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Annual Report

We Enable Energy

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Financial reportingConsolidated financial statements

Consolidated statement of comprehensive incomeConsolidated statement of financial position

Consolidated cash flow statementConsolidated statement of changes in equity

Notes to the consolidated financial statementsAuditor’s report on the consolidated financial statements

Financial statements of Von Roll Holding AGIncome statement

Balance sheetNotes to the statutory financial statements

Allocation of accumulated results Auditor’s report on the financial statements

383940

41 4292

949596

10010 1

37

Glossary 104

Corporate GovernanceGroup structure and shareholders

Capital structureBoard of Directors

Executive ManagementRemuneration, profit-sharing and loans

Participatory rights of shareholdersChange of control and defence measures

AuditorInformation policy

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Von Roll Holding AG with registered office in CH-4226 Breitenbach (canton Solothurn) and a further business address in CH-8804 Au / Wädenswil, Steinacherstrasse 101, has been listed on the SIX Swiss Exchange (Symbol: ROL, security number : 324.535, ISIN : CH0003245351 ) since 11 August 1987.

Business addressVon Roll Holding AGSteinacherstrasse 1018804 Au / WädenswilSwitzerlandPhone +41 44 204 35 00Fax +41 44 204 30 10www.vonroll.com

Registered officePasswangstrasse 204226 Breitenbach SO

Stock exchange listingSIX Swiss Exchange (Symbol: ROL) Security number: 324.535 ISIN: CH0003245351

For publications and further information,please contact Claudia GuentertPhone +41 44 204 35 29Fax +41 44 204 30 [email protected]

Von Roll Holding AGSteinacherstrasse 1018804 Au / WädenswilSwitzerland

ImprintPublisher: Von Roll Holding AG, Au / WädenswilContent / text: Von Roll Holding AG, Au / WädenswilDesign / artwork:gateB AG, Empowering Marketing Performance, Steinhausen / Zug

Created and printed in Switzerland© Von Roll Holding AG, 2015

The Von Roll Annual Report is originally prepared in Germanand translated into English.In the event of any discrepancy, the printed German version prevails.

The Annual Report is available on the Internet atwww.vonroll.com

Von Roll in 2014Letter to shareholdersBusiness development

Global presenceVon Roll Insulation

Von Roll CompositesOther activities /Von Roll Water

The Von Roll share

248

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Remuneration ReportRemuneration philosophy and basic principles

Remuneration during the financial yearAuditor’s report on remuneration

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Our product portfolio Five-year overview

We Enable Energy – As one of Switzerland’s longest-established industrial companies, Von Roll focuses on products and systems for elec trical power generation, power transmission and industrial app-lications.

Von Roll’s business portfolio is divided into the following businesses : Von Roll Insulation offers electrical insulation products, systems and

services for generators, high- and low-voltage motors, transformers and other applications. Von Roll Composites produces composite materials and parts for a variety of industrial equipment. Von Roll Water provides solutions for process engineering tasks in the field of water and waste-water management.

MicaMica as a base material for high-voltage insulation. Von Roll’s commitment to mica is extensive and covers all stages in the manu facturing process.

WiresInsulated round, flat and Litz wires for high- and low-voltage markets and electronic applications.

CablesMica tapes for fire-resistant cables. Von Roll provides a wide range of pro-ducts that are ideally suited to all commonly used standards.

LiquidsImpregnation and potting resins as well as encapsulating and conformal coatings for high- and low-voltage app lications.

FlexiblesInsulating flexible materials for low-voltage applications such as flexible laminates and adhesive tapes.

CompositesEngineered materials made from a resin and a support structure with distinct physical, thermal and electrical pro-perties. They can be moulded, machined or semi-finished.

WaterVon Roll Water provides state-of-the-art solutions for water and waste-water treatment.

Defence & securityHigh-quality systems for security and protection based on thermoset /thermo-plastic products in single use or tailored combinations.

TestingVon Roll provides electrical, thermal and mechanical testing of individual materials as well as complete insulating systems. We are UL-certified.

TrainingThe Von Roll Insulation Training pro-vides a training program in high- and low-voltage insulation to its customers.

Key figures per share

Key figures

in CHF 1,000 20142013 5

(restated) 2012 2011 2010

Order intake (gross) 416,382 436,162 505,133 559,596 540,462Net sales 418,844 417,805 497,064 543,262 554,151Number of employees (FTE) 2,268 2,551 2,727 2,881 2,937Depreciation, amortisation and impairments – 20,583 – 13,891 – 51,502 – 18,814 – 18,090EBIT – 32,495 – 6,113 – 53,637 6,635 10,790Cash flow from operating activities 3,032 14,508 1,589 – 19,679 14,259Capital expenditures 35,480 24,958 23,413 17,969 14,161Current assets 277,142 266,042 308,299 285,046 267,404Total assets 474,350 497,072 502,841 490,439 491,635Current liabilities 88,147 91,288 76,043 148,362 121,884Non-current liabilities 261,526 204,955 198,477 48,471 47,222Equity 124,677 200,829 228,321 293,606 322,529Equity ratio (%) 26 % 40 % 45 % 60 % 66 %Number of issued shares 184,778,889 184,778,889 184,778,889 184,778,889 184,778,889EBIT per share 1 – 0.18 – 0.03 – 0.30 0.04 0.06Operating cash flow per share 2 0.02 0.08 0.01 – 0.11 0.08Equity per share (CHF) 3 0.70 1.13 1.28 1.65 1.81Dividends per share (CHF) 4 – – – – –

America 22.8 %

EMEA 1 54.7 %

Asia 22.5 %

Share of total sales

Other 3.0 %

Composites 30.0 %

Insulation 67.0 %

Share of order intake

Other 3.5 %

Composites 29.9 %

Insulation 66.6 %


1 EBIT/weighted average number of shares outstanding2 Cash flow from operating activities /weighted average number of shares outstanding3 Consolidated equity/weighted average number of shares outstanding4 Dividend 2014: proposal by the Board of Directors5 See Note 2 of the consolidated financial statements

in 1,000 CHF 20142013 4

( restated)

Order intake 416,382 436,162Net sales 418,844 417,805EBIT – 32,495 – 6,113Net income for the period – 90,204 – 36,323Cash flow from operating activities 3,032 14,508Capital expenditures 35,480 24,958Equity 124,677 200,829Equity ratio (%) 26 % 40 %Number of employees (FTE) 2,268 2,551

1 EBIT/weighted average number of shares outstanding2 Cash flow from operating activities /weighted average number of shares outstanding3 Consolidated equity/weighted average number of shares outstanding4 See Note 2 of the consolidated financial statements

Number of employees (FTE)

20142013 2

(restated)

Von Roll Insulation 1,281 1,298Von Roll Composites 923 972Other activities 64 281Total 2,268 2,551

1 EMEA: Europe, Middle East and Africa2 See Note 2 of the consolidated financial statements

Net sales by region

in CHF 1,000 20142013 2

(restated)

EMEA1 229,047 219,210America 95,567 95,727Asia 94,230 102,868Total 418,844 417,805

Order intake by segment

in CHF 1,000 20142013 2

(restated)

Von Roll Insulation 278,852 277,335Von Roll Composites 125,016 135,693Other activities 12,514 23,134Total 416,382 436,162

Net sales by segment

in CHF 1,000 20142013 2

(restated)


EBIT by segment

in CHF 1,000 20142013 2

(restated)

Von Roll Insulation – 2,810 3,229Von Roll Composites – 17,781 – 926Other activities – 11,904 – 8,416Total – 32,495 – 6,113

in CHF 20142013 4

( restated)

EBIT 1 – 0.18 – 0.03Cash flow from operating activities 2 0.02 0.08Equity 3 0.70 1.13Number of issued shares 184,778,889 184,778,889Share price ( high) 2.03 2.20Share price ( low) 1.30 1.30Share price (end of period) 1.36 1.39Market capitalisation ( in CHF 1,000) 251,299 256,843

We Enable Energy

2 Letter to shareholders

Dear Shareholders

These measures will improve capacity utilisation and efficiency, significantly reducing the share of fixed costs. The initiatives we have introduced and the implementation of our strategy will also continue in 2015 in line with our plans and will already begin to have an impact in the current financial year, 2015. At the same time, we are investing in state-of-the-art, high-performance machinery and equipment to supply our demanding markets on time and to the required standard of quality.

Apart from plant optimisation, we are emphasising the development of our markets. In our core areas, we have invested in research and development, including new applications. Von Roll will launch a series of new products this year, primarily for the aircraft construc-tion, high-speed train drive units and energy storage.

Modest global economic growth and persistently heavy pressure on prices will remain in 2015. There are three main reasons for this. First, the restructur-ing measures are still having an impact and, second, the market trend is expected to be subdued. Weak demand is an issue, particularly in traditional power generation sectors, such as hydropower and ther-mal power stations. Our customers are experiencing another period of consolidation and concentration.

2014 was a year of planned change for Von Roll. As announced, we have turned our focus fully to our core business, Insulation and Composites. The trans-formers business, which has generated losses for a number of years, was sold during the reporting year. This sale resulted in a “ last time” significant negative impact on Von Roll’s result in 2014. We are also work-ing rapidly to implement our restructuring measures, which means that the result is also being affected by start-up costs. After several years of declining sales, we were able to stabilise our figures at the previous year’s level. New customers and new applications made up for lost business in power generation, a main market, and in the Composites division.

The Düren site in Germany will be shut down by the end of 2015. With the exception of the product group “moulded parts”, all products will continue to be manufactured at various Von Roll Group plants. This discontinued product group is not part of our core business.

The consolidation of our global plant network is con-tinuing apace. The facility in Dunstable, England, was closed in December 2014. In the meanwhile, Von Roll has optimised its production setup in India, concen trating all manu facturing output at a modern plant in Nelamangala, near Bangalore, working at full capacity. The other two sites will be cleared and sold. In the USA, the Monmouth Junction plant will be fully incorporated into the Schenectady site by April 2015.

The third reason is the strength of the Swiss franc in relation to other major currencies. The surprising and unexpected move by the Swiss National Bank will impact our result in 2015 and will pose an addi-tional challenge, especially to products with high local costs at our Swiss site. The counter measures which have already been taken will only have an effect in the medium term.

As a result of the planned reorganisation of Von Roll Holding AG and the associated costs, the Board of Directors will propose to the shareholders that no dividend be paid for 2014.

On behalf of the Board of Directors and the Exe cu-tive Management, we would like to extend our thanks to our customers, suppliers and of course to you, our shareholders, for your loyalty and trust.

In particular, we would also like to thank our emplo y-ees for all their hard work and great dedication in an extremely challenging economic environment.

Au / Wädenswil, March 2015

Dr. Peter Kalantzis Achim KlotzChairman of the Board of Directors Chief Executive Officer

4 Business development

Overall, the economic environment developed slightly more favourably than in the previous year. Demand increased in Europe, North America and the Middle East. In the BRIC countries (Brazil, Russia, India and China) on the other hand, demand was fairly subdued. The reasons behind these trends are different and varied.

Von Roll posted Group sales of CHF 418.8 million for financial year 2014, up slightly on the previous year’s CHF 417.8 million.

It was pleasing that EMEA, our largest market, man-aged to recover, with sales in this region increas-ing by 4.5 % to CHF 229.0 million. However, the Americas region experienced a downturn. Whilst we expanded our activities in North America, our South American market share shrank. This led to an almost unchanged sales figure of CHF 95.6 million. Sales in Asia fell by 8.4 % to CHF 94.2 million.

Order intake for financial year 2014 stood at CHF 416.4 million, as against CHF 436.2 million in the previous year. While the Insulation division’s order intake was more or less stable, the Composites and Water sectors saw theirs drop sharply.

Transformers and one-off effects impact on the business resultIn the reporting year 2014, EBIT was negative at CHF – 32.5 million. Adjusted for the one-off effects totalling CHF 31.4 million, EBIT would have been slightly negative.

These non-recurring effects include restruc turing costs incurred due to closing plants in Düren ( Germany), Monmouth Junction (USA), Dunstable (England) and Peenya (India). Additional project and consulting costs are factored into the operating EBIT.

Despite these effects, the gross margin increased in Insulation and Composites, both core areas of business. The gross margin rose from 17.4 % to 18.2 % in the Insulation division and from 16.9 % to 17.2 % in the Composites division. This is a key indicator of our future business because it reflects both capacity utilisation and customer demand.

Operating cash flow stabilisedVon Roll posted positive cash flow from operating activities of CHF 3.0 million in financial year 2014, down from CHF 14.5 million in 2013. Investment in property, plant and equipment increased by CHF 10.5 million to CHF 35.5 million.

The equity ratio fell from 40.4 % as at 31 December 2013 to 26.3 % as at 31 December 2014.

Business development

Adjusted EBIT

in CHF 1,000 20142013

(restated )

EBIT – 32,495 – 6,113One-time effects – 31,438 – 9,633Recurring EBIT – 1,057 3,520

Business development 5

nomic situ ation in this area overall made customers reluctant to invest and prevented sales from increasing in Latin America.

Business in Asia fell below expectations. The low- voltage sector saw a positive trend in the consumer goods and electronics industry markets in this region, while we enjoyed successful sales of our resin products and flexible laminates in this seg-ment. Prices are still under extreme pressure in the Asian markets. Insufficient opportunities for local production and local competitors are limiting our success on the market.

