Financial Report18 | 19

Contents

		 LEM Group
4

Consolidated financial statements

9Notes to the consolidated financial statements

38

Auditor’s report

42

Corporate governance report

52

Compensation report

58

Auditor’s report		

LEM HOLDING SA

60

Financial statements

62

Notes to the financial statements

66

Auditor’s report

68Group subsidiaries

LEM Financial Report 18 | 19

Page 2

LEM GroupConsolidated statement offinancial position

AssetsNotes

31.3.2019

31.3.2018
Restated

1.4.2017
Restatedin CHF thousands

Current assets
Cash and cash equivalents

12’538

17’63012’809Accounts receivable

6

68’65166’64858’479Inventories

7

39’21135’78730’628

2’571

131

723

2’226

2’541

1’905

125’197

122’737

104’543

Income tax receivable
Other current assets

8

Total current assets
Noncurrent assets
Deferred tax assets

20

13’49414’1894’555

Property, plant and equipment

9

42’20939’93731’381Intangible assets

10

5’178

6’181

7’045

Other noncurrent assets

11

1’036

2’800

985

Total noncurrent assets

61’916

63’10743’967

Total assets

187’113185’844

148’510Notes

31.3.2019

31.3.2018
Restated

1.4.2017
Restated

12

Liabilities and equity
in CHF thousands

Current liabilities
Accounts payable

22’76025’71824’598

Accrued expenses

26’047

26’35922’043

Income tax payable

5’253

6’037

2’824

1’778

682

1’061

8’000

5’000

Current provisions

13

Interest-bearing loans and borrowings
Other current liabilities

14

Total current liabilities

660

778

578

64’49864’57451’106

Noncurrent liabilities
Noncurrent provisions

13

1’980

1’026

1’127

Deferred tax liabilities

20

3’559

6’793

1’881

Other noncurrent liabilities

14

3’951

1’873

2’157

Total noncurrent liabilities

9’490

9’692

5’165

Total liabilities

73’98874’267

56’270EquityShare capital

15

570

570

570

Treasury shares

15

(983)

(1’091)(906)

Reserves

15

11’616

12’997

9’467

Retained earnings

101’92299’101

83’110Total equity

113’125

111’577

92’239Total liabilities and equity

187’113185’844

148’510LEM Financial Report 18 | 19

Page 4

Consolidated
income statement

April to MarchNotes

2018/19

in CHF thousands

Sales

2017/18
Restated

321’591

301’243(175’098)(162’383)

Gross margin146’493138’859

Sales expenses(29’733)(30’278)

Administration expenses(24’640)(24’609)

Research & development expenses(27’576)(21’255)

Cost of goods sold

Other expenses
Other income
Operating profit

252

412

64’796

63’129(298)

Financial expenses

17

(179)

Financial income

18

155

143

Exchange effect19(2’519)1’345

62’25264’320(9’876)(9’891)52’37654’428

45.97

47.76

Profit before taxes
Income taxes

20

Net profit for the year
Earnings per share, in CHF
Basic & diluted earnings per share

21

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

LEM Financial Report 18 | 19

Page 5

Consolidated statement ofcomprehensive income

April to MarchNotes

2018/192017/18
Restated

52’37654’428in CHF thousands

Net profit for the period recognized in the income statement
Other comprehensive income to be reclassified to profit and loss
in subsequent periods
Currency translation difference(1’272)

3’346

Total other comprehensive income to be reclassified to profit and loss
in subsequent periods(1’272)

3’346

1’707

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

23(4’758)Remeasurement gains /(losses) on defined benefit plans, in Germany

23

22

30

Income tax

20

1’007

(389)

Total other comprehensive income not to be reclassified to profit and loss
in subsequent periods(3’730)

1’348

Other comprehensive income /(loss) for the period, net of tax(5’002)

4’694

Total comprehensive income for the period

47’37459’122LEM Financial Report 18 | 19

Page 6

Consolidated statement ofchanges in equity

Attributable to shareholders
Notes
in CHF thousands

1 April 2017
Effect of restatement

SharecapitalTreasurysharesCapitalreserve

Translation
reserve

Retainedearnings

Total
equity570(906)

12’849(3’383)81’35090’4803

1 April 2017 Restated

570

(906)

12’849(3’383)

Net profit for the year

1’760

1’760

83’11092’23954’42854’428Other comprehensive income/(loss)

3’346

1’348

4’694

Total comprehensive income

3’346

55’77759’122(39’889)(39’889)

Dividends paid

15

Movement in treasury shares

15

31 March 2018 Restated / 1 April 2018

570

(185)

185

(1’091)13’034

104

104

(37)

99’101111’577

52’37652’376(1'272)(3’730)(5’002)

Net profit for the year
Other comprehensive income/(loss)
Total comprehensive income(1'272)

Dividends paid

15

Movement in treasury shares

15

31 March 2019

570

109

(109)

(983)

12’926(1’310)48’64647’374(45’561)(45’561)

(265)

(265)

101’922113’125

The amount available for dividend distribution is based on LEM HOLDING SA shareholders’ equity determinedin accordance with the legal provisions of the Swiss Code of Obligations.

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Consolidated cash flow
statement

April to MarchNotes

2018/192017/18
Restated

62’25264’32014

134

in CHF thousands

CASH FLOW FROM OPERATING ACTIVITIESProfit before taxes
Adjustment for noncash items and taxes paid
Net financial result
Derivative financial instruments revaluation

(73)

223

Depreciation and amortization

9’056

8’219

Impairment loss

2’734

550

Gain / Loss on disposal of fixed assets
Increase (+) / decrease (-) of provisions and allowances
Movement in pension
Interest received
Interest paid
Taxes paid

402

420

3’791

(318)

(1’000)

(870)

113

79

(127)

(213)

(14’852)(10’824)

Cash flow before changes in net working capital

62’31061’719Change in inventories(4’908)(4’106)

Change in accounts receivable and other current assets(3’511)(6’419)Change in payables and other liabilities

(342)

2’930

Cash flow from changes in net working capital(8’761)(7’594)

Cash flow from operating activities

53’54954’124

CASH FLOW FROM INVESTING ACTIVITIESInvestment in fixed assets

9(14’243)(14’788)

Investment in intangible assets

10

(365)

(434)

Increase (-) in other assets

(610)

(268)

Decrease (+) in other assets

465

377

(14’754)(15’113)(10’208)

Cash flow from investing activities
CASH FLOW FROM FINANCING ACTIVITIESTreasury shares acquired (-)

15(10’445)

Treasury shares divested (+)

15

10’180

10’312

Dividends paid to the shareholders of LEM HOLDING SA

15(45’561)(39’889)

Increase (+) in financial liabilities

52’00043’000Decrease (-) in financial liabilities(49’000)(38’000)

Cash flow from financing activities(42’826)(34’785)

Change in cash and cash equivalents(4’030)4’226

Cash and cash equivalents at the beginning of the period

17’63012’809Exchange effect on cash and cash equivalents(1’062)595

Cash and cash equivalents at the end of the period

12’538

17’630LEM Financial Report 18 | 19

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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 andmobility, ensuring that its customers’ systems are optimized, reliable and safe. The Group has operations in fifteen countries andemploys 1’477 people as per 31 March 2019. The parent company of LEM Group is LEM HOLDING SA (the Company), which is alimited company incorporated in Switzerland.
The registered office is at Avenue Beauregard 1, CH-1700 Fribourg. The financial year ends on 31 March (the year). The Company has been listed on the SIX Swiss Exchange since 1986.
The Board of Directors approved the consolidated financial statements on 16 May 2019, to be submitted for approval by the
Annual General Meeting of Shareholders on 27 June 2019.
2.
Significant accounting principles
2.1 Basis of preparation
The consolidated financial statements of LEM Group have been prepared in accordance with the International Financial andReporting Standards (IFRS) 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 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 theoriginal data.
2.2 Adoption of new and revised International Financial Reporting Standards and interpretations
New standards in 2018/19
In 2018/19, LEM Group introduced the following revised standards and interpretations:Standard or ­interpretation

Title

Effective date

IFRS 9Financial Instruments

1 January 2018

IFRS 15

Revenue from Contracts with Customers and its Amendments

1 January 2018

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Page 9

Notes to the consolidated
financial statements

New and amended standards and interpretations
The Group applied IFRS 15 and IFRS 9 for the first time. The nature and effect of the changes as a result of adoption of these
new accounting standards are described below.
Several other amendments and interpretations applied for the first time in 2018 but do not have an impact on the consolidated
financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that havebeen issued but are not yet effective.
IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. IFRS 15 establishes a five-step model to account for revenue
arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration towhich an entity expects to be entitled in exchange for transferring goods or services to a customer.
IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenues and cash-flows arising from an entity’s contracts withcustomers.
According to the new guidance, revenue recognition depicts the transfer of promised goods and services to customers in an
amount that reflects the consideration to which the entity expects to be entitled for these goods and services. Revenue is recognized when (or as) control of the goods and services is transferred to the customer. The standard replaces existing revenue
recognition guidance including IAS 18 Revenues.
The Group has evaluated the potential impacts of this standard on the timing of recognition of revenue. Representative contracts with customers have been reviewed and as a result, the performance obligations identified relate primarily to the delivery of manufactured products. They may contain some additional performance obligations such as freight costs recharges
or specific product developments which are highly dependent on the delivery of our transducers and amount to only 0.3 %of revenues at 31 March 2019. Before IFRS 15 implementation, the Group was already recognizing revenues at points in time
according to the different delivery terms, which is in line with IFRS 15 based on the performance obligations identified. As aresult there is no impact of the transition in the financial statements.
IFRS 9 generates changes to the classification and measurement of financial instruments as well as to the impairment of financial assets, in particular bad debt allowances. The Group implemented the new standard as of April 1, 2018. The exemption
from full retrospective application for the classification and measurement requirements has been applied. As a consequence,comparative figures were not restated and continue to be reported under IAS 39.
The bad debt allowance calculation has been adjusted in order to reflect the forward looking expected credit loss model using
the Group’s historical credit loss experience, adjusted for forward looking factors specific to the customers and/or the economic environment. The new calculation mainly impacts the not-past-due receivables. This impact amounts to CHF 0.1 million as ofMarch 31, 2019. Accounts receivable, which were presented under “Loans & receivables” under IAS 39, are now presented in
the category “Financial assets at amortized cost”.
Future standards
LEM Group will adopt the following revised standards and interpretations in the future:
Standard or ­interpretation

Title

Effective date

IFRS 16

Leases

1 January 2019

IFRIC 23

Uncertainty over income tax treatments

1 January 2019

The Group will implement the relevant new standards when they become effective, i.e., for annual periods beginning on orafter the effective date stated above.

