
2017/18

2016/17

Cash flow from operating activities
Profit before taxes
Adjustment for noncash items and taxes paid
Cash flow before changes in net working capital
Cash flow from changes in net working capital
Cash flow from operating activities

33'312(744)
32'568(18'045)
14'52327'441(1'622)25'819(2'940)22'879Cash flow from investing activities
Investment in fixed assets
Investment in intangible assets
Increase (–) / decrease (+) in other assets
Cash flow from investing activities(7'798)(193)(43)(8'033)(4'198)(202)
38(4'362)337(39'889)
34'000(5'552)(92)(39'879)
28'000(11'971)

937

6'546

12'809129
13'876

13'629(102)
20'072

In CHF thousands

Cash flow from financing activities
Treasury shares acquired (–) /divested (+)
Dividends paid to the shareholders of LEM Holding SA
Increase (+) / decrease (–) in financial liabilities
Cash flow from financing activities
Change in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Exchange effect on cash and cash equivalents
Cash and cash equivalents at the end of the period

Notes

7
7
5

LEM | Half Year Report 2017/18

9

Notes to the Interim Consolidated
Financial Statements
1 	 General information
LEM Group (the Group) is a market leader in providing innovative and high-quality solutions for measuring electricalparameters. Its core products – 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.

The preparation of the interim consolidated financial statements in conformity with IFRS requires management to makeestimates and assumptions that affect the reported amountsof revenues, expenses, assets and liabilities and related disclosures at the date of the interim financial statements. Theseestimates are based on management's best knowledge ofcurrent events and actions that the Group may undertake inthe future. However, actual results could differ from thoseestimates.

2 	 Significant accounting principles
These unaudited consolidated financial statements for thesix months ended on 30 September 2017 have been preparedin accordance with International Accounting Standard (IAS)
34 "Interim Financial Reporting". They do not include all theinformation and disclosures presented in the annual consolidated financial statements and should therefore be readin conjunction with those for the year ended 31 March 2017.
The accounting and valuation policies are consistent withthose applied in preparing the annual consolidated financial
statements for the year 2016/17.

In accordance with IAS 1 "Presentation of Financial Statements," the financial information is presented in thousandsof 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 tokeep the accuracy of the original data.
In 2017/18, LEM Group introduced the following revised
standards and interpretations:Standard or i­nterpretation

Title

Effective date

ImpactIAS 7

Disclosure Initiative
Amendments to IAS 7

1 January 2017

None

IAS 12

Recognition of Deferred Tax Assets for Unrealized Losses
Amendments to IAS 12

1 January 2017

None

Amendments

Annual improvements to IFRS 2014–2016

1 January 2017

None

The following table summarizes the principal exchange rates that have been used in the translation process.
Period-end rate for balance sheet

Period average rate for income statement

Currency

30.9.201731.3.2017

Var. in %2017/18

2016/17

Var. in %

BGN
CNY
DKK
EUR
GBP
JPY
RUB
USD

0.586
0.146
0.155
1.144
1.295
0.0086
0.017
0.974

0.545
0.145
0.144
1.069
1.250
0.00900.018
1.001+7.5 %+0.7 %+7.6 %+7.0 %+3.6 %– 4.4 %
– 5.6 %
– 2.7 %

0.565
0.144
0.149
1.106
1.258
0.0088
0.017
0.973

0.559
0.148
0.147
1.093
1.338
0.00930.015
0.973+1.1 %– 2.7 %
+1.4 %+1.2 %– 6.0 %
– 5.4 %
+13.3 %
+0.0 %

LEM | Half Year Report 2017/18

10

3 	 Segment information
In CHF thousands

April to September 2016
Sales
Operating profit

April to September 2017
Sales
Operating profit

Industry

Automotive

LEM Group
Total

107'007
21'01025'613
6'494

132'620
27'503

Industry

Automotive

LEM Group
Total

123'691
25'93128'507
5'939

152'197
31'8704 	 Current and noncurrent provisions

7 	 Equity

Warranty and customer claims
Provisions for warranty and customer claims have been estimated based on past experience and the risk assessment ofmanagement. The warranty provision is expected to be usedover the next five years.

At the shareholders' meeting held in Fribourg on 29 June
2017, the shareholders approved the distribution of an ordinary dividend of CHF 35.00 per share resulting in an estimated payout of CHF 39'856 thousand. The gross dividend
effectively paid on 6 July 2017 amounted to CHF 39'889
thousand (prior year: ordinary dividend of CHF 35.00; total
CHF 39'879 thousand).

Litigations and consumption taxes
Despite the care that LEM applies in the separation processwith personnel, such separation may result in legal conflicts.
The Group will defend its case and management estimates
the reasonable risk to be provided for.