The high-voltage sector showed initial signs of mount-ing a global recovery. We received more orders from large generator manufacturers than in the previous year. The demand for products used in high-voltage motors in China and North America also increased thanks to the buoyant repair business.

Sales in the low-voltage sector continued to rise, a positive trend underpinned by the automotive and consumer goods industries.

The all-important gross margin was increased by 0.8 percentage points from 17.4 % to 18.2 %.

Business development in the Insulation divisionVon Roll Insulation posted sales of CHF 279.0 million in 2014, up by 2.0 % on the previous year. The Insula-tion business is still the mainstay of the Group’s sales, contributing 66.6 %. Order intake in the Insulation busi-ness rose slightly in the reporting year, up by 0.5 % from CHF 277.3 million in 2013 to CHF 278.9 million.

All key figures enjoyed a positive trend in the EMEA region. The wind turbine, cables and automotive industry markets in particular achieved significant growth. We were able to gain considerable market share in the Middle East, seeing high demand for mica tapes for fire-resistant cables in this region. Our liquids product segment saw particularly en couraging development in the EMEA region, while the demand for Von Roll mica tapes also increased.

America reported a pleasing level of comprehensive income, primarily thanks to the trend in North America. Business in the USA and Canada recovered significant-ly in the second half of the year. Solid demand from large generator manu facturers in the hydro-oil and gas sector was the main contributor to this positive picture. The repairs industry for high- and low-voltage motors experienced an upturn. We were able to gain further market share in South America, although the poor eco-

Von Roll Insulation : key figures

in CHF 1,000 2014 2013

Net sales 279,046 273,667Gross margin 50,818 47,596– In % 18.2 % 17.4 %EBIT – 2,810 3,229One-time effects – 10,284 – 3,870Recurring EBIT 7,474 7,099 Number of employees (FTE) 1,281 1,298

6 Business development

The division was also able to benefit from growth in the automotive industry, specifically with products for sophisticated applications in high-performance engines.

The transmission of renewable energies such as wind and solar power (“smart grids”) also remained a growth area. Von Roll’s customers in this field include the HVDC market (high-voltage direct current), with the company supplying numerous products ranging from profiles to threaded rods, and integrating them to create complete solutions. Von Roll won some new energy storage customers and opened up new ap -plications in 2014.

Despite the weaker sales figures, the gross margin improved slightly from 16.9 % to 17.2 %.

Business development in the Composites divisionSales in the Von Roll Composites division fell by 5.8 % to CHF 125.3 million in financial year 2014. The division contributed 29.9 % to Group sales. Order intake fell by 7.9 % to CHF 125.0 million during the reporting year.

Overall, the Composites division performed below expectations. The market for composite app lications, specifically in the traditional power generation sector, proved extremely challenging. The purchasing power of customers increasingly active on a global basis and the cut-throat nature of the competition put prices under heavy pressure, which was exacerbated by the producer markets’ continued migration to Asia and other low-cost regions. Focusing and optimising the value chain won us several projects in this market towards the end of the year.

A lack of large-scale orders for thermal insulation and a number of postponed projects, primarily in the smelter business, led to a significant drop in sales in this segment.

The second half of the year saw a positive trend in the ballistics market segment. The demand for personal protective equipment was affected by global conflicts and the security situation.

Von Roll Composites : key figures

in CHF 1,000 2014 2013

Net sales 125,304 133,086Gross margin 21,532 22,522– In % 17.2 % 16.9 %EBIT – 17,781 – 926One-time effects – 17,054 – 3,615Recurring EBIT – 727 2,689 Number of employees (FTE) 923 972

Business development 7

Business development in other activities

Von Roll Water increased sales by 31.1 % year-on-year.

As far as the EMEA region was concerned, business in Western Europe and the Middle East was parti cularly pleasing. Von Roll Water gained market share in German-speaking Europe, consolidating its position as the market leader for drinking water systems in southern Germany. The investment climate in the Middle East remains good, particularly in the United Arab Emirates. The business unit’s first project in Oman was completed successfully, with more in the pipeline.

The situation in Russia worsened due to the Ukraine conflict. Despite difficult conditions, we see some good potential for the future in Eastern Europe: the next European Union funding period for the re novation of local water infrastructure in the east-ern member states (2015 – 2021) has begun. With the opening of new branches in Hungary and Slovenia, we are well positioned to take advantage of this. We are also anticipating investment in the infra structure of smaller and medium-sized towns and cities in Russia to increase.

The stake in WaRoTec GmbH, Aschaffenburg, had to be written down and a loss incurred because busi-ness failed to progress satisfactorily.

Von Roll Water secured some new orders in Asia in 2014. One project in China was also concluded and others were readied for finalisation. Compre hensive income was hit hard by projects delayed by the late receipt of permits from local authorities. This affected both the municipal and industrial sectors and was due in part to changes in legislation.

Positioning itself as a technology partner, Von Roll Water is focusing more closely on its core areas of expertise.

Von Roll Transformers was sold with effect from 30 December 2014 and is no longer part of the Von Roll Group. Its results are shown separately once again on page 56 ff. under “discontinued operations”.

8 Global presence

Prague, CZ

Moscow, RU

Augsburg, DE

Bradford, GB

Düren, DE

Filderstadt, DE

Valdoie/Delle, FR

Wädenswil, CH

Breitenbach, CH

Meyzieu, FR

Trofarello, IT

Wroclaw, PL

Piatra Neamt, RO

Ghisalba, IT

Maracanau/Fortaleza, BR

Tongcheng, CN

Shanghai, CN

Qingdao, CN

Luhe, CN

Nelamangala, IN

Bangalore, IN

Bhopal, IN

Singapur, SG

Bietigheim-Bissingen, DE

Douglasville, US

Cleveland, US

Monmouth Junction, US

New Haven, US

Schenectady, US

Shenzhen, CN

São Paulo, BR

Currais Novo, BR

Ljubljana, SLO

Budapest, HUN

Global presence

Administration

Production and Sales locations

Sales locations

Production, Sales, Research and Development locations

Composites

Liquids

Mica

Wire

Water

City, country

Location Type of branchProduction

Global presence 9

Prague, CZ

Moscow, RU

Augsburg, DE

Bradford, GB

Düren, DE

Filderstadt, DE

Valdoie/Delle, FR

Wädenswil, CH

Breitenbach, CH

Meyzieu, FR

Trofarello, IT

Wroclaw, PL

Piatra Neamt, RO

Ghisalba, IT

Maracanau/Fortaleza, BR

Tongcheng, CN

Shanghai, CN

Qingdao, CN

Luhe, CN

Nelamangala, IN

Bangalore, IN

Bhopal, IN

Singapur, SG

Bietigheim-Bissingen, DE

Douglasville, US

Cleveland, US

Monmouth Junction, US

New Haven, US

Schenectady, US

Shenzhen, CN

São Paulo, BR

Currais Novo, BR

Ljubljana, SLO

Budapest, HUN

As a partner for customers active on a global basis in the energy sector and in other areas of industry, Von Roll also has a global presence: the Group has over 30 locations for production, service, research and development, or sales. This offers customers access to a global network and creates the basis for rapid and competent support on site. This also allows Von Roll to exploit oppor tunities that are presented by the global trends of climate change, rising energy costs, sustainable development and limited resources.

10 Business units

The Insulation division is part of Von Roll’s core busi-ness and offers products, systems and services for the electrical insulation of high- and low-voltage applications.

Our target markets include applications such as generators for power stations, rotation motors for industry, traction motors, transformers, chemicals, oil and gas plant, and the machinery, electronics, auto motive and consumer goods industries.

Highlights 2014Sales of both new and traditional resin product lines increased considerably all over the world, with demand for particularly environmentally friendly water-based varnishes for the high- and low-voltage sector up nearly twofold.

A new CMR1-free potting resin is currently being trialled. Sales of new environmentally friendly resins for the high-voltage market got off to a good start.

Our coil production business and taped conductors for traction motors from India enjoyed increasing demand.

The division is focusing on developing thin high- performance mica tapes and new anti-corona tapes with improved thermal and electrical properties.

We gained market share worldwide with our new gen-eration of Cablosam tapes for fire-resistant cables. Further improvements to products are in the pipeline.

We supplied Von Roll mica tapes to all well-known hydro generator manufacturers on behalf of Belo Monte Hydro Power, a new hydro power plant on the Xingu River in Brazil, thus adding a further flagship project to our list of references.

1 CMR = carcinogenic, mutagenic and reprotoxic substances

Von Roll Insulation

Business units 11

Potting resins for parking sensors in the automotive industry

Von Roll’s products may work discreetly and be hidden away, but they are nonetheless an indispensable part of everyday life. Did you know that there might even be some in your car? For instance, potting resins from Von Roll may well have been used in your parking sensors – one of many possible examples found in cars.

Parking sensors act as proximity sensors for road vehicles, warning drivers about obstacles while parking. These systems use either electromagnetic or ultrasonic detectors to spot objects that are close to the vehicle and measure their distance from it.

Potting resins from the Von Roll Dolph® product line ensure that the active electric part of these sensors is protected from moisture, dust, extreme temperature differences and other environmental factors and is kept clean to guarantee a long service life.

Von Roll Dolph® potting resins can be used to protect most sensors, includ-ing parking sensors, speed sensors, inductive speed sensors, tempera ture sensors and positioning sensors.

The state-of-the-art products fulfil European standards. Thanks to the com-position of the components, our customers benefit from environmentally friendly products with minimal volatile organic compound (VOC) emissions.

Von Roll provides cost-effective solutions for today’s high volume pro-duction runs.

12 Business units

The Composites division primarily focuses on manu -facturing and selling composite materials for indus-try. Its plastic products combine a variety of materials with different mechanical as well as thermal and elec-trical insulation properties. Depending on the combi-nation and customer requirements, composites can be produced to replace metals such as aluminium in machinery and equipment. Thanks to their low den-sity, high strength and resistance to corrosion, these products are being used more and more often in the production of machinery and equipment. For instance, they are used successfully in mechanical engineering, in industrial smelting furnaces, in electric motors and generators, for energy storage, in aviation and auto-motive engineering and in many more market sectors besides. The wide range of possibilities for modifi-cation and customisation offers significant potential for future composite applications.

In addition to semi-finished products, Von Roll Com-posites also offers on customised solutions such as machined parts to meet the needs of a wide variety of sectors.

Highlights 2014The aerospace industry remained a growth market. The mega trend of mobility and lightweight cons truction boosted demand for composite materials, enabling us to record above-average growth in this market with our products. We can see further potential in this area with newly developed products for all regions.

Positive development was also reported in the auto-motive industry, where Von Roll offers new and inno-vative products for sophisticated applications and optimises them in step with increasing demand.

Newly developed preassembled components were used successfully in new areas of energy trans-mission and storage. We will be able to increase our share of value added in future thanks to new energy storage applications.

Von Roll Composites

Business units 13

Composites for the aviation industry

Thanks to the wide range of possible combinations of special resin formulations and selected reinforcing materials, composites can be used for many aviation applications, such as in aircraft com ponents. The areas of the aircraft body shown in the illustration are just a few examples of many.

Another is the service trolley used on board. The manufacturers of trolleys like these prefer using composites rather than aluminium to make the side panels. These trolleys are as robust as they are light, composites in the aviation industry meet the vital re quirement of reducing weight while remaining highly functional.

Another indispensable property of the Von Roll composites used here is their fire resistance – they are flame-retardant and low-fuming – which can only be achieved by choosing the ideal combination of raw materials to use.

As requirements differ depending on how the materials are used in the aircraft, a wide variety of composites (based on glass or carbon fibre) are available to achieve the required properties as successfully as possible.

Von Roll is constantly enhancing its product portfolio in this sector to secure further market share in the future.

14 Business units

Other activities / Von Roll Water

Von Roll Water is one of the other activities of the Von Roll Group. Von Roll Transformers was sold with effect from 30 December 2014 and is no longer part of the Group. The higher-level Technologies division therefore no longer exists (see also Note 5 on the business segments in the financial section).

Von Roll WaterVon Roll Water (Von Roll BHU Umwelttechnik GmbH) provides solutions and concepts for technical pro-cess tasks in water and wastewater treatment for municipal and industrial applications, both for new facilities and for upgrading existing ones.

After successfully expanding its business, new branches were opened in Slovenia and Hungary in 2014. Business operations in the Middle East were also furthered with a new industry partner added in Dubai, while market presence in Russia was reinforced.

Projects currently under construction include a large drinking water system in Mauritius, a municipal sludge treatment plant in Hungary, a process water facility in Germany and a sewage treatment plant in China, which is due to be signed off in the second quarter of 2015.

These prestigious projects are set to be very im -portant for winning further major orders for high- capacity plants.

Business units 15

The ultrafiltration process for treating fresh and drinking water

According to the European Water Charter, the quality require-ments for drinking water must be met at all times. Impurities caused by bacteria, microorganisms and clouding cannot be sufficiently eradicated using conventional water treatment methods in the event of rainfall or snowmelt, for example. This is where the innovative ultrafiltration technique comes in.

Ultrafiltration is a fine filtration method via a filter with microscopic pores known as a membrane. This forms an impenetrable barrier in the water for bacteria, viruses, microorganisms and particles which cause clouding.

An ultrafiltration membrane works like this: the raw water flows inside the pipe-shaped hollow fibre. As the pressure builds up, it is pushed out through the membrane and any particles, microorganisms, viruses, etc. are held back on the membrane.