LEM Financial Report 18 | 19

Page 10

Notes to the consolidated
financial statements

IFRS 16 Leases
IFRS 16 was issued in January 2016 and replaces the following standards:–– IAS 17 Leases,–– IFRIC 4 Determining whether an Arrangement contains a Lease,–– SIC-15 Operating Leases-Incentives and–– SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees
to account for all leases under a single on-balance sheet model comparable to finance leases under IAS 17.
The standard includes two recognition exemptions for lessees: leases of ’low-value’ assets (e.g., personal computers) andshort-term leases (i.e., leases with a lease term of 12 months or less).
At the commencement date of a lease, a lessee will recognize a liability to make lease payments (i.e., the lease liability) andan asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be
required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use
asset.
Lessees will also be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the leaseterm, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The
lessee will generally recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-use
asset.
IFRS 16, which is effective for annual periods beginning on or after 1 January 2019, requires lessees and lessors to make more
extensive disclosures than under IAS 17.
Transition to IFRS 16
The Group plans to adopt IFRS 16 using the modified retrospective approach. The Group will apply the standard to contracts
that were previously identified as leases applying IAS 17 and IFRIC 4. The Group will therefore not apply the standard to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4.
The Group will use the exemptions proposed by the standard on lease contracts for which the lease terms ends within 12
months as of the date of initial application, and lease contracts for which the underlying asset is of low value. The Group hasleases of certain office equipment (i.e., printing and photocopying machines) that are considered of low value.
In 2018/19, the Group has performed a detailed impact assessment of IFRS 16. This will result in an increase in assets and liabilities of approximately CHF 18.5 million. Furthermore, the Group expects a decrease in operating expenses of approximately CHF
0.2 million and an increase of financial expenses by approximately CHF 0.5 million in 2019/20. The first-time application will nothave a significant impact on the Group’s net profit. Comparatives will not be restated.
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.

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Page 11

Notes to the consolidated
financial statements

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 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.
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.
2.4 Basis of consolidation
The consolidated financial statements are comprised 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 the 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 costs of purchasing a company are determined as 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
acquired, on the date of purchase. Identifiable acquired assets, liabilities and contingent liabilities are recognized at their fairvalue as of the 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 purchaseprice is shown 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.

LEM Financial Report 18 | 19

Page 12

Notes to the consolidated
financial statements

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 exist as per 31 March 2019 and 31 March 2018.
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 company is sold, the cumulative translation differences recognized in other comprehensive income are transferred to the income statement.
The following table summarizes the principal exchange rates that have been used in the translation process:Currency

Income statementof 2018/19

Income statementof 2017/18

Balance sheet
31.3.2019

Balance sheet
31.3.2018

Average rate in CHF

Average rate in CHF

Year-end rate in CHF

Year-end rate in CHF

BGN

0.586

0.579

0.571

0.600

CNY

0.147

0.146

0.148

0.152

DKK

0.154

0.152

0.150

0.157

EUR

1.146

1.133

1.116

1.174

GBP

1.299

1.285

1.296

1.336

JPY

0.00890.00880.00900.0090

RUB

0.015

0.017

0.015

0.017

USD

0.989

0.971

0.995

0.953

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 nonmonetary 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.

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Page 13

Notes to the consolidated
financial statements

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

Machinery and equipment

5 – 8 years

Tools and moulds

2 – 5 years

Vehicles3 – 5 years

IT equipment

3 – 5 years

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 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.

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Page 14

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.
2.10 Impairment of tangible fixed assets and intangible 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 levels for which there are separately identifiable
cash flows (cash generating units).
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 noncurrent 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.
2.11 Financial assets
Financial assets comprise cash, receivables, certain accrued income, marketable securities and derivative financial instruments.
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 2.12);–– loans and receivables are measured at amortized cost using the effective interest rate method, less impairment.
Accounts receivable are carried at original invoice amount less an allowance made for doubtful accounts based on a review ofall outstanding amounts at the 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 irrecoverable. 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.
2.12 Derivative financial instruments
The Group uses derivative financial instruments to hedge foreign exchange risks of forecasted transactions. Derivative financial
instruments comprise forward exchange contracts.

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Page 15

Notes to the consolidated
financial statements

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 taken directly to the income statement, which means that
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 ismore than one year, derivative financial instruments are recognized under other noncurrent assets or other noncurrent liabilities.
2.13 Financial liabilities
Financial liabilities comprise bank loans, payables, certain accrued expenses and derivative financial instruments at the end of
the period.
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 more than 12 months after the balance sheet date.
2.14 Leases
In the years under review LEM Group does not hold any finance leases.
Rentals payable under operating leases are charged to the income statement on a straight-line basis over the lease term.
2.15 Employee benefits
The Swiss and German subsidiaries provide a defined benefit plan for employees; the other subsidiaries provide defined contribution plans. In both cases the charges are included in the related periods in the personnel expenses of 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 costs of pension
benefits are determined using the projected unit credit method. Service costs are part of personnel expenses and consist of
current service costs, past service costs 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 limiting its economic benefit suchas to the value of the maximum future savings from reduced contributions.
Defined contribution plan
The subsidiaries sponsor defined contribution plans based on local practices and regulations.
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 year-end.

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Page 16

Notes to the consolidated
financial statements

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.
Warranty and customer claims
The Group recognizes the estimated liability to replace products still under warranty at the balance sheet date. This position is calculated based on past history of the level of repairs and replacements. Additional specific provisions are booked when required.
Litigations and consumption taxes
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 has 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 recognized in 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 product. 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 revenues that are derived from sales of products to third parties after deduction of price rebates and value-added tax.

LEM Financial Report 18 | 19

Page 17

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
and liabilities are offset against each other if the corresponding income taxes are raised by the same tax authority and a legally
enforceable right for offsetting exists.
3.

Restatement of the opening balance sheet as at 1 April 2017 and of the consolidated financial statements for the year
ended at 31 March 2018
In April 2019 the Group has identified an error in the consolidated financial statements for the years ended 31 March 2018 and
31 March 2017. The conversion rates used for the calculation of the retirement benefit obligations as of 31 March 2018 and 31
March 2017 were not correct.
According to IAS 8, an entity shall correct material prior errors retrospectively in the first set of financial statements authorized
for issue after their discovery by:(a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or(b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities andequity for the earliest prior period presented.
Consequently, the comparative periods of these reports have been restated and are presented hereinafter.

31.3.2017

IAS 19

1.4.2017

Restatement

Restated

5’028

(473)

4’555

4’389

( 2’232)

2’157

81’350

1’760

83’110in CHF thousands

Noncurrent assets
Deferred tax assets
Noncurrent liabilities
Other noncurrent liabilities
EquityRetained earnings

LEM Financial Report 18 | 19

Page 18

Notes to the consolidated
financial statements

31.3.2018

IAS 19
Restatement

31.3.2018
Restated

14’469(280)

14’189

906

1’894

2’800

in CHF thousands

Noncurrent assets
Deferred tax assets
Other noncurrent assets
Noncurrent liabilities
Deferred tax liabilities

6’392

400

6’793

Other noncurrent liabilities

3’205(1’332)

1’873

96’556

2’545

99’101

2017/18

IAS 19
Restatement

2017/18
Restated(162’826)

443(162’383)

138’416443

138’859

EquityRetained earnings

in CHF thousands

Sales

301’243

Cost of goods sold
Gross margin

301’243

Sales expenses(30’540)261(30’278)

Administration expenses(24’892)283(24’609)

Research & development expenses(21’679)423(21’255)

1’411

63’129Other expenses
Other income

412

Operating profit

61’719Financial expenses(298)

Financial income

127

Exchange effect1’345

Profit before taxes

62’893

Income taxes
Net profit for the year

412

(298)
16

143
1’345

1’426

64’320(9’587)(304)(9’891)53’306

1’122

54’428

Restatement

2017/18
Restated

1’122

54’428

Earnings per share2017/18
Basic and diluted earnings per share
Net profit for the year attributable to LEM shareholders – in CHF thousands

53’306

Ordinary 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

418

418

1’139’582

1’139’582

46.78

47.76

Weighted average number of shares outstanding
Earnings per share – basic and diluted in CHF

LEM Financial Report 18 | 19

Page 19

Notes to the consolidated
financial statements

4.
Segment information
Business segment information
Industry
In CHF thousands

2018/192017/18
Restated

Automotive
2018/19

LEM Group

2017/18
Restated

2018/192017/18
Restated
301’243

Income statement
Sales

250’230242’248

71’36158’995321’591

EBITDA

64’503

58’76012’08313’13776’58571’897

Operating profit

54’90352’350

9’893

10’77964’796

63’129Net financial expenses(2’544)

1’190

Taxes

(9’876)(9’891)

Net profit for the year

52’37654’428Depreciation and amortization
Tangible assets

5’880

5’300

1’837

1’618

7’717

6’919

Intangible assets

986

925

352

375

1’338

1’300

Impairment loss

2’734

184

366

2’734

550

Total

9’600

6’410

2’190

2’359

11’7908’768

Tangible assets

9’583

10’271

4’660

4’517

14’243

14’788Intangible assets

284

349

81

85

365

434

9’867

10’620

4’741

4’602

14’60815’222

Capital expenditures

Total assets

For management purposes, LEM Group is organized into two operating segments, Industry and Automotive. The Industry segment develops, manufactures and sells electronic components called transducers for the measurement of current and voltage
of various industrial applications. The Automotive segment develops, manufactures and sells transducers for applications in
automotive markets.

5.

Revenue information

Regional information
Industry
2018/192017/18

Europe102’899

97’786

North America

28’67826’154

Asia and rest of
the world

118’653

118’308

Total

250’230242’248

In CHF thousands

Automotive
2018/19

LEM Group

2017/18

2018/192017/18

4’336

3’571

107’235

101’357

14’53916’77043’21742’92452’48638’654

171’139

156’962

71’36158’995321’591

301’243

Sales

LEM Financial Report 18 | 19

Page 20

Notes to the consolidated
financial statements

Geographical information
China
In CHF thousands

2018/19

Sales
Noncurrent assets

USA

Sales
Noncurrent assets1

Japan

2018/192017/18

2018/192017/18

2018/192017/18

106’340

98’49941’15541’381

38’11338’992

28’34426’361

15’85314’705

23

31

259

223

3’894

3’589

Italy
In CHF thousands

Germany

2017/18

2018/192017/18

11’66711’04849

63

Switzerland
2018/19

Rest of the world

LEM Group

2017/18

2018/192017/18

2018/192017/18

3’856

3’095

92’116

81’866321’591

301’243

16’231

17’772

11’0789’733

47’387

46’118

Sales are reported as per place of transaction.
1 Other than financial instruments, deferred tax assets, post employment benefit assets

6.