In the frame of its market-making contract, LEM holds own
shares. At 30 September 2017, the Group held 554 shares(31 March 2017: 947).

The Company operates in multiple jurisdictions with complex
legal and tax regulatory environments. In the frame of thecontinuous improvement of its processes and systems, LEM
has reviewed the consumption taxes in several countries. It
has appeared that some LEM's subsidiaries may not havebeen fully compliant with their local consumption tax regulations. As a consequence, LEM has estimated consumption
tax provisions according to management's best judgment.
Some of these positions are inherently uncertain and include
the interpretation of local regulations applied to complex
transactions.

8 	 Operating profit
Our sales increased by 14.8 % to CHF 152.2 million in the firsthalf of 2017/18; at constant exchange rates, this represents
a sales increase of 15.9 %.
Our gross margin stood at 45.6 %, down from 46.3 % in thefirst half of 2016/17, while EBIT reached CHF 31.9 million, an
increase of 15.9 % on the first half of 2017/18. Our EBIT margin for the first six months of 2017/18 was 20.9 %, comparedwith 20.7 % a year earlier. Increasing sales volumes together
with a fairly stable gross margin rate supported the operating
result achieved on the first half of the year 2017/18.

5 	 Current financial liabilities
LEM Group increases financial short-term liabilities to
CHF 34.0 million (CHF 0.0 million at 31 March 2017) via shortterm credit lines in order to finance the CHF 39.9 million dividend payment of July 2017.

6 	 Other noncurrent liabilities
The decrease of the noncurrent liabilities is mainly linked tothe decrease of the retirement benefit obligation due to thegains on the fair value of plan assets booked in other comprehensive income at 30 September 2017.

LEM | Half Year Report 2017/18

11

9 	 Income taxes

10 	 Consolidated cash flow statement

Income tax expense is calculated based on the best estimateof the applicable annual income tax rate expected for the fullyear.

The cash flow from changes in net working capital evolution
is mainly linked to the increase of the accounts receivable asa consequence of the activity increase.

The Group operates in multiple jurisdictions with complex
legal and tax regulatory environments. In certain of thesejurisdictions, the Group has taken income tax positions thatmanagement believes are supportable and are intended towithstand challenge by tax authorities. Some of these positions are inherently uncertain and include those relating totransfer pricing matters and the interpretation 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 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 deferredtaxes in the period in which such determinations are made.
The Group calculates its expected average tax rate as aweighted average of the tax rates in the tax jurisdictions inwhich the Group operates.

In order to finance the CHF 39.9 million dividend payment
the financial liabilities were increased by CHF 34.0 million via
our bank credit lines.

The increase in tax rate is linked to a different breakdown of
our revenue.

LEM | Half Year Report 2017/18

12

11 	 Contingent liabilities
The Group Financial Statements as of 31 March 2017 mentioned a case between LEM International SA and the Frenchcustoms authorities which were questioning the validity of
the applied VAT exemption (so-called régime 42) for goods
sold from Switzerland to EU customers transiting throughFrance. The value-added tax requested amounted to
EUR 15.4 million.
On 12 June 2017, the French customs authorities announced
to LEM International SA that they decided to drop the charges
and to cancel the related value-added tax payment requestof EUR 15.4 million.

12 	 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

30.9.2017
Fair value

31.3.2017
Fair value

Loans andreceivables

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

13'87671'38787
1'025
86'37412'80958'47918985
72'291X
X
X
X

In CHF thousands

30.9.2017
Fair value

31.3.2017
Fair value

Loans andreceivables

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

20'28625'14358
34'000
6
79'49324'59822'04318
0
246'661X
X

Financial liabilities

The management assessed that fair value level of cash andcash equivalents, accounts receivables, other current andnoncurrent assets, accounts payables, accrued expenses
and other current and noncurrent liabilities that are not measured at fair value approximate their carrying amounts in viewof 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 are of minor or no impact.

At fair value
through
profit and loss

At fair value
through
profit and loss

X
X
X

Fair value hierarchy
The Group uses the following hierarchy for determining anddisclosing 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 level1 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 that 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 58
thousand per 30 September 2017 (financial liabilities of
CHF 18 thousand per 31 March 2017), all classified underlevel 2.
During the two last reporting periods, there were no transfers
between Level 1 and Level 2 fair value measurements, andno transfers into and out of Level 3 fair value measurements.

The Board of Directors reviews and agrees policies for managing each of those risks.

13 	 Events after the balance sheet date
The Board of Directors and Executive Management are notaware of any significant events up to the date of approval of
the interim consolidated financial statements on 31 October
2017 that would require an adjustment in carrying amountsof the Group's assets and liabilities.

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