Von Roll BHU Umwelttechnik handles the entire order process for ultrafiltration facilities of this kind, including all aspects relating to processes, machinery and elec tronics. Capacities range from a few litres per second to facilities treating several hundred cubic metres every hour. This makes Von Roll BHU one of the leading plant builders using this technology.

Highlights 2014Von Roll BHU secured most of the drinking water projects put out to public tender in southern Ger-many. Using largely standardised membrane sys-tems for well water treatment based on ultra- and nanofiltration, we set outstanding standards with regard to water quality and the energy effi ciency of the treatment process.

The biomembrane system technology was success-fully introduced with the completion of a wastewater facility in Oman. The Middle East and Russia will be future key markets for this technology.

LHPS (Lamellar High Performance Settler )1 technol-ogy has been implemented in both municipal and industrial projects with good results, buoyed by the increasing number of highly functional plants that can serve as reference projects.

Our process water treatment activities for industry were expanded further. Despite strong compe tition, we won two more projects with our own patented BiosS-Treat2 technology in both Germany and China. Previous successes achieved with existing key customers in Europe were reaffirmed by repeat orders, while the BiosS-Treat process attracted some new customers in China.

1 LHPS = flocculation, sedimentation, treatment (Lamellar High Performance Settler)

2 BiosS-Treat technology = prevents and reduces bacteria formation through biological pre-treatment

16 Von Roll share

The shares are traded on the Swiss stock exchange (SIX Swiss Exchange) and are included in the Swiss Performance Index SPI. They are also traded in Frankfurt and New York.

On 31 December 2014, 184,778,889 bearer shares with voting rights in Von Roll Holding AG, each with a nominal value of CHF 0.10, were authorised for trading on the Swiss stock exchange in Zurich.

The principal shareholder is the von Finck family with 67.41 % of shares, which includes treasury shares of Von Roll Holding AG (3.82 %).

Share performance 2014

Von Roll share

Stock market data

Listing information

Financial calendar

18 March 2015 : Balance sheet press con- ference, Annual Report 2014 Zurich, Switzerland

15 April 2015 : Annual General Meeting, Regensdorf (ZH), Switzerland

25 August 2015 : Semi-annual Report 2015

Von Roll contact Claudia Guentert Corporate Communications Phone +41 44 204 35 29 Fax +41 44 204 30 07 E-mail [email protected]

www.vonroll.com

Stock exchange listing SIX Swiss Exchange Symbol: ROLSecurity number 324.535ISIN CH0003245351Reuters ROL.SBloomberg ROL SW

Von Roll SPI ( normalised )in CHF

Feb March April May June July Aug Sept Oct Nov Dec

2.25

2.00

1.50

1.75

1.00

1.25

Jan

in CHF 2014 2013

Number of issued shares 184,778,889 184,778,889Price high ( in CHF) 2.03 2.20Price low ( in CHF) 1.30 1.30Price on balance sheet date ( in CHF) 1.36 1.39Market capitalisation (units of CHF 1,000) 251,299 256,843Trading volume (daily average) 83,829 84,345

Corporate Governance 17

Corporate Governance

Von Roll Holding AG is organised in accordance with Swiss law and meets current requirements regarding Corporate Governance. This publication complies with all the requirements imposed by the SIX Swiss Exchange (Swiss stock exchange) regarding infor-mation on Corporate Governance ( Corporate Governance Directive of 1 September 2014). Since 11 August 1987, Von Roll Holding AG, with its regis-tered office in CH -4226 Breitenbach, Passwang-strasse 20, and with a further business address at Steinacherstrasse 101, CH-8804 Au/Wädenswil, has been listed on the SIX Swiss Exchange (symbol: ROL, security number: 324.535, ISIN: CH0003245351). As of 31 December 2014, the market capitalisation amounted to TCHF 251,299 ( 2013: TCHF 256,843).

1. Group structure and shareholders

1.1 Group structure

1.1.1 Operating group structure Von Roll Holding AG and its subsidiaries focus their operating activities on the Von Roll Insulation and Von Roll Composites divisions and the Von Roll Water business unit. Further details about the divisions and business units are available in the “Financial report-ing” section (see Note 5 “Segment reporting”) in this Annual Report.

OrganisationLegally the Von Roll Group consists of Von Roll Holding AG and its subsidiaries (see Note 23 of the “ Financial reporting” section in this Annual Report). The Von Roll Group has two tiers of management: the Board of Directors and the Executive Management. The Board of Directors of Von Roll Holding AG is respon-sible for the company’s overall management, its organ-isational structure, accounting, financial control and financial planning. The Executive Management consists of a Chief Executive Officer (CEO), a Chief Financial Officer (CFO) and the heads of the Von Roll Insula-tion and Von Roll Composites divisions. The Executive Management is responsible for operating and ongoing business management. The organisational structure is geared to the demands of an integrated technol-ogy company. The Executive Management forms the top tier of management, responsible for operating and ongoing business management. As a result of the restructure undertaken in 2013, management is the duty of the manager with responsibility for the corre-sponding division and business unit.

ManagementFor the Von Roll Group, customer focus, techno logical and innovative leadership, as well as the highest level of quality and service form the basis for long- standing business relationships. By focusing on our successful core business and expanding our port-folio, particularly in the direction of forward-looking and technologically intensive business segments, significant added value will be generated, resulting in a sustained increase in shareholder value. The foundation for this is constant optimisation of pro-cesses, costs and quality. To ensure sustained success, Von Roll relies on its business operating system for corporate management. With the business operating system, the aim of utilising our potential to the full and consequently creating long-term value for our shareholders and clients is pursued. At the same time, the Von Roll Group strives to rank among the world’s leading companies in terms of per-formance, transparency and innovation. In so doing, our employees observe the legal and ethical condi-tions and demonstrate loyalty to the company. Our employees agree to comply with the internal code of conduct (“Global Code of Conduct”). They are also bound by all Group guidelines and directives published within the Von Roll Group.

1.1.2 Listed companies There are no other listed companies within the scope of consolidation of Von Roll Holding AG.

1.1.3 Unlisted companiesA list of significant unlisted consolidated companies is disclosed in Note 23 of the “Financial reporting” section in this Annual Report. In addition, Von Roll Holding AG holds a 3 % stake in the separate and independently managed Bank von Roll AG.

1.2 Significant shareholdersIn 2014, there were no disclosure notifications re -lating to participations of significant shareholders or groups of shareholders.

1.3 Cross-shareholdingsThere are no cross-shareholdings with other com-panies. Possible cross-shareholdings may result from the disclosed significant shareholder structure.

18 Corporate Governance

2. Capital structure

2.1 CapitalThe ordinary share capital of Von Roll Holding AG as of the date of this report amounts to CHF 18,477,888.90, divided into 184,778,889 bearer shares with a nominal value of CHF 0.10 each.

2.2 Authorised and conditional capitalThe Annual General Meeting on 9 April 2014 approved the creation of conditional capital. The Board of Directors is thus entitled to increase the company’s share capital by up to CHF 3,000,000 by issuing a maximum of 30,000,000 fully paid-up bearer shares each with a par value of CHF 0.10 to be subscribed for by exercising conversion rights granted in con-nection with debentures or similar bonds of Von Roll Holding AG or Group companies. Shareholders’ sub-scription rights were excluded.

2.3 Changes in share capitalOn 12 November 2007, the capital increase resolved by the Extraordinary General Meeting on 13 August 2007 was carried out, increasing the share capital by CHF 4,619,472.20 from CHF 13,858,416.70 at a nominal value of CHF 0.10 per share, so that the share capital increased to CHF 18,477,888.90.

2.4 Shares and participation certificatesAs of 31 December 2014, 184,778,889 bearer shares with a nominal value of CHF 0.10 had been issued and were fully paid up. One bearer share carries one voting right. There were no participation certificates outstanding.

2.5 Bonus certificatesVon Roll Holding AG has not issued any bonus cer-tificates.

2.6 Limitations on transferability and nominee registrations

There are no limitations on transferability or nominee registrations.

2.7 Convertible bonds and options

2.7.1 Convertible bondsAs of 18 June 2014, Von Roll Holding AG issued unse-cured convertible bonds (stock symbol : ROL14; Swiss security number: 24523928; ISIN: CH0245239287) of CHF 61 million due in 2020. They are convertible into 25,416,870 bearer shares (subject to any adjustments

due to the dilution protection clause) of Von Roll. The shares to be delivered upon conversion of the bonds will be shares made available from the conditional new share capital (see section 2.2).

The conversion price is set at CHF 2.40. The offering and redemption price are set at 100 % each. The convertible bonds will carry a coupon of 1.250 % per annum, payable annually in arrears. Existing share-holders have been granted advance subscription rights to subscribe for the convertible bonds in pro-portion to their current shareholding. Through the conversion of the convertible bonds, one new share is created for seven existing shares. Accordingly, based on an issue total of CHF 61 million, each share-holder has the right to purchase a bond of CHF 1,000 nominal amount for every 2,913 shares held on 2 June 2014 prior to the start of trading. Any exercise of conversion rights will dilute earnings per share. The convertible bond can be redeemed early at any time if more than 85 % of the original bond total is converted and/or redeemed or, after 9 July 2016, if the closing price of the Von Roll Holding AG regis-tered share on the SIX Swiss Exchange is 130 % or more of the conversion price over a period of 20 out of 30 consecutive trading days (see also Note 39 on page 91 and Note 10 on page 98).

2.7.2 Stock options for senior and middle management

In 2008, a stock option plan was introduced for senior and middle management. Non-transferable stock options may be issued to these managers each year; however, there is no obligation to grant any options. The options may be exercised at any time for a period of five years for a price determined at the grant date if, at the time of exercise, the manager fulfils the appropriate requirements.

In 2008, a total of 475,000 options to acquire 475,000 shares were granted. These options had lapsed as of 31 December 2013. In 2009, a total of 596,000 options to acquire 596,000 shares were granted. The exercise price was fixed at CHF 11.

The first 33 ⅓ % of the options granted could be exer-cised from 1 February 2010. An additional 33 ⅓ % could be exercised on the same date in both 2011 and 2012. The exercising period ended on 31 January 2014.

The options could only be settled in shares ( equity settlement ). The potential commitment to provide


shares for options was covered solely by the pur-chase of shares on the stock exchange.

The options granted were valued on the basis of the Black-Scholes option pricing model and had an average fair value of CHF 1.25. The volatility rate of 43 % was based on historically observed stock prices. The risk-free interest rate of 2.32 % was based on Swiss government bonds with similar maturities. An underlying dividend yield of 1.56 % and fluctuation of 10 % per year were expected.

No options were exercised in the reporting period. As of 31 December 2014, all options of the tranche issued in 2009 had lapsed (as of 31 December 2013: 190,830).

The total share capital covered by these stock option plans was CHF 82,000 (820,000 at CHF 0.10). For further information, please see Note 30 in the “Financial reporting” section on page 77 of this Annual Report.


3. Board of Directors

3.1 Members of the Board of Directors

As of 31 December 2014, the Board of Directors of Von Roll Holding AG comprises the following members :

Name Nationality Born Function Member since Term of office Function

Dr. Peter Kalantzis CH /GR 1945 Chairman since 12 /2010 2007 2015 Non-executiveGuido Egli CH 1951 Vice-Chairman 2007 2015 Non-executiveGerd Amtstätter D 1943 Member 2007 2015 Non-executiveGerd Peskes D 1944 Member 2000 2015 Non-executiveAugust François von Finck CH 1968 Member 2010 2015 Non-executive

Dr. Peter Kalantzis Chairman since 12/2010, previously Member Swiss and Greek national

Dr. rer. pol., University of Basel, Switzerland

Professional career1971 – 1990 : Various management positions, last position as Delegate to the Board of Directors of Lonza AG, Basel, Switzerland

1991 – 2000 : General Director and Member of the Executive Management of the Alusuisse-Lonza Group AG, Zurich, Switzerland from 1991 to 1996 Head of the Chemistry division and then respon sible for Group development from 1997 to 2000

Other activitiesChairman of the Board of Directors of Clair AG, Cham, Switzerland; Chairman of the Board of Directors of Lamda Development AG, Athens, Greece; Chairman of the Board of Directors of Degussa Sonne/Mond Goldhandel AG, Cham, Switzerland; Chairman of the Board of Directors of Elpe-Thraki AG, Athens, Greece; Member of the Board of Directors of Mövenpick Holding AG, Baar, Switzerland; Member of the Board of Directors of CNH Industrial NV, Amsterdam, Netherlands; Member of the Board of Directors of Paneuropean Oil and Industrial Holding SA, Luxembourg; Member of the Board of Directors of Consolidated Lamda Holdings Ltd., Luxembourg; Member of the Board of Directors of SGS SA (Société Générale de Surveillance), Geneva, Switzerland; Member of the Board of Directors of Hardstone Services SA, Geneva, Switzerland


Guido Egli Vice-ChairmanSwiss national

Degree from Höhere Wirtschafts- und Verwaltungsschule, Switzerland, and degree from the London Business School, UK

Professional career1977 – 2001: Various management positions, e.g. as Director Sales and Marketing with the Emmi Group, CEO and Delegate to the Board of Directors of Hero, Lenzburg, Switzerland

1996 : Foundation of own consulting company “ifm Food Marketing”, Lucerne, Switzerland, with various consultancy mandates in Switzerland and abroad

2001 – 2014 : Mövenpick Foods Switzerland Ltd., Baar, Switzerland, Chairman of the Board of Directors and CEO