Accounts receivablein CHF thousands

Accounts receivable – trade
Allowance for doubtful accounts / expected credit losses
Total accounts receivable – trade

31.3.2019

31.3.201862’46859’799

(838)

(763)

61’63059’035

Other receivables

7’020

7’612

Total

68’65166’648

2018/192017/18

Opening position

763

689

Additions charged / (reversals credited) to income statement

437

129

Amounts written off

(350)

(75)

Foreign exchange effect

(12)

19

Total

838

763

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

LEM Financial Report 18 | 19

Page 21

Notes to the consolidated
financial statements

Aging analysis of accounts receivable
In CHF thousands

Not due< 30 days

31– 90 days

91– 180 days

> 180 days

Total

47’636

8’411

2’826
(144)

371

555

59’799

(97)

(522)

(763)

274

31 March 2018
Accounts receivable – trade
Allowances for doubtful accounts /expected credit losses
Other receivables

7’601

Total

55’237

8’411

2’682

11

7’612

44

66’64849’839

8’793

2’825

(204)

(42)

(127)

694

317

62’468

(155)

(311)

(838)

2’698

539

7

68’65131 March 2019
Accounts receivable – trade
Allowances for doubtful accounts /expected credit losses
Other receivables

6’832

189

Total

56’467

8’940

7.

7’020

Inventories
31.3.2019

31.3.2018

Raw material

17’841

13’391Work in progress

2’203

1’724

Finished goods and goods for resale

19’167

20’672

Total

39’21135’787in CHF thousands

The inventories include allowances of CHF 3’071 thousand (at 31 March 2018 CHF 2’196 thousand).

8.

Other current assets
31.3.2019

in CHF thousands

Advances to suppliers
Prepayments and accrued income
Other current assets
Total

LEM Financial Report 18 | 19

Page 2231.3.2018

608

713

1’538

1’613

80

215

2’226

2’541

Notes to the consolidated
financial statements

9.

Property, plant and equipmentin CHF thousands

Net book value 1 April 2017Land and buildings

Machinery andequipment

Total

87

31’29431’381

Foreign exchange effect

1’658

1’657

Investment

14’78814’788

Disposal

(420)

(420)

Impairment gain / (loss)

(550)

(550)

Depreciation charge for the year

(15)

(6’904)(6’919)Net book value 31 Mars 201871

39’86639’937

At cost of acquisition

364

108’941

109’305(293)(69’075)(69’368)

Net book value 31 Mars 201871

39’86639’937

Net book value 1 April 201871

Accumulated depreciation

Foreign exchange effectInvestment

6

Disposal
Impairment gain / (loss)

39’86639’937(1’118)(1’118)

14’237

14’243

(402)

(402)

(2’734)(2’734)

Depreciation charge for the year

(15)

(7’702)(7’717)

Net book value 31 Mars 201962

42’14642’209At cost of acquisition
Accumulated depreciation
Net book value 31 Mars 2019

LEM Financial Report 18 | 19

Page 23370

119’297

119’668(308)(77’151)(77’459)62

42’14642’209

Notes to the consolidated
financial statements

10.

Intangible assets

in CHF thousands

Net book value 1 April 2017
Foreign exchange effect

Goodwill

Patents

Other
intangible assets

Total

3’165

247

3’633

7’045

(23)

Investment
Transfer movement

25

2

434

434

44

(44)

(1)

(76)

(1’223)(1’300)Net book value 31 Mars 2018

3’141

215

2’825

6’181

At cost of acquisition

3’141

Amortization charge for the year

Accumulated amortization

5’374

10’467

18’982(5’159)(7’642)(12’801)

Net book value 31 Mars 2018

3’141

215

2’825

6’181

Net book value 1 April 2018

3’141

215

2’825

6’181

(16)

(29)
365

Foreign exchange effect(13)

Investment

33

332

Transfer movement

1

(1)

(76)

(1’262)(1’338)

173

1’878

5’178

Amortization charge for the year
Net book value 31 Mars 2019

3’127

At cost of acquisition

3’127

Accumulated amortization
Net book value 31 Mars 2019

3’127

5’408

10’73919’274(5’235)(8’862)(14’096)

173

1’878

5’178

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 Industry segment. The recoverable amount has been determined based on valuein-use calculations. These calculations use cash flow projections of five years based on financial business plans and budgets
approved by management. The projections include assumptions concerning revenue growth and expected operating costs.
Average revenue growth is projected at 9 % and operating costs were estimated based on the experience of management. The
pretax discount rate used within these cash flow calculations is 12.8 % (2017/18 11.2 %) 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 for the year ended 31 March 2019.

11.

Other noncurrent assets
31.3.2019

in CHF thousands

31.3.2018
Restated

Loans to personnel

422

525

Deposits & guarantees

613

381

1’036

2’800

Postemployment benefit plans

1’894

Total

LEM Financial Report 18 | 19

Page 24

Notes to the consolidated
financial statements

12.

Accounts payable
31.3.2019

31.3.2018

Total accounts payable – trade

19’581

20’634

Other payables

3’179

5’085

Total

22’76025’718

Other

Total

in CHF thousands

13.

Provisions

In CHF thousands

Balance as per 1 April 2017
Additional provisions

Warranty andcustomer claims

Litigations andconsumption taxes

1’961

227

2’188

(34)

(769)

474

474

Unused amounts reversed(735)

Utilized during the year

(191)

Foreign exchange effect

(4)

11

7

1’505

204

1’709

Balance as per 31 March 2018(191)

Of which current

682

Of which noncurrent

1’026

Balance as per 1 April 2018

1’505

Additional provisions

2’399

Unused amounts reversed(790)

Utilized during the year(526)

Foreign exchange effect

(12)

(5)

8

(9)

2’575

198

985

3’758

Balance as per 31 March 2019

204

1’709
976

3’375
(790)
(526)

Of which current

1’778

Of which noncurrent

1’980

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 consumption 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. In the frame of the continuous improvement of its processes and systems, LEM has reviewed the consumption taxes in several countries. It has appearedthat some LEM’s subsidiaries may not have been 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.

LEM Financial Report 18 | 19

Page 25

Notes to the consolidated
financial statements

14.

Other liabilities
31.3.2019

31.3.2018
Restated

1.4.2017
Restated

Postemployment benefit plans

2’692

828

1’416

Derivative financial instruments

168

241

18

Other liabilities

1’751

1’582

1’301

Total

4’611

2’651

2’735

660

778

578

3’951

1’873

2’157

In CHF thousands

Of which current
Of which noncurrent

The increase of the post-employment benefit plan liability is mainly linked to the decrease in the fair value of assets,
as elaborated in note 23.

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.
There is 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.
Movement of treasury shares
NumberIn number of shares, in CHF

High

Price per share in CHF
AverageLow

Value
in CHF thousands

Value 1 April 2017

947

Purchases at cost

7’516

1’779.78

1’344.65

919.76

10’208(7’811)

1’820.00

1’348.03

934.00(10’023)

8’078

1’714.36

1’277.98

935.44

10’445(7’935)

1’725.57

1’294.96

941.88(10’553)

Sales at cost
Value 31 March 2018

906

652

Purchases at cost
Sales at cost
Value 31 March 2019

795

1’091

983

In CHF

Ordinary dividend per share 2017/18

40.00

Ordinary dividend per share 2018/19

42.00

A dividend of CHF 42 per share will be proposed by the Board of Directors to the Annual General Meeting of Shareholdersof the Group on 27 June 2019. The expected payout for dividends amounts to CHF 47.9 million.

LEM Financial Report 18 | 19

Page 26

Notes to the consolidated
financial statements

16.

Staff costs
Notes

2018/192017/18
Restated

Production(27’013)(27’417)Sales(19’086)(19’870)

Administration(12’829)(12’686)

Research and development(15’931)(14’408)

Total(74’859)(74’381)

Salaries and wages(71’124)(68’967)

Temporary employee costs(2’365)(3’805)(1’255)(1’471)

In CHF thousands

Cost of defined benefit plans

23.1

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

(115)

(138)

(74’859)(74’381)31.3.2019

31.3.2018

Permanent employees

1’385

1’382

Temporary employees

83

139

Apprentices

9

7

1’477

1’527

2018/192017/18

(213)

Total

17.

Financial expenses

In CHF thousands

Interest expenses(127)

Other financial expenses

(52)

(85)

Total

(179)

(298)

2018/192017/18
Restated

18.

Financial income

In CHF thousands

Interest income on cash

155

143

Total

155

143

2018/192017/18(1’491)

1’608

73

(223)

19.

Exchange effect

In CHF thousands

Exchange gains / (losses)
Fair value revaluation on derivatives
Gains / (losses) on derivatives 1(1’101)

(40)

Total

(2’519)

1’345

1 Position includes cost of derivative hedging

The 2018/19 exchange effect is mainly driven by the losses on derivatives due to the USD revaluation and by the foreignexchange losses linked to EUR devaluation.

LEM Financial Report 18 | 19

Page 27

Notes to the consolidated
financial statements

20. 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 withstandchallenge 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. Changes to the financial statement’s 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 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 has taken the decision to repatriate all available dividends from its subsidiaries in the foreseeable future. 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.
2018/192017/18
Restated(12’044)(14’342)

1’850

4’661

In CHF thousands

Current income taxes
Deferred taxes relating to the origination and reversal of temporary differences
Adjustment recognized in the period for current tax of prior year
Total

318

(210)

(9’876)(9’891)

The tax income relating to components of other comprehensive income amounts to CHF 1’007 thousand for the year 2018/19(CHF –389 thousand in 2017/18 restated, CHF –485 thousand in 2017/18).
The Group’s effective tax rate differs from the Group’s average expected tax rate as follows:
2018/192017/18
RestatedGroup’s average expected income tax rate

15.0

12.0

Group’s average expected withholding tax rate

1.6

1.2

Group’s average expected tax rate

16.6

13.2

In %

Tax effect ofpermanent differences(0.2)

effect of changes in tax rates on deferred taxes

0.1
1.9

adjustment in respect of previous periods’ income tax(0.5)

other differences(0.1)

Group’s effective tax rate

15.9

0.6
15.7

Last year the Group income tax rate was positively impacted by a deferred tax asset of CHF +4.3 million linked to the Intellectual
Property sale from LEM Intellectual Property to LEM Electronics China. This was partially compensated by the change of thedeferred tax rate of LEM China from 25 % to 15 %, resulting in a deferred tax expense of CHF –0.9 million.
In 2018/19 the High New Technology Enterprise (HNTE) certificate was granted to LEM Electronics China Co. Ltd, enabling theGroup to maintain the stability of its effective tax rate.

LEM Financial Report 18 | 19

Page 28

Notes to the consolidated
financial statements

Deferred tax assets and liabilities
Deferred taxes have been calculated on the following balance sheet positions:31.3.2019
Asset

In CHF thousands

Accounts receivable
Inventories

31.3.2018
Restated
Liability

Asset

1.4.2017
Restated
Liability

Asset

Liability

87

(68)

80

(91)

74

(38)

1’220

(632)

979

(292)

1’393

(240)

Property, plant and equipment

2’366(1’416)

1’716

(868)

1’322

(114)

Intangible assets

13’491(2’956)

13’578(2’128)

149

(484)

(243)

294

Other financial assets
Tax losses carried forward

336

Other assets

491
(615)

Provisions

270

Others149

1’102

Withholding tax on dividends

620(3’251)Gross deferred taxes

18’872933(616)(8’938)(138)
312(3’549)767(2’429)17’613(27)(1’532)(10’216)

5’246(2’572)31.3.2019

31.3.2018
Restated

1.4.2017
Restated

The balance sheet contains the following:

Deferred tax assets

13’49414’189

4’555

Deferred tax liabilities(3’559)(6’793)(1’881)

9’934

7’397

2’674

Net assets

LEM Group has CHF 336 thousand (CHF 491 thousand in 2017/18) of deferred tax asset on tax losses. The Group expects thatthe concerned subsidiaries will be able to only partially use the tax losses against future taxable profit. On this basis, a partof the tax losses has not been recognized as deferred tax assets.
At 31 March 2019, the unrecognized losses carried forward are the following:
Unused tax loss carry-forwards not recognized in the balance sheet expire
In CHF thousands

In the next 7 years

31.3.2019

31.3.2018

3’787

1’572

3’787

1’572

Without date of expiration
Total

LEM Financial Report 18 | 19

Page 29

Notes to the consolidated
financial statements

21.

Earnings per share2018/192017/18
Restated

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

52’37654’428

Ordinary 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

693

418

1’139’307

1’139’582

45.97

47.76

Weighted average number of shares outstanding
Earnings per share – basic and diluted in CHF

22. 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 2018/19 and 2017/18, 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 effected in cash.
Compensation of the Board of Directors
2018/19

In CHF thousands

2017/18

Annual fees

(850)

(870)

Total

(850)

(870)

2018/192017/18

Compensation of the Executive Management
In CHF thousands

Base salary(1’070)(1’440)

Bonus

(790)

(1’851)Company’s contribution to pension fund

(112)

(161)

(1’972)(3’452)

Total

Servotronix Motion Control Ltd, a company presided over by Ilan Cohen, bought transducers for CHF 897 thousand in 2018/19(CHF 1’155 thousand in 2017/18), including purchases made by its subsidiaries and subcontractors, from LEM Group at market
price. No other 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 Financial Report 18 | 19

Page 30

Notes to the consolidated
financial statements

23. 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 having equal representationof employees and employers of the affiliated companies. It is supervised by the supervisory authority and complies with therequirements of Swiss pension law. The company’s liabilities are limited to contributions that are based on a percentage of theinsured salary under the Swiss law. According to Swiss law, the pension plan qualifies as a defined benefit plan under IAS 19
due to the various benefit guarantees included in the laws.
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 isbased on a notional individual savings account converted at retirement into a fixed pension benefit.
The assets of the foundation are invested into 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. No curtailments
or settlements occurred in 2018/19.
The funded status decrease of CHF –3.8m is the result of the assumptions and demographic changes generating an increaseof the DBO of CHF +3.7m. The following main assumptions have been updated:–– discount rate from 1 % to 0.6 %;–– interests credited on savings account from 1 % to 0.6 %;–– salary increase rate remains stable at 1 %.
The before-mentioned updates generated a net DBO increase of CHF +2.5m.
In application 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 practices and regulations. A former employee in Germany benefits from a defined benefit obligation amounting to CHF 377 thousand at 31.3.2019.
Other subsidiaries’ defined benefit obligations in Japan, Bulgaria and Italy amount to CHF 450 thousand at 31.3.2019.
31.3.2019

31.3.2018
Restated

1.4.2017
Restated

Fair value of plan assets at year-end

42’69142’71646’873

Defined benefit obligations at year-end

44’55640’82247’556

Funded status (net (liabilities)/assets in the balance sheet)(1’865)

1’894

(683)

2017/18
Restated

1.4.2017
Restated

In CHF thousands

LEM expects to contribute CHF 2’454 thousand to its defined benefit plan in 2019/20.
23.1 Cost of defined benefit plans
2018/19
In CHF thousands

Current service cost

2’624

2’714

2’821

Past service cost

(1’370)(1’242)(2’232)

Net interest (income) / cost
Total pension expenses recorded in consolidated income statement

(19)

5

22

1’236

1’476

610

Costs related to the pension plan were charged to the different functional departments based on salary costs.
Past service costs result from a change in conversion rate, refer to note 3.

LEM Financial Report 18 | 19

Page 31Notes to the consolidated
financial statements

23.2 Remeasurements of employee benefits
2018/19
In CHF thousands

Experience adjustments on defined benefit obligation

2017/18
Restated

1.4.2017
Restated

3’811

245

(866)

947

(1’952)(1’016)

4’758(1’707)(1’881)

31.3.2019

31.3.2018
Restated

1.4.2017
Restated

Fair value of plan assets as per beginning of year

42’71646’87346’298Return on plan assets excluding interest income

(947)

1’952

1’016

427

328

231

2’235

2’346

2’406

Return on plan assets excluding interests
Total remeasurements recorded in other comprehensive income

23.3 Change in fair value of plan assets
In CHF thousands

Interest income on plan assets
Employer’s contributions
Employees’ contributions

1’868

1’983

2’077

Benefits paid

(3’608)(10’766)(5’156)

Fair value of plan assets as per end of year

42’69142’71646’87331.3.2019

31.3.2018
Restated

1.4.2017
RestatedDefined benefit obligation as per beginning of year

40’82247’55650’659Current service cost

2’624

2’714

2’821

Past service cost

(1’370)(1’242)(2’232)

1’868

1’983

2’077

408

333

253

3’811

245

(866)

due to assumption changes

2’510(1’491)(1’489)due to demographic changes

1’301

1’736

623

Benefits paid

(3’608)(10’766)(5’156)

Defined benefit obligation per end of year

44’55640’82247’55623.4 Change in present value of defined benefit obligation
In CHF thousands

Employees’ contributions
Interest cost
Actual (gains) / losses

The weighted average duration of the Defined Benefit Obligation (DBO) at the end of the current fiscal year is 26 years.
Past service costs result from a change in conversion rate, refer to note 3.
23.5 Asset allocation of investments
Major categories of plan assets as a percentage of the fair value of total plan assets
Long-term target

2018/19In %2017/18
Restated

1.4.2017
Restated

Equity securities

32.0 %

32.5 %

30.4 %

34.3 %

Debt securities

33.0 %

28.6 %

25.0 %

24.3 %

Real estate25.0 %

28.3 %

27.7 %

27.7 %Cash and other investments

10.0 %

10.6 %

16.9 %

13.8 %

100.0 %

100.0 %

100.0 %

100.0 %LEM Financial Report 18 | 19

Page 32

Notes to the consolidated
financial statements

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. Other assets, including realestate and other investments, do not have a quoted market price.
23.6 Actuarial assumptions
2018/192017/18
Restated

1.4.2017
Restated

Discount rate

0.60 %

1.00 %

0.70 %

Salary increases

1.00 %

1.00 %

0.50 %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.
Sensitivities of significant actuarial assumptions
The sensitivity analysis is based on reasonable possible changes as of the end of the year 2018/19. 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:
2018/192017/18
Restated

1.4.2017
Restated

Increase by 0.25 %(2’443)(2’279)(2’542)

Decrease by 0.25 %

2’640

2’460

2’739

DBO increase / DBO (decrease) – In CHF thousands

Discount rate

Salary increase rate
Increase by 0.25 %

200

184

218

Decrease by 0.25 %

(196)

(179)

(311)

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

1’080

in 2 years

1’101

in 3 years

1’172

in 4 years

1’223

in 5 years

1’245

in 6 to 10 years

7’567

LEM Financial Report 18 | 19

Page 33

Notes to the consolidated
financial statements

24. Operating lease commitments
Minimal lease payments are payable as follows:
31.3.2019

31.3.2018

Within 1 year

5’336

4’868

Between 1 and 5 years

5’643

2’551

In CHF thousands

Beyond 5 years
Total

160

143

11’139

7’563

In 2018/19 lease expenses amounted to CHF 5’646 thousand (2017/18 CHF 5’263 thousand). Lease agreements exist for thebusiness facilities used by the Group companies. The agreements are classified as operating leases. The leases have varying
terms and renewal rights between one and fifteen years.

25. 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. For the years 2017/18 and 2018/19, there is no contingent liability from a consolidated pointof view.