2006 – 2014 : Mövenpick Holding AG, Baar, Switzerland, CEO

Other activitiesChairman of the Board of Directors of Kursaal Casino AG, Lucerne, Switzerland; Chairman of the Board of Directors of Grand Casino Luzern AG, Lucerne, Switzerland; Chairman of the Board of Directors of Casino online AG, Lucerne, Switzerland; Chairman of the Board of Directors of Parkhaus Casino-Palace AG, Lucerne, Switzerland; Member of the Board of Directors of Reitzel S.A., Fribourg, Switzerland; Member of the Board of Directors of Provins, Sion, Switzerland; Member of the Board of Directors of Gamag Management AG, Lucerne, Switzerland

Gerd Amtstätter MemberGerman national

Degree in law from the University of Munich, Germany

Professional career1971 – 1975 : Member of the management team of a medium-sized company

1975 – 1998 : Government of the Free State of Bavaria, Germany, latterly as Assistant Secretary of State (Ministerialdirektor) at the Ministry of Finance

Since 1998 : General Manager of von Finck’sche Hauptverwaltung

Other activitiesMember of the Management Board of Nymphenburg Immobilien AG, Munich, Germany; Member of the Management Board of Amira Verwaltungs AG, Munich, Germany; Supervisory Board Chairman of Custodia Holding AG, Munich, Germany; Supervisory Board Chairman of Staatl. Mineralbrunnen AG, Bad Brückenau, Germany; Supervisory Board Chairman of Oppmann Immobilien AG, Würzburg, Germany; Member of the Advisory Board of FidesSecur Versicherungsmakler GmbH, Munich, Germany


Gerd Peskes Member German national

Business degree from Fachhochschule Bochum, Germany, Professional accountant

Professional careerSince 1978 : Managing Director of Gerd Peskes GmbH Wirtschaftsprüfungs-gesellschaft, Düsseldorf, Germany

Other activitiesVice-Chairman of the Supervisory Board of Custodia Holding AG, Munich, Germany; Vice-Chairman of the Supervisory Board of Nymphenburg Immobilien AG, Munich, Germany; Member of the Supervisory Board of RHI AG, Vienna, Austria; Member of the Board of Directors of Mövenpick Holding AG, Cham, Switzerland; Member of the Board of Directors of Clair AG, Cham, Switzerland; Supervisory Board Chairman of ARAG SE, Düsseldorf, Germany; Member of the Supervisory Board of apetito AG, Rheine, Germany; Member of the Supervisory Board of Claas KGaA, Harsewinkel, Germany; Chairman of the Supervisory Board of Substantia AG, Munich, Germany; Chairman of the Advisory Board of Katjes Holding GmbH & Co. KG, Emmerich, Germany; Member of the Advisory Board of LK Mahnke GmbH & Co. KG, Mülheim, Germany

August François von FinckMemberSwiss national

Master of Business Administration ( MBA ), Georgetown University, USA,Bachelor of Science ( BS ), Georgetown University, USA,Banking degree, Schweizerischer Bankverein, Basel, Switzerland

Professional careerEntrepreneur

Other activitiesChairman of the Board of Directors of Carlton-Holding AG, Allschwil, Switzerland; Board of Directors of SGS SA, Geneva, Switzerland; Vice-Chairman of Bank Von Roll, Zurich, Switzer-land; Supervisory Board of Custodia Holding AG, Munich, Ger-many; Supervisory Board of Staatliche Mineralbrunnen AG, Bad Brückenau, Germany

None of the Members of the Board of Directors during the reporting year belonged to either the Executive Management of Von Roll Holding AG or to one of its subsidiaries, nor did they have significant business relations with the latter.


3.2 Other activities and interestsInformation on the other activities and interests of the Members of the Board of Directors is shown in section 3.1.

3.3 Number of permissible activitiesThe number of external offices and functions is set out with binding effect in the revised Articles of Associ-ation which will be submitted to the Annual General Meeting for approval on 15 April 2015 (see also section 1.6.4 of the Remuneration Report on page 31).

3.4 Elections and terms of officeDuring the 2014 Annual General Meeting, all Directors were elected for a further one-year term of office until the end of the 2015 Annual General Meeting. In accord-ance with the organisational regulations of Von Roll Holding AG, each Member of the Board of Directors is obliged to resign from office at the latest by the Annual General Meeting of the calendar year following the calendar year in which that member turns 72.

3.5 Internal organisationThe organisation of the Board of Directors and its committees is detailed in the organisational regula-tions. These are available on Von Roll Holding AG’s website, www.vonroll.com, under “Organisational Reg-ulations” in the Corporate Governance section, under “Media & Investor Relations” (http://www.vonroll.ch/en/organisationsreglement.html). The following para-graphs summarise the main elements of the organ-isational regulations.

3.5.1 Division of responsibilities on the Board of Directors

The Board of Directors constitutes itself in line with statutory regulations and the Articles of Association. The individual functions are listed in section 3.1. The Board of Directors appoints a secretary who does not have to be a Member of the Board of Directors. The Board of Directors makes its decisions and decides elections with an absolute majority of the votes cast. In the event of a tied vote, the Chairman has the casting vote. The Members of the Executive Management participate without voting rights in meetings for the agenda items relating to business activities. The invitation letter to the meeting shows all the agenda items that a Member of the Board of Directors, a committee or a Member of the Executive Management wishes to discuss. The participants of the meeting receive detailed written documentation in advance for all motions. The Chairman convenes

the Board of Directors as often as business opera-tions require. The Board of Directors met 13 times during the reporting year. In total, the meetings lasted 27 hours. The dates for the ordinary meetings are set at an early stage so that most members are usually able to attend in person.

3.5.2 Committees of the Board of Directors and their methods of operation

The Board of Directors has the following committees:

Audit CommitteeThe Audit Committee is a standing committee of the Board of Directors. It supports the Board of Directors in the assumption of its responsibility for the Group in the area of financial reporting, the application of accounting standards and systems, and the external audit. The activities of the Audit Committee do not release the Board of Directors from its legal obliga-tions and the decision-making power remains with the Board of Directors. The Audit Committee comprises three Members of the Board of Directors : G. Peskes (Chairman of the Audit Committee), G. Amtstätter and Dr. P. Kalantzis. The CFO attends the Audit Committee meetings. The Audit Committee met three times during the reporting year. Meetings lasted 2 hours 40 minutes on average.

Remuneration CommitteeThe Remuneration Committee is responsible for monitoring the selection of managers as well as their terms of employment. The members verify and propose the remuneration of the Board of Directors and the managers as well as any option and stock option plans. The Remuneration Committee has no decision- making powers. The duties and compe-tences assigned to the Board of Directors under the organisational regulations and by law remain with the full Board of Directors.

The Remuneration Committee may seek outside expert advice from time to time to support its rec-ommendations. It comprises the Board Members G. Amtstätter (Chairman of the Remuneration Com-mittee), G. Egli and A. F. von Finck. The CEO attends the People & Remuneration Committee’s meetings, apart from when his remuneration is being dis-cussed. During the reporting year, the Remuner-ation Committee met three times. A typical meeting lasted 60 minutes.


3.5.3 Working methods of the Board of Directors and its Committees

The relevant information can be found in sections 3.5.1 and 3.5.2.

3.6 Powers and responsibilitiesThe Board of Directors is responsible for the company’s overall management as well as super-vising the management of Von Roll Holding AG and the Group, in particular with regard to compliance with legislation, the Articles of Association, regula-tions and instructions. The Board of Directors issues the necessary guidelines regarding business policy and receives regular reports about business devel-opment. It may give orders and instructions to the Members of the Executive Management. The powers and responsibilities and nature of co operation between the Board of Directors and the Executive Management are stipulated in the organi sational regulations. These are available on Von Roll Holding AG’s website, www.vonroll.com, under “Organi sational Regulations” in the Corporate Gov-ernance section, under “Media & Investor Relations” (http:// www. vonroll.ch/en/organisationsreglement.html). The Board of Directors has delegated responsi -bility for business operations to the Executive Management of Von Roll Holding AG. However, in accordance with its resolution, the Board of Direc-tors continues to make important personnel deci-sions and decisions regarding acquisitions and divestments. The Board of Directors also decides on investments in technology, depending on the type of investment concerned, that exceed CHF 1 million, as well as any operating expenditure or contracts which involve Von Roll making a commitment in excess of CHF 10 million. Furthermore, the Board of Directors decides on any other matters that are relevant to the Group and cannot be delegated by law.

3.7 Information and instruments for monitoring the Executive Management

The Executive Management provides transparent and timely information and documentation to the Board of Directors. Each Member of the Board of Directors receives the detailed monthly financial statements plus comments, quarterly financial state-ments (first and third quarter), semi-annual and annual financial statements. The CEO and CFO also report to the meetings of the Board of Directors on business activities and all matters relevant to the Group including significant legal cases. Site visits complete the information received. Each year, based

on the proposals of the Executive Management, the Board of Directors discusses and approves the next year’s budget, which it then regularly reviews. Once a year, the Board of Directors reviews the strategic direction of the Group.

3.8 Risk management in the GroupThe Board of Directors and Executive Management attach a great deal of importance to dealing care-fully with risk and extended their risk management systems in the reporting year. In addition to ensuring that comprehensive and effective insurance cover is in place, risk management involves the systematic identification, assessment and reporting of strategic, operational and financial risk. Strategic risk is primarily assessed by the Board of Directors, while financial and operational risk is the responsi bility of Executive Management. The Risk Officer reports to Executive Management on risk management every six months. The Board of Directors is imme-diately advised of risks entailing a gross exposure in excess of CHF 25 million. Risk management is not only limited to the Group’s finances, but includes all business segments and companies. Suitable management tools were assigned to identified risks. According to their importance, risks were allocated to the key processes procurement, production and sales, and in accordance with risks to support processes such as IT communications technology and Human Resources. The risk assessment carried out is based on information obtained in interviews with key staff. Risks are categorised in accordance with the same framework as that used in the internal control system. For the top ten risks ( including those which can lead to incorrect or fraudulent reporting), a detailed analysis of the probability of their occurr-ing and their impact was carried out, which con -stitutes the basis for the introduction of an appro-priate risk management process. Risk management activities are focused on hedging currency and metal price risks and in managing receivables. New risks were also identified via direct contact between departments and the risk management team.


4. Executive Management

4.1 Members of Executive Management

As at 1 January 2015, the Executive Management of Von Roll Holding AG is made up as follows :

Name Nationality Born Function Term of office

Achim Werner Klotz D 1960 CEO, Head of the Insulation division since 15 April 2013Stephan Kellmann CH 1964 CFO since 15 September 2010Dr. Bernhard Fritsche D/CH 1965 Head of the Composites division since 1 January 2014

Achim Werner Klotz Chief Executive Officer ( CEO ) German national

Degree ( Dipl. Ing. ) in mechanical engineering from Darmstadt University of Technology, Germany, and Master’s in marketing and business management from EBS University for Business and Law, Wiesbaden, Germany

Professional career1989 – 1990 : Technical sales engineer at Schenk AG, Darmstadt, Germany

1991 – 1998 : Head of Key Account Management Automotive and from 1996 General Manager of Balzers Coating, Germany at OC Oerlikon AG ( formerly : Balzers AG )

1998 – 2009 : Member of corporate management and Head of the casting d ivision at Bühler AG, Uzwil, Switzerland ; Head of North America for all Bühler business segments from 2001 to 2005

2009 – 2013 : Managing Director of new division Advanced Materials and member of corporate management at Bühler AG, Uzwil, Switzerland

Since 15 April 2013: Chief Executive Officer ( CEO ) of Von Roll Holding AG, Breitenbach, Switzerland

Other activities There are no other activities or interests.


Stephan Kellmann Chief Financial Officer ( CFO ) Swiss national

Swiss-educated graduate and expert in financial accounting and controlling

Professional career1992 – 1995 : Project Manager at Eastman Chemicals, Zug, Switzerland

1995 – 2003 : Various management functions and, as Head of Reporting division, responsibility for all reporting at MBT Bauchemie, Zurich, Switzerland

2003 – 2007 : Head of Group Controlling and Accounting of Mövenpick Group, Zurich, Switzerland

2007 – 2010 : Chief Financial Officer ( CFO ) of Mövenpick Group, Zurich, Switzerland

Since 15 September 2010 : Chief Financial Officer ( CFO ) of Von Roll Holding AG, Breitenbach, Switzerland

Other activitiesMember of the Board of Directors of Oeschger Brandschutz AG, Steinhausen, Switzerland; Member of the Board of Directors of Spiller AG, Kriens, Switzerland; Chairman of the Board of Directors of Norec Immobilien AG, Lucerne, Switzerland

Dr. Bernhard Fritsche Head of the Composites division German and Swiss national

Degree ( Dipl. Ing. ) in metallurgy from Stuttgart University, Germany, doctorate in engineering sciences from ETH Zurich, Switzerland

Professional career1998 : Head of Metallography at EMPA, Dübendorf, Switzerland

1999 – 2001 : Head of Material Engineering at Bühler AG, Uzwil, Switzerland

2002 – 2004 : Head of Development and Construction, cross-divisional central department, at Bühler AG, Uzwil, Switzerland

2004 – 2006 : Project leader of a strategic project at Bühler Die-Casting AG, Uzwil, Switzerland

2006 – 2009 : Head of Application Technology at Bühler Die-Casting AG, Uzwil, Switzerland

2009 – 2013 : Head of Die-Casting division at Bühler Die-Casting AG, Uzwil, Switzerland

Since 1 January 2014: Head of Composites division at Von Roll Holding AG, Breitenbach, Switzerland

Other activities There are no other activities or interests.