26. Financial risk management objectives and policies
The group classifies its financial assets and liabilities in the following categories as per IFRS 7:
Financial assets
31.3.2019
Fair value

31.3.2018
Fair value

Amortized
cost

Cash and cash equivalents

12’538

17’630X

Accounts receivable

68’65166’648

X

80

215

X

Other noncurrent financial assets

1’036

906

X

Total

82’30485’399In CHF thousands

Other current financial assets

At fair value
through
profit andloss

Financial liabilities
31.3.2019
Fair value

31.3.2018
Fair value

Accounts payable

22’76025’718X

Accrued expenses

26’047

26’359X

In CHF thousands

Derivative financial instruments – current
Other current financial liabilities
Other noncurrent financial liabilities
Total

LEM Financial Report 18 | 19

Page 34

Other financial liabilities

168

241

8’000

5’000

X

14

90

X

56’98957’408

At fair value
through
profit andloss

XNotes to the consolidated
financial statements

Changes in liabilities arising from financing activities

1.4.2017

In CHF thousands

Interest-bearing loans and borrowings

Cash impact

Non-cash
impactCash flows
Inflow/(Outflow)

Fair values
changes andOthersCurrency
effect5’000

Derivative financial instruments

18

Total

18

In CHF thousands

Interest-bearing loans and borrowings
Derivative financial instruments

5’000
223

241

5’000

223

5’241

Cash impact

Non-cash
impact

1.4.2018

Cash flows
Inflow/(Outflow)

Fair values
changes andOthers

5’000

3’000

241

Total

31.3.2018

5’241

3’000

Currency
effect31.3.2019
8’000

(73)

168

(73)

8’168

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 approximates their book value.
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 168 thousand per 31 March 2019 (financial liabilities of CHF 241 thousand per 31 March 2018), 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 Financial Report 18 | 19

Page 35

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 seeks to reduce those risks by optimizing its natural hedging (cash inflows and outflows in a specific currency
should be in balance 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 2019 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 ±788 thousand for a ±5 % EUR rate change(CHF ±762 thousand per 31 March 2018), of CHF ±561 thousand for a ±5 % USD rate change (CHF ±568 thousand per 31 March2018), of CHF ±1’130 thousand for a ±5 % CNY rate change (CHF ±1’181 thousand per 31 March 2018) and of CHF ±127 thousand
for a ±5 % JPY rate change (CHF ±157 thousand per 31 March 2018). For other currencies, there is no significant impact. Thereis 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. The accounts receivable 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 6. There are no significant concentrations of risk within theGroup. 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 default of thecounterparty, with a maximum exposure equal to the carrying amount of these positions.
Liquidity risk
The Group operates a cash-pooling agreement in which cash targets are set for all the subsidiaries. Cash surplus / shortages arebalanced in intercompany loans on a monthly basis. Group capital requirements are managed centrally by corporate finance.
In case liquidity is required a bank loan is either taken up centrally and passed on as an intercompany loan, or given directly by
the bank to the subsidiary with a reduction of the Group’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.
31.3.2019
Fair value

In CHF thousands

Less than
one yearOver oneyear

31.3.2018
Fair valueLess than
one yearAccounts payable

22’76022’76025’71825’718

Accrued expenses

26’04726’047

26’35926’359Derivative financial instruments – current
Other current financial liabilities
Other noncurrent financial liabilities

168

241

241

8’000

5’000

5’000

14

Total

LEM Financial Report 18 | 19

168
8’000
56’989Page 36

56’9751490

14

57’408Over oneyear

90
57’31890

Notes to the consolidated
financial statements

Interest rate risk
The Group’s exposure to the risk of changes in market interest rates with the current financial leverage is low. Per 31 March
2019, the bank credit line amounts to CHF 8 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 to it, in light of changes in the economic 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.

27.

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 Intellectual Property SA

Switzerland

CHF

300’000

100 %LEM Switzerland SA

Switzerland

CHF

1’000’000

100 %LEM Tech France SAS

FranceEUR

50’000100 %LEM Bulgaria EOOD

Bulgaria

BGN

1’971’000

100 %LEM Russia Ltd

RussiaRUB

16’400’000

100 %Switzerland

CHF

20’000

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 %LEM Management Services SARL
North America
LEM USA Inc.
Asia

28. Changes in scope of consolidation
In 2018/19, there were no changes in the scope of consolidation.

29. 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.

LEM Financial Report 18 | 19

Page 37

Auditor’s report

Statutory auditor’s 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 the consolidated statement of financial position as at 31 March 2019 and the consolidated statement ofincome, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including asummary of significant accounting policies.
In our opinion, the consolidated financial statements (pages 4 to 37) give a true and fair view of the consolidated
financial position of the Group as at 31 March 2019, and its consolidated financial performance and its consolidated
cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and comply
with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss AuditingStandards. 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 accordance with the provisions of Swiss law and the requirements of the Swiss
audit profession, as well as the IESBA Code of Ethics for Professional Accountants, and we have fulfilled our otherethical 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 theconsolidated 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 each matter below, our description of how our audit addressed the matter is provided inthat 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 theperformance 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 matters below, provide the basis for our audit opinion on the consolidated financial statements.

LEM Financial Report 18 | 19

Page 38

Auditor’s report

Uncertainties regarding Income taxes and transfer pricing
Area of focus
The Group operates in multiple jurisdictions with complex legal and tax regulatory environments that are constantly changing and require more compliance efforts. The country-specific tax risks could result in potential material
amounts payable.
Management monitors these tax risks primarily at corporate level, including the significant level of estimations andjudgments made with respect to the likelihood and magnitude of these risks. In certain of these jurisdictions, theGroup has taken tax positions on income taxes and transfer pricing that management believes are supportable.
Due to the significance of the deferred tax balances and other tax positions and the judgment involved in determining these, this matter was considered significant to our audit. Refer to note 20 of the consolidated financial
statements for further information.
Our audit response
Our procedures included, among others, assessing the tax rules in the various jurisdictions in which the Company
operates and assessing the management’s assumptions and estimates in relation to uncertain tax positions, current income tax and deferred taxes.
We involved our tax specialists to assist in assessing the Company’s tax methodologies and analyzing the underlying key assumptions, including the advice received by management from external parties to support their position.
We audited the current year tax provision, the Company’s reconciliation of book to taxable income as well as thedeferred tax balances, and evaluated whether the assumptions applied by management on the recoverability ofdeferred tax assets is consistent with its budget and forecasts. Our audit procedures did not lead to any reservations regarding income taxes and transfer pricing.

Measurement of defined benefit obligation and accounting for an error identified in 2018/19
Area of focus
The Group has defined benefit pension plans in five different countries, of which the one in Switzerland is significant to the Group. The Swiss plan consists of plan assets amounting to CHF 42.7m and defined benefit obligationsof CHF 44.6m leading to a funded status of net CHF 1.9m (net liability) as of 31 March 2019. LEM has joined amulti-employer plan to insure its employees against the risks of old age, disability and death as required by Swisslaw. The valuation of the pension liabilities requires significant levels of judgment and technical expertise in choosing appropriate assumptions and to determine the defined benefit obligation. Many of those assumptions have amaterial impact on the calculation of the liability. Certain changes of actuarial assumptions are recorded in othercomprehensive income, other changes like past service cost in the income statement. In 2018/19, management
identified an error in an assumption used to assess the defined benefit obligation. The multi-employer plan had decreased the conversion rate in each of the two previous years and in the current year from 6.1 % to 5.4 % now, andthis decrease was not reflected in the consolidated financial statements. LEM has therefore restated the balance
sheets as of 31 March 2017 and 2018 and the income statement 2017/18 to correctly reflect the gradual reductionof the conversion rates as required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

LEM Financial Report 18 | 19

Page 39

Auditor’s report

Our audit response
We evaluated management’s assessment of the assumptions made in relation to the measurement of the defined
benefit obligation and the fair value assessment of plan assets. The assumptions and calculations made to assess
the funded status are disclosed in note 23. We discussed the report of the external actuary with the responsible
experts to obtain an understanding particularly of the impact of the conversion rates used in previous and thecurrent year. We also discussed all other parameters that are used to determine the defined benefit obligation, themethod to assess the fair value of the plan assets and therefore to calculate the net funded status in the balance
sheet of each respective year.
We reviewed the updated calculations obtained for the two previous periods and determined whether the errors
reflected in the actuarial reports were adjusted in the prior year balance sheets as of 31 March 2017 and 2018 andthe income statement 2017/18. Moreover, we reviewed whether all required disclosures of IAS 8 were made in the
2018/19 financial statements. Our audit procedures did not lead to any reservations regarding the measurement of
the defined benefit obligation and accounting for the error identified in 2018/19.
Other information in the annual report
The Board of Directors is responsible for the other information in the annual report. The other information comprises all information included in the annual report, but does not include the consolidated financial statements, thestand-alone financial statements and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in the annual report and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information in the annual report and, in doing so, consider whether the other information is materially inconsistent withthe 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 thisother information, we are required to report that fact. We have nothing to report in this regard.
Responsibility of the Board of Directors for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a trueand fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of
Directors determines is necessary to enable the preparation of consolidated financial statements that are free frommaterial 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 to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of 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.

LEM Financial Report 18 | 19

Page 40

Auditor’s report

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 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 inaccordance with Swiss law, ISAs and Swiss Auditing Standards 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 the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located at
the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This description
forms part of our auditor’s report.
Report on other legal and regulatory requirements
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal
control system exists, which has been designed for the preparation of consolidated financial statements according
to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
To the General Meeting of LEM HOLDING SA, Fribourg
Lancy, 16 May 2019
Ernst & Young Ltd

Roland Ruprecht
Licensed audit expert(Auditor in charge)

Victoria Napoly
Licensed audit expert

LEM Financial Report 18 | 19

Page 41

Corporate governancereport

The following information complies with the Corporate Governance Directive 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 otherparts 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 Avenue Beauregard 1, CH-1700 Fribourg. 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 2019, the market capitalization
was CHF 1’459 million. LEM Group is structured into Industry and Automotive segments. Appropriate segment reporting pursuant to IFRS is contained in note 4 of the consolidated financial statements. All companies in LEM Group are listed under “Scopeof consolidation” in note 27 of the consolidated financial statements, with their respective company names, registered offices,
share capitals 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:

31.3.2019

31.3.2018

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

574’500

50.4 %

570’14850.0 %

Ruth Wertheimer, in Kfar Shmaryahu, Israel, through7-Industries Holding B.V., in Amsterdam, Netherlands

141’58112.4 %

141’58112.4 %

Columbia Threadneedle, London, United Kingdom

48’142

4.2 %27’522

2.4 %J. Safra Sarasin Investmentfonds AG, Basel, Switzerland

36’0003.2 %36’0003.2 %Total shareholders < 3 %339’777

29.8 %

364’749

32.0 %

1’140’000

100.0 %

1’140’000

100.0 %

In number of shares, per cent of shareholding

Total

Shareholdings of
non-executive Directors

Shareholdings of
Executive Management
31.3.2019
Number ofshares held

31.3.2018
Number ofshares held

Andreas Hürlimann

1’001

1’001

François Gabella

600

600

Ilan Cohen

300

300

69’50068’010100

0Ueli Wampfler
Ulrich Jakob Looser
Werner C. Weber
Total

0

0

71’501

69’911

31.3.2019
Number ofshares held

31.3.2018
Number ofshares held

Frank Rehfeld, CEO & SVP Industry

00Andrea Borla, CFO

00Rainer Bos, SVP Automotive

0

0

Total

0

0

The notifications which have been sent to the Company and the disclosure office of the SIX Swiss Exchange AG during the

LEM Financial Report 18 | 19

Page 42Corporate governancereportfinancial year pursuant to article 120 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.six-exchange-regulation.com/en/home/publications/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
Capital 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. There are no shares with preferred voting rights. All shareholders are entitledto the same dividends. There are no restrictions on the transfer of shares. In order to be registered in the share register, eachshareholder shall declare that he/she holds the shares for their own account.
On 31 March 2019, LEM HOLDING SA held 795 treasury shares.
Authorized and conditional capital
There is no authorized or conditional capital, nor are there any profit-sharing certificates or participation in certificates or any
convertible bonds outstanding.