4.2 Other activitiesInformation on the other activities and interests of Ex -ecutive Management Members is shown in section 4.1.

4.3 Number of permissible activitiesThe number of external offices and functions is set out with binding effect in the revised Articles of Asso-ciation, which will be submitted to the Annual General Meeting for approval on 15 April 2015 (see also section 1.6.4 of the Remuneration Report on page 31).

4.4 Management contractsThere are no management contracts with third parties.

5. Remuneration, profit-sharing and loans

5.1 Content of and procedure for determining remuneration and profit-sharing programmes

The Remuneration Committee of the Board of Direct-ors draws up the parameters for the remuneration of the Members of the Board of Directors annually and submits them to the Board of Directors for approval. The services of an external adviser were not called upon during the reporting year. The Remuneration Committee regularly reviews contracts of employment and the associated income with the Members of the Executive Management on the principle of attracting the most suitable and well-qualified personnel for the company. The management is paid fairly at normal market rates, based on salary comparisons, in line with their abilities, experience and qualifications. The remuneration com-prises a fixed salary plus a variable performance-related component. The level of the performance- related com-ponent depends on the attain ment of the company’s targets. The Members of the Board of Directors received a fixed fee in the form of a cash payment in 2014. The Members of the Board of Directors did not receive any addi tional remuneration or emoluments in the form of additional fees, shares or options. The Members of the Executive Management received a basic salary plus a performance- related salary component, 100 % of which is based on the success of the company. The basic salary accounts for around 60 % and the performance- related salary component for some 40 % of total pay. The CEO, Achim Werner Klotz, is to receive pro rata compen sation for lost vested options in 2013, 2014 and 2015 alongside his remuneration.

For detailed information, please see the Remuneration Report on page 29 ff.

5.2 Remuneration, profit-sharing and loansThe parameters for performance-related remuner-ation, the allocation of shares, conversion rights and option rights, and the additional limit for the remuneration of Members of the management team which were set for remuneration after having been voted on by the Annual General Meeting, as well as the rules regarding loans and pension benefits granted to Members of the Board of Directors and the management team and rules regarding the Annual General Meeting’s votes on remuneration, are set out with binding effect in the revised Articles of Associ-ation, which will be submitted to the Annual General Meeting for approval on 15 April 2015 (see also the Remuneration Report on page 29 ff.).

6. Participatory rights of shareholders

6.1 Voting right restrictions and representationThe company’s Articles of Association do not contain any voting right restrictions and do not deviate from Swiss law with regard to the representation of voting rights. The Annual General Meeting adopts resolutions and conducts elections with an absolute majority of the votes cast at the meeting, excluding any blank or invalid votes. This regulation applies unless stipulated otherwise by mandatory legal provisions or provi-sions set out in the Articles of Association. Each share carries one vote at the Annual General Meeting.

6.2 Quorum stipulated in the Articles of AssociationA decision by the Annual General Meeting on the winding- up of the company without liquidation requires at least two thirds of the votes represented and an absolute majority of the nominal value of the shares represented. Moreover, in accordance with the Articles of Association, the statutory quorums in accordance with Art. 703 and 704 of the Swiss Code of Obligations will apply to resolutions made by the Annual General Meeting.

6.3 Convening of the Annual General MeetingThe Articles of Association do not contain any rules that deviate from Swiss law with regard to the convening of the Annual General Meeting. The Ordinary General Meeting takes place annually, no later than six months after the end of the financial year. The meeting is convened by the Board of Directors. The invitation to the Annual General Meeting is published once in the “Swiss Official Gazette of Commerce” (SOGC). One or more share-


holders who together represent at least 10 % of the share capital may call for an Extraordinary General Meeting; Extraordinary General Meetings must take place within 90 days of receipt of such a request.

6.4 AgendaShareholders who together represent shares with a nominal value of at least CHF 1 million can ask for an item to be included on the agenda for discussion, but no later than 60 days before the day of the meeting. Requests must be submitted in writing.

6.5 Entries in the share registerThe share capital of the company is exclusively com-prised of bearer shares and consequently no share register is kept.

7. Change of control and defence measures

7.1 Duty to make a public offerAfter the Annual General Meeting of 20 April 2012 resolved to include an “opt-out” clause in the Articles of Association (new Art. 4a), parties purchasing shares in the company are exempt from the obligation to make a public offer to purchase pursuant to Art. 32 and 52 of the Swiss Federal Act on Securities Exchanges and Securities Trading (SESTA) dated 24 March 1995.

7.2 Change of control clausesThere are no significant contractual agreements with the Board of Directors or the Executive Management in the event of a change of control. The Articles of Association do not contain any change of control clauses in favour of Members of the Board of Directors and/or Executive Management.

8. Auditor

8.1 Duration of mandate and term of office of the auditor in charge

In 2004, Deloitte AG, Zurich, was registered in the com-mercial register as the auditor for Von Roll Holding AG. Mr. Martin Welser was ap pointed auditor in charge for the first year. The Audit Committee oversees the ac -ti vities of the auditors. The auditor is ap pointed on each occasion by the Annual General Meeting for one financial year, and the same auditor may be reap pointed in the next financial year. The appl icable statutory maximum term of office for an auditor in charge of seven

years (Art. 730a Para. 2 Swiss Code of Obligations) is not limited by the Articles of Association.

8.2 Auditing feeThe fee paid to the auditor for the audit of the 2014 finan-cial statements was TCHF 719 in total (2013: TCHF 729).

8.3 Additional feesDuring the period under review, additional fees of around TCHF 207 (2013: TCHF 116) were paid for addi-tional services relating to tax, com pliance and other services. In financial year 2014, TCHF 50 were paid for tax advice and TCHF 157 for additional audit-related services.

8.4 Instruments for monitoring and managing the external auditor

The Audit Committee of the Board of Directors assesses the performance, remuneration and independence of the external auditor annually (see section 3. 5. 2). The Board of Directors proposes the election of the external auditor to the Annual General Meeting based on the recommendation of the Audit Committee. Unless there are particular grounds to do otherwise, the emphasis is on ensuring continuity. The Audit Committee assesses the scope of the audit by the external auditor and the relevant procedures annually and discusses the audit findings with the external auditor. During the reporting year, three meetings were held with the representatives of the external auditor.

9. Information policy

Von Roll Holding AG pursues a policy of transparent, truthful and proactive information. Whenever pos-sible, employees are informed first. Share holders receive information through the Annual Report, Semi-annual Report, media releases, the Internet and at the Annual General Meeting. Von Roll Holding AG reports and comments on its results on a half-yearly basis. Moreover, Von Roll Holding AG provides con-tinuous information on important events according to the rules of ad hoc notifications. Upon request, shareholders can receive media releases from the press office by fax or e-mail. These can be request-ed from Von Roll Holding AG, Steinacherstrasse 101, CH- 8804 Au/Wädenswil, phone +41 (0)44 204 35 29, fax +41 (0)44 204 30 07 or e-mail [email protected]. Von Roll Holding AG publishes all events that are relevant to the stock quotation in accordance with the guidelines of SIX Swiss Exchange.

Remuneration Report 29

1. Remuneration philosophy and basic principles

1.1 GeneralThe Remuneration Report lays down the remu ner-ation principles and the governance framework for the remuneration of the Board of Directors and the Members of the Executive Management of Von Roll Holding AG. The report also contains details of remuneration policy and the remuneration paid to the above bodies in financial year 2014.

Unless indicated otherwise, all information provided in this report relates to the financial year that ended on 31 December 2014. The report is in line with Art. 13 of the Swiss Ordinance against Excessive Remune r-ation in Listed Companies Limited by Shares (ERCO), the “Swiss Code of Best Practice for Corporate Governance” issued by Economiesuisse, Section 5.1 of the Annex to the SIX Swiss Exchange’s Directive on Information relating to Corporate Governance, and the Swiss Code of Obligations.

1.2 Corporate governance as the basis for compensation policy

The principles of our remuneration system for the Board of Directors and the Executive Management are included in the proposed amendments to the Articles of Association.

1.3 Implementation of the ERCOThe Articles of Association of Von Roll Holding AG have been revised in accordance with the ERCO and are to be submitted to the Annual General Meeting on 15 April 2015 for approval. The remuneration systems and employment contracts with Members of the Ex -ecutive Management comply with the ERCO.

1.4 Responsibilities

1.4.1 Board of DirectorsThe Board of Directors is responsible for the Group’s remuneration system and for drafting corresponding motions for the Annual General Meeting.

1.4.2 Remuneration CommitteeThe Remuneration Committee comprises three Members of the Board of Directors. Each Member of the Remuneration Committee is elected by the Annual General Meeting for a one-year term, which runs until the end of the next Ordinary General Meeting. Committee members may be re-elected. The Board

of Directors appoints one Member of the Remuner-ation Committee as its chairman and determines the committee’s duties and powers. The Remuneration Committee assists the Board of Directors with setting and reviewing the company’s remuneration strategy and guidelines, and the qualitative and quanti-tative remuneration criteria as well as with preparing motions for the Annual General Meeting relating to the remuneration of the Board of Directors and the Executive Management. It can make suggestions and recommendations to the Board of Directors re gard-ing other remuneration issues. The Remuneration Committee can call in external specialists.

The Remuneration Committee is made up of Gerd Amtstätter (Chairman of the Remuneration Com-mittee), Guido Egli and August François von Finck, all of whom are Members of the Board of Directors. The CEO usually attends Remuneration Committee meetings in an advisory capacity, apart from when his remuneration is being discussed. The Remuner-ation Committee met three times during the report-ing year. A typical meeting lasted 60 minutes. The Chairman of the Remuneration Committee reports to the Board of Directors on the committee’s activities. Members of the Board of Directors are provided with minutes of committee meetings.

1.4.3 CEO and Executive ManagementHeaded by the CEO, the Executive Management reviews the targets set for the management team’s performance-related bonus scheme based on the Remuneration Committee’s specifications.


30 Remuneration Report

1.5 Principles and components of remuneration

1.5.1 General principlesThe Board of Directors may decide to pay remuner-ation wholly or partially in cash, restricted company shares or future subscription rights to shares. The Board of Directors determines the timing of the allocation, the length of the restricted period and any discount, bearing in mind the length of the re -stricted or vesting period. The restricted or vesting period shall be at least three years, although the Board of Directors may agree on a shorter period in justified cases. The Board of Directors may stipulate that, should a certain event specified in advance ultimately occur, such as the termination of an em -ployment or mandate relationship or a change of control, then restricted or vesting periods will con-tinue to apply, be shortened or be cancelled, or re-muneration will be paid out (assuming targets have been met ) or forfeited.

If shares or future subscription rights to shares are to be allocated or other remuneration components granted, the remuneration amount shall correspond to the value accorded to these remuneration com-ponents at the time of their allocation in accordance with generally recognised valuation methods.

In respect of duties performed in legal entities of the Group or on behalf of a legal entity of the Group, these entities may grant remuneration to the Members of the Board of Directors and the Executive Management insofar as the amounts concerned do not exceed the limit approved by the Annual General Meeting or the additional limit in accordance with Art. 32 Para. 6 of the Articles of Association to be submitted at the Annual General Meeting on 15 April 2015.

Within the scope permissible by law, the company may compensate Members of the Board of Directors and the Executive Management for losses incurred in conjunction with lawsuits, proceedings or settlements related to their activities for the company and may advance relevant sums and take out insurance poli-cies. Compensation, advances and insurance policies of this kind are not deemed to be remuneration.

1.5.2 Components of the Board of Directors’ remuneration

Members of the Board of Directors receive fixed remuneration for their activities. Their expenses are also reimbursed. Reimbursed expenses ( including lump-sum expenses) are not deemed to be remuner-ation. Supplements may be paid for being a member of a committee or for undertaking specific duties or projects.

1.5.3 Components of the Executive Management’s remuneration

Members of the Executive Management receive a fixed basic remuneration component and a variable component for their activities. Their expenses are also reimbursed. Reimbursed expenses (including lump-sum expenses) are not deemed to be remu-neration. The variable remuneration component is performance- and/or success-related and is calcu-lated based on criteria set by the Board of Directors as a basic principle. These criteria focus in par -ticular on the Group’s key financial ratios or elements thereof. As a basic principle, the variable compo-nent may amount to no more than 100 % of the fixed component at the time it is paid out.

A new bonus model was introduced for the Executive Management and the management team on 1 January 2014. The model is based on the “EBIT margin” ratio, and on actual figures from the relevant financial year.

50%

100%

150%

200%

250%

Target achievement

10%5%2,5% 15% 20% EBIT

4,5%2%


The Executive Management receives a target bonus of 40 % of their respective annual salary ( = 100 %) in accordance with the following parameters:

A stock option plan was introduced in 2008 for senior and middle management, which expired on 31 January 2014 and was not renewed.

1.6 Approval procedure

1.6.1 Current approval procedureThe Board of Directors is responsible for the remu-neration system at Von Roll.

1.6.2 New approval procedureIn accordance with the proposed amendment to the Articles of Association, the Annual General Meeting will in future approve the maximum remuneration for Members of the Board of Directors with binding effect when the Ordinary General Meeting convenes each year, with this remuneration limit then applying until the next Ordinary General Meeting.