3.
The Board of Directors’ election, terms of office and cross-involvement
The Board of Directors is comprised 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. 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 28 June 2018, Andreas Hürlimann, Ilan Cohen, Ueli Wampfler, Ulrich J. Looser and WernerC. Weber were re-elected and François Gabella was 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 and Ulrich J. Looser to
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.
Ilan Cohen is President of Servotronix Motion Control Ltd, which has bought transducers for CHF 897 thousand in 2018/19 (CHF
1’155 thousand in 2017/18), including purchases done by its subsidiaries and subcontractors, from LEM Group at market price.
No other member of the Board of Directors has any significant business connection with LEM Group.
The Board of Directors was comprised of the following members as of 31 March 2019:

LEM Financial Report 18 | 19

Page 43

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

Nationality Swiss
Born in 1964–– Vontobel Sustainable Real Estate Investments SICAV, Zürich,
Chairman of the Board of Directors–– Condis SA, Rossens, Member of the Board of Directors–– Sobrado Software AG, Cham, Chairman of the Board of Directors–– ElectricFeel AG, Zürich, Member of the Board of Directors

Professional background

Andreas Hürlimann

Other notable activities–– 2005 – 2010, Managing Director,
Spencer Stuart, Zürich
–– 1999 – 2005, Global Director of Industry
Practices and Member of the Executive
Board, Arthur D. Little Inc., Zürich,
Lisbon, London and Paris–– Novo MOF AG, Villigen, Member of the Board of Directors–– themissinglink ag, Cham, Member of the Board of Directors
Education–– M. Sc. Electrical Engineering, ETH Zürich, Switzerland–– DAS Finance, University of Zürich, Switzerland–– 1990 – 1999, international business development, sales and management roles
with Siemens Schweiz AG, ABB Power
Generation AG and Oerlikon Aerospace
Inc., Zürich, Baden, Montréal

Position
Member of the Board of Directors

Other notable activities

Entry
2018

–– Winterthur Instruments AG, Winterthur,
Chairman of the Board of Directors

Professional background–– Optotune AG, Dietikon, Member of the Board of Directors,–– 2010 – 2018, CEO, LEM Group–– Switzerland Global Enterprise, Zürich,Member of the Advisory Board–– 2006 – 2010, CEO, Tesa SA–– 2002 – 2006, SVP, Areva

François Gabella–– 1996 – 2002, Business Area Manager,
ABB Power Transformers

Nationality Swiss
Born in 1958–– Vice President of Swissmem, Zürich

–– Fischer Connectors SA, Saint-Prex,
Member of the Board of Directors–– Sonceboz SA, Sonceboz, Member of the Board of Directors–– Sensirion AG, Stäfa, Member of the Board of Directors,
elected on 14.5.2019
Education–– M. Sc. Microtechnics EPFL, Lausanne, Switzerland–– MBA IMD, Lausanne, Switzerland

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

Other notable activities

Entry
2010

–– Negba Houses for Children at Risk in Israel, Chairman of the Board

Professional background–– Ph.D. Control System, Ecole Polytechnique de Bruxelles, Belgium–– Since 2010, President,
Servotronix Motion System Ltd.

Ilan Cohen
Nationality Israeli
Born in 1956–– 2008 – 2009, General Manager,
Kollmorgen Industrial & Commercial Engineered Solutions Ltd. (Danaher Group)–– 1997 – 2008, President and CEO,Kollmorgen Servotronix Ltd.
–– 1987, Founder, Servotronix Ltd.
–– 1983 – 1990, Associate professor,
University of Tel Aviv, Israel

LEM Financial Report 18 | 19

Page 44–– Servotronix Motion Control Ltd., Israel,
Member of the Board of Directors
Education–– MSEE, CALTECH Pasadena, USA–– M.Sc. and BSEE Electro-mechanical engineer,
Ecole Polytechnique de Bruxelles, BelgiumPosition
Member of the Board of Directors, Chairmanof the Nomination and Compensation
Committee, Member of the Audit and Risk
Committee

Ueli Wampfler
Nationality Swiss
Born in 1950

Werner C. Weber
Nationality Swiss
Born in 1960–– Kardex AG, Member of the Board of Directors–– u-blox AG, Member of the Board of Directors–– Spross Entsorgungs Holding AG, Member of the Board of Directors

Professional background

Nationality Swiss
Born in 1957–– Straumann Holding AG, Member of the Board of Directors–– Bachofen Holding AG, Chairman of the Board of Directors

Entry
2015

Ulrich J. Looser

Other notable activities–– 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)–– University of Zürich, Member of the University Council–– Economiesuisse, Member of the Board–– University Hospital Balgrist, Member of the Board–– Swiss-American Chamber of Commerce–– Swiss National Science Foundation,
Member of the Executive Committee of the Foundation Council
Education–– 1987 – 2001, McKinsey & Company, industry, energy, pharma and public sector
practices, partner election 1993–– M.Sc. Physics, ETH Zürich, Switzerland

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

Other notable activities

Entry
2007

–– Arcotempo Holding AG, Cham, Chairman of the Board of Directors–– M.A. HSG, University of St. Gallen, Switzerland–– Swisa Holding AG (Swisa Group), Cham,
Chairman of the Board of Directors

Professional background–– Merbag Holding AG (Merbag Group), Cham,
Vice Chairman of the Board of Directors–– Since 2004, Founder and Senior Partner,
Wampfler & Partner AG, Zürich

–– Caspar Finanz AG (Traco Power Group), Baar,
Member of the Board of Directors–– 1998 – 2004, Director, STG Schweizerische Treuhandgesellschaft, Zürich

–– Rebew AG, Zürich, Member of the Board of Directors–– 1974 – 1998, STG Coopers & Lybrand,
Zürich (Partner since 1991)–– Lic. oec., University of Zürich, Switzerland

Position
Member of the Board of Directors

Other notable activities

Entry
2017

–– weber schaub & partner ag, Zürich,Member of the Board of Directors

Professional background–– Arosa Bergbahnen AG, Arosa, Member of the Board of Directors–– Since 1998, weber schaub & partner ag,
Partner–– Schilthornbahn AG, Lauterbrunnen,
Member of the Board of Directors–– Prior thereto in particular Freddy Burger
Management Group in Zürich as LegalCounsel and General Secretary, andPricewaterhouseCoopers AG in Zürich as
Legal and Tax Counsel–– City Parkhaus Aktiengesellschaft, Zürich,Member of the Board of Directors

Education–– Certified auditor–– WEMACO Invest AG, Zug, Member of the Board of Directors–– MedioSearch AG, Bern / SkySmile AG, Zürich,Member of the Board of Directors
Education–– Dr. iur. University of Zürich, Switzerland–– Admitted as an attorney-at-law in Zürich, Switzerland–– Mediator SBA, Zürich, Switzerland

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Corporate governancereportExternal 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 the requestof 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, 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.
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 Fribourg. 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. As a rule the CEO and CFO attend the meetingsof the Board of Directors without having a right to vote. 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 the meetings including decisions taken are prepared by the CFO and distributed to the members of the Boardof 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 inputs 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 fullest extent permitted by the Swiss Codeof Obligations. The Board of Directors reviews and assesses at least on an annual basis and takes 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.

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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 tomitigate 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
have been identified. For each process, key risks that could lead to errors in the financial reporting have been identified. For
each key risk, key controls have been defined and responsibilities assigned to assure effective compliance and documentationof 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.

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Corporate governancereportCommittees
Three standing committees support the Board of Directors. They are comprised of at least two non-executive members of theBoard of Directors. They meet whenever necessary but at least twice a year.
–– 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, complianceand clarity of the Group financial reporting and the assessment and preparation of the financial reports to the shareholders.
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 at 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 the 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 andthe 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 todetermining 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 membersof the SC to assist in steering longer-term strategic initiatives by joining the project steering committee. In the completed
financial year, five half-day meetings and four telephone conferences were held.

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Page 48

Frank Rehfeld

Andrea Borla

Rainer Bos

4.
Executive Management
The Executive Management was comprised of the following members as of 31 March 2019:

Frank Rehfeld
Nationality German
Born in 1968

Function
CEO LEM Group & SeniorVice President Industry

Previous companies and positions

With LEM since2016–– 2006 – 2009, Managing Director, Hella Shanghai Electronics Co., Ltd.

–– 2016 – 2018, SVP Industry, LEM Group–– 2009 – 2015, VP Drives, Brose China 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

Andrea Borla
Nationality Swiss
Born in 1967

Function
CFO LEM Group

Previous companies and positions

With LEM since2015–– 2003 – 2007, Field Operations Manager, Schindler China–– 2008 – 2015, CFO, Schindler France–– 1999 – 2003, Area Controller, Schindler Asia Pacific–– 1996 – 1999, Head of Group Consolidation, SAirGroup
Education–– Ph.D., M.A. HSG, Finance and Accounting, St. Gallen, Switzerland

Rainer Bos
Nationality German
Born in 1962

Function
Senior Vice President
Automotive

Previous companies and positions

With LEM since2015–– 1991 – 1999, Key Account Manager, Continental-Teves KGaA–– 2011 – 2015, General Manager, Amphenol Tuchel Electronics GmbH–– 2001 – 2011, Business Unit Director, Delphi Deutschland GmbH
Education–– Dipl. Eng. Industrial Engineering, TU Darmstadt, Germany

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Corporate governancereportNone 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 beregistered 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.

5.
Compensation
Please refer to the compensation report on page 52.

6.
Shareholders’ participation rights
The rules on shareholders’ participation rights are outlined in the Articles of Incorporation. The rules for the convening ofGeneral Meetings, the participation rights and the majority rules for decisions all follow Swiss law. The complete Articles ofIncorporation can be downloaded from the Investor Relations pages on the website. http://www.lem.com/images/stories/files/
HQ/en/Investors/AGM Docs/2014/LEM_Holding_SA_Articles_of_Association_26062014.pdf
Voting rights and representation restrictions and inscription 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 he/she expressly declares that the shares have been bought and will be 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
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.
AgendaAccording 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 and submit matters to be placed on the agenda.

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Corporate governancereportDividend 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 his 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.