The Annual General Meeting shall approve the max-imum of fixed remuneration components for the fol-lowing financial year for Members of the Executive Management with binding effect when the Ordinary General Meeting convenes each year.

The Annual General Meeting shall approve the total variable remuneration components for the previous financial year for Members of the Executive Manage-ment with binding effect when the Ordinary General Meeting convenes each year.

The Annual General Meeting can approve a retro-spective increase in a total amount already approved at any time.

If the Annual General Meeting withholds its approval, the Board of Directors may submit new motions for approval at the same Annual General Meeting. If the Board of Directors does not submit any new motions or if the Annual General Meeting rejects the new motions as well, the Board of Directors can convene a new General Meeting.

EBIT margin Percentage of target bonus

<2.0 % 0 %2.5 % 50 %4.5 % 100 %10 % 250 %

For appointments of new Members of the Executive Management made after the Annual General Meeting has given its approval, the additional limit for each new member shall be 150 % of the highest remu-neration amount paid to a Member of the Executive Management at the last Ordinary General Meeting in the previous financial year. This additional remuner-ation does not need to be approved by the Annual General Meeting.

1.6.3 Appointment of Members of the Executive Management

The Board of Directors appoints the Members of the Executive Management.

1.6.4 Number of external mandates and positionsThe number of external mandates and positions is stipulated with binding effect in the revised Articles of Association submitted for approval to the Annual General Meeting on 15 April 2015.

1.6.5 Contracts with Members of the Board of Directors and Executive Management

In accordance with the ERCO and the proposed amendments to the Articles of Association, contracts with Members of the Board of Directors and the Ex -ecutive Management on which their remuneration is based may be temporary or permanent. The maximum term of a temporary contract is one year. Contracts may be renewed. Notice periods for permanent con-tracts cannot be any longer than one year.

The notice period for the CEO and the other Mem-bers of the Executive Management is 12 months. All employment contracts with Members of the Ex ecutive Management comply with the new legislation and the provisions of the ERCO.

1.6.6 Severance payThe employment contracts concluded with Members of the Executive Management do not provide for any severance pay. Similarly, the contracts of the Members of the Board of Directors and the Executive Management do not include any “golden parachutes” or any other special benefits in the event of a change of control.


2. Remuneration in financial year 2014

2.1 Remuneration of the Board of Directors (audited)

2.1.1 Board of Directors fee

The following remuneration was paid to Members of the Board of Directors for financial year 2014:

in CHF 1,000 Function Fixed fee1 Variable remuneration Other remuneration 2 Pension benefits 3 Total

Dr. Peter Kalantzis Chairman 294 0 0 14 308Guido Egli Vice-Chairman 144 0 0 9 153Gerd Amtstätter Member 94 0 0 0 94Gerd Peskes Member 94 0 0 0 94August François von Finck Member 94 0 0 6 100Total 720 0 0 29 749

1 Gross salary, i. e. before deducting social security contributions, withholding tax, etc.2 Other remuneration does not include lump-sum expenses.3 Statutory charges and contributions to occupational provisioning schemes such as the pension fund and management insurance.

The following remuneration was paid to Members of the Board of Directors for the previous year, 2013:

2.1.2 Other remunerationApart from the amounts disclosed here, no Member of the Board of Directors received any additional fees or compensation in 2014 for services provided to Von Roll. In particular, no additional compensation was paid for being a member of a committee or undertaking specific duties or projects in financial year 2014.

in CHF 1,000 Function Fixed fee1 Variable remuneration Other remuneration 2 Pension benefits 3 Total

Dr. Peter Kalantzis Chairman 294 0 0 14 308Guido Egli Vice-Chairman 144 0 0 9 153Gerd Amtstätter Member 94 0 0 0 94Gerd Peskes Member 94 0 0 0 94August François von Finck Member 94 0 0 6 100Total 720 0 0 29 749

1 Gross salary, i. e. before deducting social security contributions, withholding tax, etc.2 Other remuneration does not include lump-sum expenses.3 Statutory charges and contributions to occupational provisioning schemes such as the pension fund and management insurance.


2.2 Remuneration of the Executive Management

2.2.1 Short-term remuneration (audited)The Members of the Executive Management received remuneration totalling CHF 2.6 million in 2014 (2013: CHF 1.6 million). This sum comprises fixed basic salaries of CHF 1.9 million (2013: CHF 1.3 million), short-term performance bonuses of CHF 0.3 million (2013: CHF 0.1 million) and social security contributions of CHF 0.4 million (2013: CHF 0.2 million). CEO Achim Werner Klotz is to receive pro rata compensation for lost vested options in 2013, 2014 and 2015 alongside his remuneration. This is reported under “Other remuneration”. The Executive Management was enlarged and Dr. Bernhard Fritsche took up his role as Head of Composites division on 1 January 2014.

The following remuneration was paid to Members of the Executive Management for financial year 2014:

The following remuneration was paid to Members of the Executive Management for the previous year, 2013:

Achim Werner Klotz has been CEO of Von Roll Holding AG since 15 April 2013.

in CHF 1,000 Function Basic salary 1 Variable remuneration Other remuneration 2 Pension benefits 3 Total

Achim Werner Klotz CEO, Head of Insulation division 700 1374 271 175 1,283Stephan Kellmann CFO 490 0 14 112 616Dr. Bernhard Fritsche Head of Composites division 400 1605 15 95 670Total 1,590 297 300 382 2,569

1 Gross salary, i. e. before deducting social security contributions, withholding tax, etc.2 Other remuneration comprises compensation of TCHF 253 paid to the CEO as well as lump-sum compensation of TCHF 30 and child allowances of TCHF 17. 3 Statutory charges and contributions to occupational provisioning schemes such as the pension fund and management insurance.4 Guaranteed target bonus of 100 % pro rata for financial year 2013, totalling TCHF 200, with only TCHF 63 being deferred in 2013.5 Guaranteed target bonus of 100 % for financial year 2014.

in CHF 1,000 Function Basic salary 1 Variable remuneration Other remuneration 2 Pension benefits 3 Total

Achim Werner Klotz CEO, Head of Insulation division 498 634 265 110 936Stephan Kellmann CFO 490 59 14 105 668Total 988 122 279 215 1,604

1 Gross salary, i. e. before deducting social security contributions, withholding tax, etc.2 Other remuneration comprises compensation of TCHF 253 paid to the CEO as well as lump-sum compensation of TCHF 14 and child allowances of TCHF 12.3 Statutory charges and contributions to occupational provisioning schemes such as the pension fund and management insurance.4 Guaranteed target bonus of 100 % pro rata for financial year 2013, totalling TCHF 200, with only TCHF 63 being deferred in 2013.


2.2.2 Long-term remunerationA stock option plan was introduced in 2008 for senior and middle management, which expired at the end of 2014 and was not renewed. A total of 596,000 options to acquire 596,000 shares were granted to members of senior and middle manage-ment in 2009. The exercise price was fixed at CHF 11. The exercising period for the 2009 tranche ended on 31 January 2014, with all options lapsing without having been exercised.

2.2.3 Other remunerationApart from the amounts disclosed here, no Member of the Executive Management received any additional fees or compensation in 2014 for services provided to Von Roll.

2.3 Remuneration of former Members of the Board of Directors and Executive Management

No compensation was paid to former Members of the Board of Directors or Executive Management in financial year 2014.

2.4 Loans

2.4.1 Board of DirectorsNo Members of the Board of Directors were granted loans in financial year 2014. No loans were outstanding at the end of the reporting year.

2.4.2 Executive ManagementNo Members of the Executive Management were granted any loans in financial year 2014. No loans were outstanding at the end of the reporting year.

2.4.3 Former Members of the Board of Directors and Executive Management

No former Members of the Board of Directors or Executive Management were granted any loans not on standard market terms during the financial year and there are no such loans outstanding.

2.5 Remuneration and loans to related partiesNo remuneration not in line with standard market practice was granted either directly or indirectly to any related parties in financial year 2014. In addition, no related parties were granted any loans not on standard market terms and there are no such loans outstanding.

2.6 Shareholdings

2.6.1 Shares held by Members of the Board of Directors

The Members of the Board of Directors held the following number of shares as at 31 December of the respective year:

2.6.2 Shares held by Members of the Executive Management

The Members of the Executive Board did not hold any shares in Von Roll Holding AG as at 31 December 2014.

2.7 Convertible bonds

2.7.1 Convertible bonds held by Members of the Board of Directors

Members of the Board of Directors held 8,170 con-vertible bonds of Von Roll Holding AG at the end of the reporting year.

2.7.2 Convertible bonds held by Members of the Executive Management

No convertible bonds of Von Roll Holding AG were held by Members of the Executive Management at the end of the reporting year.

Number of shares 2014 2013

Dr. Peter Kalantzis 1,333 1,333Guido Egli 1,067 1,067Gerd Amtstätter 466,667 466,667Gerd Peskes 0 0August François von Finck 23,800,000 23,800,000Total 24,269,067 24,269,067


Auditor’s report on the Remuneration Report

To the General Meeting of VON ROLL HOLDING AG, BREITENBACH

Auditor’s report

We have audited the Remuneration Report dated 3 March 2015 of Von Roll Holding AG on pages 29 to 34, covering the financial year ended 31 December 2014.

Board of Directors’ ResponsibilityThe Board of Directors is responsible for preparing the Remuneration Report and ensuring its proper overall presentation in compliance with the law and the Swiss Ordinance against Excessive Remuneration in Listed Companies Limited by Shares (ERCO). It also bears responsibility for formulating basic remuneration principles and setting individual remuneration amounts.

Auditor’s ResponsibilityOur responsibility is to express an opinion on this Remuneration Report based on our audit. We conducted our audit in accordance with Swiss Auditing Standards. These standards require that we observe the rules of professional conduct and that we plan and perform the audit to obtain reasonable assurance that the Remuneration Report complies with the law and Art. 14 to 16 of the ERCO.

An audit involves performing procedures to obtain audit evidence about the disclosures made in the Remuneration Report regarding remuneration and loans in accordance with Art. 14 to 16 of the ERCO. The procedures select-ed depend on the auditor’s judgement, including the assessment of the risks of material misstatements in the Remuneration Report, whether due to fraud or error. This audit also includes evaluating the appropriateness of the methods used to value remuneration components and the overall presentation of the Remuneration Report.

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 Remuneration Report of Von Roll Holding AG for the year ended 31 December 2014 complies with the law and Art. 14 to 16 of the ERCO.

DELOITTE AG

Martin Welser Christophe AebiLicensed Audit Expert Licensed Audit ExpertAuditor in Charge

Zurich, 3 March 2015

Financial Reporting 2014 – Consolidated Financial Statements 37

Financial reporting

Consolidated financial statements Consolidated statement of comprehensive income 38 Consolidated statement of financial position 39 Consolidated cash flow statement 40 Consolidated statement of changes in equity 4 1i Notes to the consolidated financial statements 42 Auditor’s report on the consolidated financial statements 92

Financial statements of Von Roll Holding AG Income statement 94 Balance sheet 95 Notes to the statutory financial statements 96 Allocation of accumulated results 100 Auditor’s report on the financial statements 10 1i

38 Financial Reporting 2014 – Consolidated Financial Statements

Consolidated statement of comprehensive income for the financial year 2014

in CHF 1,000 Note 20142013

( restated)

Net sales 4 418,844 417,805Cost of goods sold 6 – 347,611 – 345,765Gross profit 71,233 72,040Research and development expense 6 – 8,409 – 8,174Sales and distribution expense 6 – 30,706 – 29,136Administrative expense 6 – 42,135 – 42,668Other operating income 10 3,574 4,479Other operating expense 11 – 28,111 – 4,261

Thereof restructuring expense 13 – 24,357 –Income from investment property 12 2,059 1,607EBIT – 32,495 – 6,113Financial income 14 10,894 9,138Financial expense 15 – 18,901 – 15,853Result before tax – 40,502 – 12,828Income tax 16 3,837 – 2,131Result from continuing operations – 36,665 – 14,959Result from discontinued operations 2 – 53,539 – 21,364Net income for the period – 90,204 – 36,323 Reclassification of currency translation adjustments due to disposal of foreign operations 2 16,082 –Exchange differences arising on translation of foreign operations 6,386 – 3,705Other comprehensive income that will be reclassified to income statement 22,468 – 3,705 Remeasurement of defined benefit liabilities and assets 38 – 20,268 16,270Income tax on remeasurement of defined benefit liabilities and assets 4,527 – 3,729Other comprehensive income that will not be reclassified to income statement – 15,741 12,541 Other comprehensive income for the period 6,727 8,836 Total comprehensive income for the period – 83,477 – 27,487 Net income attributable to: Owners of the parent – 90,129 – 36,314Non-controlling interest – 75 – 9Net income for the period – 90,204 – 36,323

Total comprehensive income attributable to: Owners of the parent – 83,402 – 27,478Non-controlling interest – 75 – 9Total comprehensive income for the period – 83,477 – 27,487 Earnings per share Weighted average number of shares outstanding 17 177,712,693 177,717,425Basic earnings per share in CHF 17 – 0.507 – 0.204Diluted earnings per share in CHF 17 – 0.507 – 0.204