8.
Auditors
The duration of the auditors’ mandate is one year. Ernst & Young has been auditing LEM since the financial year 2005/06, with
Roland Ruprecht bearing the responsibility for the audit since 2018/2019. 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 the majority of LEM’s Group
companies in Switzerland and abroad. The audit fees and fees for additional services are as follows:
Type of service
In CHF thousands

Audit fees

2018/192017/18

350

350

350

365

Additional fees

15

Total

Evaluation and control of the auditors is done by the ARC, which makes recommendations to the Board of Directors. In particular, the ARC evaluates the performance, the fees and the independence of the auditors.
The auditors 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 the external auditors.
During 2018/19 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 (http://www.lem.com/en/investors) and may be obtained in print 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.
Contact for investors and media: Andrea Borla, CFO, Chemin des Aulx 8, CH-1228 Plan-les-Ouates, or send an e-mail toinvestor@lem.com (phone: +41 22 706 12 50).

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Compensation report

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 remuneration policies. Our compensation policies are designed to align theinterests of Executive Management and the Board of Directors with the interest 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 approvalof 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).
The compensation report is based on section 5 of the annex to the Corporate Governance Directive issued by SIX Swiss Exchange and Art. 13 to 17 of the Ordinance Against Excessive Compensation in Listed Stock Companies (OaEC).
The compensation authorities are summarized in the following table:
Beneficiary

Compensation element

ProposalApproval

BoD and Executive Management

Compensation principles

NCC

BoD

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 proposal

Annual General Meeting(prospective approval)

Executive Management

Aggregate amount short-term
incentive

BoD based on NCC proposal

Annual General Meeting(retrospective approval)

Executive Management

Aggregate maximum amountlong-term incentive

BoD based on NCC proposal

Annual General Meeting(prospective approval)

Executive Management

Individual compensation

NCC based on proposal from CEO

BoD

CEO

Individual compensation

Chairman of the BoD

BoD

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 any related work such as Committee activity.
Compensation of the Executive Management
In order 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.

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Compensation report1.
Board of Directors
1.1
General principles for compensation of non-executive Directors
The 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 NCC. The remuneration of the Board of Directors consists of a fixed cash payment andis reviewed on an annual basis. The remuneration compensates for the personal responsibility and exposure as a non-executive
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 Remuneration of non-executive Directors
The Board of Directors adopted a remuneration scheme with a fixed BoD membership fee paid in cash of gross CHF 250’000 for
the Chairman and CHF 80’000 for each member. Committee activity is compensated by membership fees of CHF 40’000 for theCommittee’s Chairman and CHF 20’000 for each member.
The tables below show the compensation per Board member in the financial years 2017/18 and 2018/19 for their term of office.
The Shareholders approved at the Annual General Meeting on 28 June 2018 a maximum compensation amount for the term ofoffice from the ordinary General Meeting 2018 until the ordinary General Meeting 2019 of CHF 1’100’000. The actual costs for
the Company are below at CHF 927’000.

2018/19
In CHF thousands

Annual fees (A)Total compensation

Taxes, social security
charges and similar
contributions (B)Total (A) + (B)337

Andreas Hürlimann 1, 6, 7

310

310

27

Ueli Wampfler 3

120

120

11

131

Ulrich Jakob Looser 4, 5

140

140

13

153

Ilan Cohen 8, a

120

120

11

131

Werner C. Weber

80

80

7

87

François Gabella

80

80

7

87

Total

850

850

77

927

Annual fees (A)Total compensation

Taxes, social security
charges and similar
contributions (B)Total (A) + (B)2017/18
In CHF thousands

Andreas Hürlimann 1, 2, 6, 7

310

310

27

337

Ueli Wampfler 3

120

120

11

131

Ulrich Jakob Looser 4, 5

140

140

13

153

Norbert Hess 6

100

100

Ilan Cohen 8, a

120

120

11

131

100

Werner C. Weber

80

80

7

87

Total

870

870

69

939

a including the amount of CHF 20’000 for R&D

5 Chairman of the Nomination & Compensation Committee

contribution
1 Chairman of the Board
2 Vice Chairman of the Board
3 Chairman of the Audit & Risk Committee
4 Member of the Audit & Risk Committee

6 Member of the Nomination & Compensation Committee

LEM Financial Report 18 | 19

7 Chairman of the Strategy Committee
8 Member of the Strategy Committee

Page 53

Compensation report

2.
Executive Management
2.1 General principles for compensation of Executive Management
The aggregate remuneration of the Executive Management is approved by the Shareholders at the Annual General Meetingupon proposal by the Board of Directors. The proposals of the Board of Directors are based on NCC recommendations. The
remuneration of the Executive Management is reviewed 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 and competencies

N/A

Prospective maximum
amount (October –September)

Short-term incentive

Annual cash
payment

Pay for annual
performance

Business and individual
performance throughout the financial year

0 % – 139 % oftarget amount

Retrospective

Long-term incentive

Annual cash
payment

Participation in sustainable company success,alignment with
Shareholder interests

Achieved value creation
over three consecutive
financial years

0 % – 200 % oftarget amount

Prospective maximum
amount for payout
three years later

Non-wagecompensation

Pensioncontributions

Protect against risks
plus retirement anddependents’ 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. Benchmarking is carried out periodically.
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 carried out on an annual basis by the NCC. All variable compensation is paid in cash and after approval by the Shareholders. The
Chairman of the BoD prepares objectives and performance evaluations for the CEO and the NCC for the other members of the
Executive Management based on a personal performance review.
Short-term incentive 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 bottom line indicators, quantitative or qualitative targets. At the end of the year, the performance of each objective is evaluated, resulting in the total amountto be paid.

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Compensation report

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 of target
setting and kept constant over the period. For each objective, the curve between minimum and maximum bonus level is defined.
Ambitious but achievable objectives are set as targets, at which 100 % of the respective target amount is attributed.
For Executive Management, the minimum payout of the short-term incentive is 0 % of the target amount and the weighted
maximum payout is 139 %.
The short-term incentive payout is presented for retrospective approval to the Shareholders along with the Annual Review and
Financial Report of the same financial year at the Annual General Meeting 2019 prior to being paid out.
Long-term incentive related to the sustainable financial performance of LEM GroupThe long-term incentive is defined as an annual target amount and is based on the performance of LEM evaluated over a periodof three consecutive financial years (2016/17 – 2018/19). The performance criterion is the cumulated Economic Value Added(EVA) over these three financial years. The Board of Directors defines the EVA objective at the beginning of year one and theevaluation of the performance takes place at the end of year three. Once the forward-looking EVA objective is defined, this EVA
objective remains unchanged over the three-year period.
For Executive Management, the minimum payout of the long-term incentive is 0 % of the target amount and the maximum
payout is 200 %.
For the long-term incentive cycle 2016/17 to 2018/19, the maximum amount approved prospectively by the Shareholders at theAnnual General Meeting in 2016 is CHF 851’000 for payout in 2019.
2.1.3 Non-wage compensation of Executive Management
For Executive Management, non-wage compensation consists of pension plans (retirement benefits) only.
Executive Management benefits from LEM’s Swiss pension plan, considered a defined contribution plan under Swiss law thatprovides 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 insured Executive.

LEM Financial Report 18 | 19

Page 55

Compensation report

2.2 Remuneration of Executive Management

2018/19
Total
compensation

Company’scontribution tosocial security
charges

46

860

73

66

1’112

94

269

112

1’972

167

Short-term
incentive3

Long-term
incentive

Company’scontribution
to pension fundTotalcompensation

Company’scontribution tosocialsecurity charges

Long-term
incentive

Company’scontribution
to pension fund

265

99

256

170

521

Base salary

Short-term
incentive

Frank Rehfeld, CEO450

Executive management (excl. CEO)

620
1’070

In CHF thousands

Total

2017/18

In CHF thousands

Base salary

François Gabella, CEO

520

416

486 1

66

1’488

128

Executive management (excl. CEO)

920

634

266

95

1’915

164

Former Executive Management 2
Total

49
1’440

1’050

801

161

49

4

3’452

296

1 Also includes pro-rata payments under the long-term incentives 2016/17 – 2018/19 and 2017/18 – 2019/20.
2 The long-term incentive 2015/16 – 2017/18 amount of former members of the Executive Management paid out in 2017/18 corresponds to their activity in the Executive Management.

(This is the last year this applies.)
3 Including
an additional one-time payment beyond the regular short-term incentive plan.

LEM Financial Report 18 | 19

Page 56

Compensation report

The amounts are shown as follows:–– Base salary: as paid out in the reporting period–– Short-term incentive 2018/19: as proposed to the Annual General Meeting in June 2019 for payout in July 2019–– Long-term incentive: as accrued for or paid out during the reporting period–– Pension fund contributions: as accrued for or paid during the reporting period–– Company’s contributions to social security charges: 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 2018 to 30 September 2019): CHF 1’800’000–– Maximum amount long-term incentive 2016/17 for payment in 2019: CHF 851’000–– Maximum amount base salary (for the period from 1 October 2017 to 30 September 2018): CHF 1’800’000 (based onfour Executive Management members)–– Short-term incentive amount for 2017/18 for payment in 2018: CHF 1’144’664–– 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
2.3 Compensation of former members and related parties
In the financial year 2018/19, the former CEO François Gabella provided consulting services during the period from 1 April to 28
June 2018 for a total fixed compensation of CHF 30’000.
Apart from the LTI disclosed in 2.2., no compensation has been paid in the financial year 2017/18 to former members or relatedparties.

3.
Loans to current and former members of the Board of Directors and Executive Management and related parties
Our Articles of Association do not provide the basis to grant loans to current or former members of the Board of Directors,
the Executive Management or to any related party. Therefore, no loans have been granted in the financial years 2018/19 and2017/18 or in any previous year.

LEM Financial Report 18 | 19

Page 57

Auditor’s report

Report of the statutory auditor on the compensation report
We have audited the compensation report of LEM HOLDING SA for the year ended 31 March 2019. The audit waslimited to the information according to articles 14–16 of the Ordinance against Excessive Compensation in Stock
Exchange Listed Companies (Ordinance) contained in note 1.2 on page 53 and in notes 2.2 to 2.3 on pages 56 to 57
of the compensation report.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the compensation report inaccordance with Swiss law and the Ordinance. The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the compensation report. We conducted our audit in accordance with
Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the compensation report complies with Swiss law and articles
14–16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the compensation reportwith regard to compensation, loans and credits in accordance with articles 14–16 of the Ordinance. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in thecompensation report, whether due to fraud or error. This audit also includes evaluating the reasonableness of themethods applied to value components of remuneration, as well as assessing the overall presentation of the compensation report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
OpinionIn our opinion, the compensation report for the year ended 31 March 2019 of LEM HOLDING SA complies with Swisslaw and articles 14–16 of the Ordinance.
To the General Meeting of LEM HOLDING SA, Fribourg
Lancy, 16 May 2019
Ernst & Young Ltd
Roland Ruprecht
Licensed audit expert(Auditor in charge)

Victoria Napoly
Licensed audit expert

LEM Financial Report 18 | 19

Page 58

LEM HOLDING SA

Balance sheet(before distribution of earnings)

Assets
Notes

In CHF thousands

31.3.2019

31.3.2018

Current assets
Cash and cash equivalents

1’530

2’074

Loans to affiliated companies

68’47631’666

Current assets from affiliated companies

1’115

575

Other current assets

96

61

Total current assets

71’217

34’377

Noncurrent assets
67’98954’512

Total noncurrent assets

Investments in affiliated companies

1

67’98954’512

Total assets

139’206

88’88931.3.2019

31.3.2018

Liabilities and equity
Notes

In CHF thousands

Current liabilities
Current financial liabilities

8’000

5’000

Loans from affiliated companies

45’31328’065Current liabilities from affiliated companies

148

31

Other current liabilities

1’956

1’896

Total current liabilities

55’417

34’992EquityShare capital2

Legal reserves
Free reserves

570

570

285

285

– balance carried forward

8’571

22’234– profit for the year

75’34631’898Treasury shares(983)(1’091)

Total equity

83’78953’896

Total liabilities and equity

139’206

88’889LEM Financial Report 18 | 19

3

Page 60

Income statement

IncomeIn CHF thousands

Dividend from affiliated companies

Notes

2018/192017/18

4

73’87128’014

Interest income from affiliated companies
Foreign exchange gain

5

Other financial income

1’234

751

881

2’309

41

362

Other income from affiliated companies

6’343

5’993

Total income

82’37037’4292018/192017/18(3’337)(2’886)

ExpenseNotes

In CHF thousands

Office, administration and personnel expense
Financial expense
Foreign exchange loss

5

Total expense
Profit before taxes
Income taxes

6

Net profit for the year

LEM Financial Report 18 | 19

Page 61

(578)

(264)

(2’728)(1’884)(6’642)(5’034)75’72732’394

(382)

(496)

75’34631’898

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. Regarding the inclusion of LEM HOLDING SA in the consolidated financial statements, the accounting and reporting
principles described in the notes to the consolidated financial statements apply.
LEM HOLDING SA does and did not have any employees.

1.

Investments in affiliated companies
31.3.2019

In CHF thousands

31.3.2018

Historical cost

67’98954’512

Total

67’98954’512The increase in investments in affiliated companies is linked to the additional investment in LEM Electronics (China) Co. Ltd
for USD 14 million (CHF 13.5m).
Refer to note 27, Scope of consolidation of the consolidated financial statements.
The percentage of ownership corresponds to the percentage of voting rights.

2.

Share capital

Opening capital 1.4.2018

Number ofsharesPar value pershare in CHF

Capital in CHF
thousands

1’140’000

0.50

570

1’140’000

0.50

570

Change of capital
Closing capital 31.3.2019

3.

Treasury shares
Price per share in CHF
High

Average

Low

Value in CHF
thousands

7’516

1’779.78

1’344.65

919.76

10’208(7’811)

1’820.00

1’348.03

934.00(10’023)

NumberValue 1.4.2017

947

Purchases at cost
Sales at cost

906

Value 31.3.2018

652

Purchases at cost

8’078

1’714.36

1’277.98

935.44

10’445(7’935)

1’725.57

1’294.96

941.88(10’553)

Sales at cost
Value 31.3.2019

1’091

795

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.

LEM Financial Report 18 | 19

Page 62983

Notes to the consolidated
financial statements

4.
Dividend from affiliated companies
LEM Intellectual Property SA paid a dividend of CHF 37.7m in 2018/19, which explains the increase of dividend revenue in
2018/19.

5.

Exchange effect
2018/19

In CHF thousands

Exchange gains/(losses)

2017/18

(819)

687

73

(223)

Gains/(losses) on derivatives 1(1’101)(40)

Exchange effect(1’847)425

In CHF thousands

2018/192017/18

Current taxes

(457)

(457)

Fair value revaluation on derivatives 1

1 Position includes cost of derivative hedging.

6.

Income taxes

Adjustments of tax provisions of previous periods
Total

75

(39)

(382)

(496)

7.
Significant shareholders according to article 663c of the Swiss Code of Obligations
On 31 March 2019, the following shareholders held 3 % or more of the share capital and voting rights:
31.3.2019

31.3.2018

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

574’500

50.4 %

570’14850.0 %

Ruth Wertheimer, in Kfar Shmaryahu, Israel, through 7-Industries Holding B.V.,
in Amsterdam, Netherlands

141’58112.4 %

141’58112.4 %

In number of shares, percent of shareholding

Columbia Threadneedle, London, United Kingdom

48’142

4.2 %27’522

2.4 %J. Safra Sarasin Investmentfonds AG, Basel, Switzerland

36’0003.2 %36’0003.2 %339’777

29.8 %

364’749

32.0 %

1’140’000

100 %1’140’000

100.0 %

Total shareholders < 3 %Total

LEM Financial Report 18 | 19

Page 63

Notes to the consolidated
financial statements

8.

Guarantees in favor of third parties on behalf of subsidiaries
31.3.2019

31.3.2018

1’638

1’928

31.3. 2019
Number ofshares held

31.3.2018
Number ofshares held

Andreas Hürlimann

1’001

1’001

François Gabella

600

600

Ilan Cohen

300

300

69’50068’010Ulrich Jakob Looser

1000Werner C. Weber0071’501

69’911

31.3. 2019
Number ofshares held

31.3.2018
Number ofshares held

Frank Rehfeld, CEO & SVP Industry

00Andrea Borla, CFO

00Rainer Bos, SVP Automotive

0

0

Total

0

0

In CHF thousands

Amount of guarantees issued

9.

Shareholdings

Shareholdings of nonexecutive Directors

Ueli Wampfler

Total

Shareholdings of Executive Management

LEM Financial Report 18 | 19

Page 64

Proposed appropriation ofavailable earnings

Appropriation of available earnings
In CHF thousands

Balance brought forward from previous year
Variation of treasury shares

31.3.2019

31.3.2018

7’480

21’328109(185)

Net profit for the year

75’34631’898

Total available earnings

82’93453’041(47’834)(45’561)

35’100

7’480

Proposal of the Board of Directors
Ordinary dividend
Balance to be carried forward

The Board of Directors proposes the distribution of an ordinary dividend of CHF 42 per share. Net of 35 % withholding tax, thisis an ordinary cash dividend of CHF 27.3 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 Financial Report 18 | 19

Page 65

Auditor’s report

Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the financial statements of LEM HOLDING SA, which comprise the balance sheet,income statement and notes (pages 60 to 65), for the year ended 31 March 2019.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing
and maintaining an internal control system relevant to the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying
appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit toobtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
OpinionIn our opinion, the financial statements for the year ended 31 March 2019 comply with Swiss law and the company’s
articles of incorporation.
Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of thefinancial statements of the current period. We have determined that there are no key audit matters to communicate inour report.

LEM Financial Report 18 | 19

Page 66

Auditor’s report

Report on other legal requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control
system exists, which has been designed for the preparation of financial statements according to the instructions of theBoard of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s
articles of incorporation. We recommend that the financial statements submitted to you be approved.
To the General Meeting of LEM HOLDING SA, Fribourg
Lancy, 16 May 2019
Ernst & Young Ltd

Roland Ruprecht
Licensed audit expert(Auditor in charge)

Victoria Napoly
Licensed audit expert

LEM Financial Report 18 | 19

Page 67

Group subsidiaries

LEM is a global player with production plants and development centers in Beijing (China), Geneva (Switzerland), Tokyo (Japan)
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 > Contact > Sales Locator
Asia

EuropeLEM HOLDING SA
Avenue Beauregard 1
CH-1700 Fribourg

LEM Europe GmbH, Branch Belgium
Egelantierlaan 2
B-1851 Humbeek

LEM Electronics (China) Co. Ltd
Linhe Street 28, Shunyi District
CN-101300 Beijing

LEM International SA
Chemin des Aulx 8
P.O. Box 35
CH-1228 Plan-les-Ouates

LEM Europe Denmark,Filial af LEM Europe GmbH
Haraldsvej 60A,1.
DK-8960 Randers

LEM Japan KK
2-1-2 Nakamachi
JP-Machida, 194-0021 Tokyo

LEM Switzerland SA
Chemin des Aulx 8
P.O. Box 35
CH-1228 Plan-les-Ouates

LEM Europe GmbH,
Succursale France
Avenue Galois 15
F-92340 Bourg-la-Reine

LEM Intellectual Property SA
Avenue Beauregard 1
CH-1700 Fribourg

LEM Europe GmbH,
Succursale Italia
Via V. Bellini 7
I-35030 Selvazzano Dentro, PD

LEM Management Services Sàrl
Chemin des Aulx 8
P.O. Box 35
CH-1228 Plan-les-Ouates
LEM Tech France SAS
Les Allées du Parc
Allée des Parcs 575/655
F-69800 Saint-Priest

LEM Bulgaria EOOD
Iliensko Shosse 8
BG-1220 Sofia

LEM Europe GmbH
Frankfurter Straße 74
D-64521 Groß-Gerau

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,
Taiwan Branch
7F., No. 342, Wenlin Road
Shilindistrict
TWN-11163 Taipei

North America

LEM Europe GmbH, Branch Austria
Concorde Business Park 2/F/6
A-2320 Schwechat

LEM Financial Report 18 | 19

LEM Europe GmbH,
Branch UK
Suite 10 West Lancs Investment
Centre Mapleview
Whitemoss Business Park
UK-Skelmersdale WN8 9TG

LEM Management Services Sàrl,
Branch India
Level 2, Connaught Place
Bund Garden Road
IN-411 001 Pune

Page 68

LEM Russia, LLC
Staritskoe Shosse 15
RU-170040 Tver

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

Copyright© 2019 LEM HOLDING SA,
Fribourg

Concept and text
LEM, Fribourg
Cabinet Privé deConseils SA, Genève
SNK Identities AG, Zurich

DesignSNK Identities AG, Zurich

PhotosMara Truog, Zurich
Getty Images

Printing
Druckprodukt, Zurich

LEM HOLDING SA
Avenue Beauregard 1
1700 Freiburg/Fribourg
Switzerland
www.lem.com

Financial Report 18 | 19