Assets

Equity and liabilities

in CHF 1,000 Note 31.12.2014 in % 31.12.2013 in %

Current assets Cash and cash equivalents 29 82,423 61,488 Trade accounts receivable 27 65,429 81,393 Inventories 25 71,023 102,928 Tax receivables 16 4,087 2,427 Current financial assets 22 36,525 – Other accounts receivable and prepaid expense 28 17,655 17,806 Total current assets 277,142 58.4 % 266,042 53.5 % Non-current assets Property, plant and equipment 18 113,229 108,908 Goodwill 19 13,207 13,968 Intangible assets 20 19,083 37,391 Investment property 21 8,743 6,332 Non-current financial assets 22 4,052 18,204 Pension plan assets 38 17,440 32,819 Deferred tax assets 16 21,454 13,408 Total non-current assets 197,208 41.6 % 231,030 46.5 %Total assets 474,350 100.0 % 497,072 100.0 %

in CHF 1,000 Note 31.12.2014 in % 31.12.2013 in %

Liabilities Current liabilities Trade accounts payable 33 23,973 37,254 Current tax payables 16 4,019 2,846 Current financial liabilities 31 3,218 3,185 Current provisions 32 25,647 10,851 Other current liabilities and accruals 34 31,290 37,152 Total current liabilities 88,147 18.6 % 91,288 18.4 % Non-current liabilities Non-current financial liabilities 31 202,429 150,612 Post-employment benefit obligations 38 31,212 25,797 Deferred tax liabilities 16 7,288 13,114 Non-current provisions 32 20,597 15,432 Total non-current liabilities 261,526 55.1 % 204,955 41.2 %Total liabilities 349,673 73.7 % 296,243 59.6 % Equity Share capital 30 18,479 18,479 Group reserves 106,622 182,699 Equity attributable to owners of the parent company 125,101 26.4 % 201,178 40.5 %Non-controlling interests – 424 – 0.1 % – 349 – 0.1 %Total equity 124,677 26.3 % 200,829 40.4 %Total equity and liabilities 474,350 100.0 % 497,072 100.0 %

Consolidated statement of financial position as at 31 December 2014


Consolidated cash flow statement for the financial year 2014

in CHF 1,000 Note 2014 2013

Operating activities Result before tax from continuing operations – 40,502 – 12,828Result before tax from discontinued operations – 53,539 – 21,323Financial result 14 /15 22,423 7,133Depreciation, amortisation and impairment 9 21,999 15,228Earnings before interest, tax, depreciation and amortisation (EBITDA) – 49,619 – 11,790Result from the disposal and remeasurement of non-current assets 2 /10 40,827 278Changes in non-current provisions 6,150 926Cash flow before changes in net working capital – 2,642 – 10,586Changes in inventories – 6,080 22,497Changes in accounts receivable 2,146 289Changes in accounts payable 2,403 3,477Changes in other current assets – 2,655 – 2,232Changes in current provisions and other current liabilities 14,049 5,787Cash generated from operating activities 7,221 19,232Income tax paid 16 – 4,189 – 4,724CASH FLOW FROM OPERATING ACTIVITIES 3,032 14,508 Investing activities Capital expenditure for property, plant and equipment and intangible assets 18/20/21 – 35,480 – 24,958Cash outflow from acquisitions 2 – – 12,917Cash outflow from disposal 2 – 649 –Proceeds from disposal of non-current assets 562 116Payments to acquire financial assets – – 112Interests received 14 409 1,224Cash inflow from long-term loans 85 61CASH FLOW FROM INVESTING ACTIVITIES – 35,073 – 36,586 Financing activities Cash inflow due to additions of financial liabilities 60,563 7,392Cash outflow due to repayment of financial liabilities – 1,076 – 9,975Purchase of treasury shares – 975 – 1,024Sale of treasury shares 977 1,019Interests paid – 7,240 – 7,355CASH FLOW FROM FINANCING ACTIVITIES 52,249 – 9,943 CHANGE IN CASH AND CASH EQUIVALENTS 20,208 – 32,021 Cash and cash equivalents at 1 January 61,488 94,526Effects of changes in foreign exchange rates 727 – 1,017Change in cash and cash equivalents 20,208 – 32,021Cash and cash equivalents at 31 December 82,423 61,488


In the reporting year 2014, consolidated equity changed as follows:

In the reporting year 2013, consolidated equity changed as follows:

in CHF 1,000Share

capitalCapital

reservesTreasury

shares

Currency translation

adjustmentsRetained earnings

Attributable to owner

of the parent

Non- controlling

interestTotal

equity

Balance at 1 January 2014 18,479 396,688 – 54,991 – 104,883 – 54,115 201,178 – 349 200,829Net income for the period – – – – – 90,129 – 90,129 – 75 – 90,204Other comprehensive income for the period – – – 22,468 – 15,741 6,727 – 6,727Total comprehensive income for the period – – – 22,468 – 105,870 – 83,402 – 75 – 83,477Convertible bond – 8,074 – – – 8,074 – 8,074Tax effect on convertible bond – – 747 – – – – 747 – – 747Purchase /sale of treasury shares – – 3,490 – – 3,492 – 2 – – 2Total transactions with owners – 7,327 3,490 – – 3,492 7,325 – 7,325Balance at 31 December 2014 18,479 404,015 – 51,501 – 82,415 – 163,477 125,101 – 424 124,677 Total Group reserves at the end of December 2014 106,622

in CHF 1,000Share

capitalCapital

reservesTreasury

shares

Currency translation

adjustmentsRetained earnings

Attributable to owner

of the parent

Non- controlling

interestTotal

equity

Balance at 1 January 2013 (restated)1 18,479 396,688 – 58,825 – 101,178 – 26,522 228,642 – 321 228,321Net income for the period – – – – – 36,314 – 36,314 – 9 – 36,323Other comprehensive income for the period – – – – 3,705 12,541 8,836 – 8,836Total comprehensive income for the period – – – – 3,705 – 23,773 – 27,478 – 9 – 27,487Purchase /sale of treasury shares – – 3,834 – – 3,839 – 5 – – 5Purchase of non-controlling interest – – – – 19 19 – 19 –Total transactions with owners – – 3,834 – – 3,820 14 – 19 – 5Balance at 31 December 2013 18,479 396,688 – 54,991 – 104,883 – 54,115 201,178 – 349 200,829 Total Group reserves at the end of December 2013 182,699

Consolidated statement of changes in equity for the financial year 2014

1 The opening balances correspond to the figures as of 1 January 2013 published in the Annual Report 2013. Deviations from the figures as of 31 Decem-ber 2012 published in the Annual Report 2012 are based on the restatement due to the application of IAS 19 (revised 2011), which was retrospective as of 1 January 2013. Detailed information was published in the Annual Report 2013 in Note 2 of the Notes to the consolidated annual financial statements.


Notes to the consolidated financial statements as of 31 December 2014

1. Significant accounting policies

General informationVon Roll Holding AG (the company) with its subsidiaries (together Von Roll) is an international manufacturing and service company. Its main activities are presented in the Notes on the business segments (Note 5). The company is a publicly traded company listed on the Swiss stock exchange (SIX Swiss Exchange). Its registered office is at Passwangstrasse 20, 4226 Breitenbach, Switzerland.

Summary of significant accounting policiesThe consolidated financial statements of Von Roll Holding AG are prepared in accordance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), and in compliance with the listing regulations of SIX and Swiss Law.

The consolidated financial statements are presented in Swiss francs (CHF), as the main Von Roll companies operate and are financed in Switzerland. The financial statements refer to thousands of CHF (TCHF). Due to the chosen presentation method, immaterial rounding differences can occur. Use of the year in connection with the presentation of statement of financial position relates in principle to 31 D ecember of the year in question unless specified otherwise.

The consolidated financial statements have been prepared under the historical cost convention. Only certain financial instruments are valued at their fair value.

Certain minor reclassifications and additional disclosures have been made to the consolidated financial statements compared with the previous year’s figures.

Adoption of new accounting policiesThe following new interpretations and amendments to the IASB’s standards are to be adopted for the first time for the financial year starting on 1 January 2014; however, they have no impact on the consolidated financial statements of the Von Roll Group:

New interpretation

Effective for annual periods

beginning on or after

Adoption by Von Roll

IFRIC 21 Levies 1 Jan. 2014 Financial year 2014

Amendments to standards



Adoption by Von Roll

IAS 32 Offsetting Financial Assets and Financial Liabilities 1 Jan. 2014 Financial year 2014

IAS 36 Recoverable Amount Disclosures for Non-Financial Assets 1 Jan. 2014 Financial year 2014

IAS 39 Novation of Derivatives and Continuation of Hedge Accounting 1 Jan. 2014 Financial year 2014

IFRS 10, IFRS 12 and IAS 27

Investment Entities 1 Jan. 2014 Financial year 2014


The following new and revised standards and interpretations are issued by the IASB. These standards were not effective for the reporting period and have not been early adopted in the present consolidated financial statements. The following table shows the impact estimated by the Executive Management:

New standards



Planned adoption by Von Roll

IFRS 14 Regulatory Deferral Accounts 1 Jan. 2016 Financial year 2016

*

IFRS 15 Revenue from Contracts with Customers 1 Jan. 2017 Financial year 2017

**

IFRS 9 Financial Instruments 1 Jan. 2018 Financial year 2018

**

Amendments to standards



Planned adoption by Von Roll

IAS 19 Defined Benefit Plans: Employee Contributions 1 July 2014 Financial year 2015

*

Misc. Annual Improvements to IFRSs 2010 – 2012 Cycle 1 July 2014 Financial year 2015

**

Misc. Annual Improvements to IFRSs 2011 – 2013 Cycle 1 July 2014 Financial year 2015

**

IFRS 11 Accounting for Acquisitions of Interests in Joint Operations 1 Jan. 2016 Financial year 2016

**

IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation

1 Jan. 2016 Financial year 2016

**

IAS 16 and IAS 41 Bearer Plants 1 Jan. 2016 Financial year 2016

*

IAS 27 Equity Method in Separate Financial Statements 1 Jan. 2016 Financial year 2016

*

IFRS 10 and IAS 28

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

1 Jan. 2016 Financial year 2016

*

Misc. Annual Improvements to IFRSs 2012 – 2014 Cycle 1 Jan. 2016 Financial year 2016

**

IAS 1 Disclosure Initiative 1 Jan. 2016 Financial year 2016

***

IFRS 10, IFRS 12 and IAS 28

Investment Entities: Applying the Consolidation Exception 1 Jan. 2016 Financial year 2016

*

* No or no material effects are expected on the consolidated financial statements of Von Roll.

** The effects on the consolidated financial statements of Von Roll can not yet be reliably determined.

*** Additional disclosures or changes in the presentation of the financial statements of Von Roll are mainly expected.


Scope of consolidationThe consolidated financial statements comprise the financial statements of the parent company and of the companies it controls (its subsidiaries). An entity is deemed to be in control if it holds a majority equity investment and the majority of the voting rights or exercises control in another way. These companies are fully consolidated. A list of the significant consolidated companies is provided in Note 23 of this Annual Report.

Associated companies in which Von Roll exercises a significant influence (investments of between 20 % and 50 %) are consolidated using the equity method. Other investments with a shareholding of up to 20 % are valued at fair value.

Principles of consolidationThe financial statements of consolidated companies have been prepared as of the date of the consolidated financial statements, under the historical cost convention as modified by the revaluation of financial assets at fair value through profit and loss, and applying uniform valuation and presentation principles. The subsidiaries acquired or sold in the course of the year are considered in the financial statements from the actual point in time at which they were acquired or sold, as appropriate.

Non-controlling interestsNon-controlling interests are reported in the consolidated financial statements as part of the Group’s equity and not as a separate category. They are not deducted when calculating consolidated net income.

Foreign currency translationTransactions in a currency different from the functional currency of the Group company involved (foreign currency) are recorded at the exchange rate prevailing on the day of the transactions. Monetary items in foreign currency are translated on the reporting date at the closing rate. Exchange differences arising from monetary items are recorded in the income statement and shown in the net financial result insofar as they are not to be regarded as part of a net investment in a foreign operation.

When foreign operations are translated into the presentation currency, the Group companies’ income, expense and cash flows are translated into Swiss francs (CHF) using the weighted average exchange rates. Assets and liabilities are translated using the year end exchange rates. Differences from variations in exchange rates compared to the previous year arising from the translation of equity in subsidiaries and long-term intercompany loans (only loans of an equity nature) and differences resulting from the translation of net income are allocat-ed to other comprehensive income. Translation differences resulting from the application of this method are classified as equity until the disposal of the investment.

Revenue recognitionRevenue is only recognised when it has been ensured that the company is receiving the economic benefits associated with the transaction and that these can be measured reliably. Revenue is measured at the fair value of the consideration received after sales tax and rebates. The products sold or the services rendered are recorded as soon as the goods or services have been delivered and the benefits and risks have been transferred. Provisions for rebates and discounts are recognised in the same period as the related revenues in accordance with the relevant terms and conditions of sale.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective inter-est rate applicable. Dividend income from investments is recognised when the shareholder’s rights to receive payment have been established.


Certain Group activities relate to the production of customer-specific constructions and products. These long-term construction contracts are therefore recognised on a percentage basis using the percentage of completion method. The stage of completion is measured on the basis of the work done by the reporting date.

Cash and cash equivalentsCash and cash equivalents and short-term cash investments comprise cash on hand and deposits with banks, including sight deposits, as well as short-term financial instruments with a residual term of less than 90 days at the time of acquisition.

Trade accounts receivableThe reported values represent the invoiced amounts. Valuation allowances for non-performing loans are determined periodically.

Other accounts receivable and prepaid expensesOther accounts receivable comprise receivables from social security institutions, for indirect taxes and other non-operating receivables from third parties due within one year. They also include prepaid expense.

Construction contractsWhere the outcome of a construction contract can be reliably estimated, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be reliably estimated, the amount of contract revenue which can be recognised is restricted to the contract costs likely to be recovered. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Amounts due from customers under construction contracts comprise contracts where the costs incurred plus recognised profits exceed payments already received. If the payments received are higher than the costs incurred plus recognised profits, they are shown under amounts due to customers under construction contracts.

Prepayments received are accounted for without any impact on profit and loss. If there is no entitlement to a refund, they are netted off with the corresponding construction contracts for which the prepayments have been made. Prepayments for which the customer is entitled to a refund are shown as a liability.

InventoriesPurchased products are valued at acquisition cost, while internally manufactured products are valued at cost of conversion including the corresponding production-related overheads. The valuation of inventories in the balance sheet, or the records of the costs in the income statement, is done at standard cost, which is adjusted for capacity and costs deviations from the effective weighted average costs of the reporting period. Valuation allowances are recognised for goods with a lower net realisable value or which are slow-moving, providing there are no firm sales orders with fixed higher net sales prices. Unsaleable goods are fully written off.


Property, plant and equipmentProperty, plant and equipment are valued under the historical cost convention reduced by any valuation allowances and are depreciated on a straight-line basis in keeping with the following guidelines concerning estimated useful lives :

Permanent buildings 25 yearsTemporary buildings 10 – 20 yearsTechnical installations and machinery 10 – 20 yearsPlant and office equipment 5 – 10 yearsComputer equipment 3 – 10 yearsVehicles 3 – 8 years

Land is not depreciated.

Subsequent costs are only included in the carrying amount of the asset when it is probable that future economic benefits associated with the item will be usable by Von Roll and that the cost of the item can be measured reliably. All other maintenance and repair costs are charged to the income statement during the period in which they are incurred.

Borrowing costs associated with the construction of property, plant and equipment are capitalised. Von Roll does not currently have any property, plant or equipment to which this applies.

Investment propertyInvestment property principally comprises undeveloped land as well as separable rented offices and production buildings and is held to generate long-term rental yields. These properties are not used by Von Roll.

Investment property excluding land is valued at historical cost less depreciation on a straight-line basis over an expected useful life of 25 years.

Current market values are periodically determined by independent experts and disclosed additionally in the Notes.

GoodwillGoodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-con-trolling interests in the acquired company, and the fair value of the acquirer’s previously held equity interest in the acquired company (if applicable) over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed. If, following a reassessment, the share of the acquired and identifiable net assets at fair value to be assigned to the Group exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquired company and the fair value of the acquirer’s previously held equity interest in the acquired company (if applicable), then the excess is recognised immediately in the profit or loss.

Goodwill is recognised as an intangible asset and has an indeterminable useful life. It is subject to an impairment test at least once a year or more frequently if there are indications that impairment may be required. Impairment losses have an immediate effect on net income. A recognised impairment loss is not reversed in a subsequent period. Goodwill is presented separately in the consolidated balance sheet. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.


Intangible assetsLicences, trademarks and similar rights as well as other intangible assets have a determinable useful life, which is estimated in each case, and are carried at historical cost less amortisation. Amortisation is calculated using the straight-line method to allocate the cost over estimated useful lives, ranging between five and twelve years.

Reliably measurable costs for licences, trademarks and similar rights as well as for product development are capitalised only if these assets are identifiable and it is probable that the expected future economic benefits attributable to each intangible asset will flow to Von Roll.

Financial assetsFinancial assets comprise investments in securities as well as non-current loans to associated companies and third parties.

Securities are in principle valued at fair value through profit and loss. If the fair value cannot be determined reliably, a valuation is made at amortised cost. Loans are categorised as credits and accounts receivable and valued at amortised cost less any impairment. Derivatives are categorised as financial assets valued at fair value through profit and loss.

Each category of financial assets is accounted for as of the trade date.

Investments in associated companiesInvestments in associated companies are recognised at cost at the time of acquisition and subsequently valued using the equity method. Von Roll’s investment in associated companies includes goodwill (net of any accumu-lated impairment loss) identified at acquisition.

Impairment of tangible and intangible assets without goodwillTangible and intangible assets without goodwill are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised with an impact on income 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 less costs to sell and value in use. The value in use is based on future expected discounted cash flows. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash-generating units). If the reason for an impairment that was previously recognised no longer applies, it is reversed.

Share capitalBearer shares are classified as share capital. Issuing proceeds from 1 January 1997 which exceed the nominal value (premium) have been reported in the capital reserves item under Group reserves since 31 December 2011.

Share-based paymentEquity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 30. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that are expected to vest. At each balance sheet date, Von Roll revises its estimates of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the equity-settled employee benefits reserve, which is allocated to the retained earnings.


Financial liabilitiesFinancial liabilities are recognised initially at fair value, net of transaction costs incurred. Financial liabilities are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the liability using the effective interest method.

ProvisionsProvisions for environmental restoration, contingencies and commitments, announced restructurings and legal claims are only recognised if Von Roll has an existing legal or constructive obligation resulting from past events, if it is more likely than not that an outflow of resources will be required to settle the obligation, or if the amount can be reliably estimated. Restructuring provisions comprise employee severance payments, lease termination penalties and other costs. Provisions are not made for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole.

Other current liabilities and accrualsOther short-term liabilities comprise payables to social security institutions and other non-operating payables to third parties due within one year. Furthermore, this item includes deferred income from customers and accrued expenses to suppliers.

Post-employment benefits, pension assets and liabilities

(a) Pension obligationsVon Roll companies operate various pension schemes, some of which are managed by external parties. Von Roll has both defined benefit and defined contribution plans. The defined benefit obligation is calculated annually by independent, qualified actuaries.

For defined benefit plans, the cost of providing benefits is calculated on the basis of various economic and demographic assumptions using the projected unit credit method. This method takes into account years of service up to the reporting period. The calculation assumptions to be made by the Group include demographic parameters (such as staff turnover and mortality) as well as economic parameters (such as future salary trends) that will affect the final cost of the benefits.

The cost of defined benefit plans are made up of three components :– service cost recognised in profit and loss– net interest expense or income recognised in profit and loss– remeasurement recognised in other comprehensive income


Service cost includes current service cost, past service cost and gains or losses on settlements. Past service cost is recognised in the period in which the plan amendment occurs. Curtailment gains and losses are accounted for as past service cost. Contributions from plan participants or a third party reduce the service cost and are therefore deducted if they are based on the formal terms of the plan or arise from a constructive obligation.

Net interest cost is equal to the discount rate multiplied by the net defined benefit liability or asset. Cash flows and changes during the year are taken into account on a weighted basis.

Remeasurements of the net defined benefit liability or asset include actuarial gains and losses on the defined benefit obligation resulting from changes in assumptions and experiences, the return on plan assets, excluding the interest income on the plan assets that is included in the net interest, and changes in the effect of the asset ceiling ( if applicable), excluding amounts included in the net interest. Remeasurements recorded in other comprehensive income are not recycled. However, the entity may transfer those amounts recognised in other comprehensive income within equity.

Von Roll shows the first component of defined benefit costs in personnel expenses and the second component of defined benefit cost in financial expenses in its consolidated income statement. Remeasurements are recog-nised in “other comprehensive income” (OCI). The pension obligations or assets recognised in the consolidated statement of financial position represent the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans. A liability for a termination benefit is recognised when the entity can no longer withdraw the offer of the termination benefit or when the entity recognises any related restructuring costs, depending on which comes first.

The plans in Switzerland are jointly financed by the employer and the employees. The contributions are fixed in the plan regulations. For these plans, the Group applies the concept of risk sharing to the employer and employee, which reduces the net liability reported in the company’s statement of financial position.

For defined contribution plans, Von Roll pays contributions to publicly or privately administered pension plans on a mandatory, contractual or voluntary basis. Von Roll has no further payment obligations once the contributions have been paid.

Payments to defined contribution plans are reported in personnel expenses when employees have rendered service entitling them to the contributions.

(b) Other long-term employee benefits and post-employment obligationsSome Von Roll companies provide other long-term employee benefits or post-employment benefits. The entitlement to these benefits is usually dependent on years of service. The expected costs of these benefits are recognised in the income statement in the period in which they arise and are also calculated for the main plans using the projected unit credit method in the same way as defined benefit plans. These obligations are valued annually by independent, qualified actuaries.

(c) Other employee and social security benefits, accruals for staff-related costsOther employee and social security benefits mainly comprise payments to governmental institutions and others for social security, payroll taxes, health insurances and similar. Accruals for staff-related costs comprise accruals for contractual bonuses, unclaimed annual leave entitlement, flexitime balances and similar. Von Roll recognises accruals where contractually obliged or if there is a past practice that has created a constructive obligation.


Income taxIncome taxes include all taxes based upon the taxable profit of Von Roll. Other taxes not based on income, such as property and capital taxes, are included in the relevant position in the income statement.

Deferred income tax is provided in full, using the comprehensive liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. An exception to this rule is that no deferred income tax can be determined for temporary differences in conjunction with investments in subsidiaries insofar as the shareholder (parent company) is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference will not be reversed in the foreseeable future. Deferred income tax is determined using tax rates and laws that have been enacted by the balance sheet date and that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets for temporary differences and unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised and realisable temporary differences can be expected.

Deferred income tax on temporary differences arising on investments in subsidiaries and associated companies is provided, except where Von Roll is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Temporary differences arising from the first-time recognition of goodwill, from the first-time recognition of assets or liabilities in conjunction with a transaction which affects neither the taxable result nor the profit for the year are not recognised; neither are temporary differences associated with investments in subsidiaries insofar as it is likely that the temporary difference will not be reversed in the foreseeable future.

Tax assets and tax liabilities are netted if they relate to the same tax object in the same tax jurisdiction. Deferred tax assets or tax liabilities are reported as non-current assets or liabilities.

LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

Government grantsGovernment grants are only recognised if there is reasonable assurance that the related conditions will be met and the grants will be made. Valuation is made at fair value. The grants are accounted for on an accrual basis, deducted from the carrying amount of the asset and recognised in profit or loss in the period in which the corresponding expenses occur.

Segment informationReportable business segments are determined on the basis of the management approach. External segment reporting is then carried out on the basis of the internal financial reporting to the chief operating decision maker. At Von Roll, this position is held by the Board of Directors of Von Roll Holding AG.


The primary segmentation is by business segment, and the secondary is by geographical segment. A business segment is a group of assets and operations engaged in providing the same or similar products or services that are subject to risks and returns which are different from those of other business segments. A geographical segment is engaged in providing products and services within a particular economic environment that are subject to risks and returns which are different from those of segments operating in other economic environments.

Intra-segment transfers and transactions are entered into under normal commercial terms and conditions that would also be available to unrelated third parties (at arm’s length).

Financial risk factorsVon Roll’s activities are exposed to a variety of financial risks: market risk ( including currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow risk. Von Roll’s overall risk management pro-gramme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Von Roll’s financial performance. Von Roll uses derivative financial instruments to hedge certain risk exposures, where appropriate.

Financial risk management is carried out according to the principles and guidelines issued by the Board of Directors and the Executive Management. Risk management is monitored by Corporate Controlling and continually reconciled with each operational entity (please refer to the annual financial statements of Von Roll Holding AG, Note 11 “Risk assessment”). It covers identified financial risk factors as described in the previous paragraph.

(a) Market riskForeign exchange riskVon Roll operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the euro, US dollar and the Indian rupee, and other currencies to a lesser extent. Foreign exchange risk arises from sales carried out in foreign currencies and similar transactions as well as from recognised assets and liabilities and investments carried out in foreign currencies.

To manage its foreign exchange risk, Von Roll uses, wherever necessary, forward contracts from which a profit of TCHF 54 was made in the reporting period (2013 : a profit of TCHF 58). Foreign exchange risk arises when commercial transactions of an operation are not denominated in the functional currency of the oper-ation concerned but in another currency. There are significant (net) currency risks with respect to the euro of CHF 28.6 million (2013 : CHF 35.6 million), the US dollar of CHF 20.8 million (2013 : CHF 28.4 million) and the Indian rupee of CHF 12.2 million (2013 : CHF 12.1 million). Taken together all other currencies account for a for-eign exchange risk of CHF 18.2 million (2013 : CHF 15.6 million). A change in all foreign currency exchange rates of 5 % would impact the result before tax of the Von Roll Group by around CHF 4.0 million due to changes in cash and cash equivalents, trade accounts receivable, financial liabilities and trade accounts payable. A change in all foreign currency exchange rates of 5 % would have an impact of approximately CHF 7.1 million on equity.

Von Roll has investments in foreign operations whose net assets are exposed to foreign currency transaction risk. The risks of foreign currency translation differences associated with subsidiaries are not hedged.

Price riskVon Roll is exposed to price risks relating to raw materials, particularly copper. To minimise this risk, the determination of sales prices is based on prevailing copper prices at the time of the transaction. Copper in stock for which there are no customer orders is also hedged in significant cases by means of derivatives. These are exclusively fair value hedges from which a profit of TCHF 130 was made in the previous year. No derivatives to hedge copper were entered into in the reporting period. There were no open positions as at 31 December 2013 or at 31 December 2014.


Interest rate riskVon Roll is exposed to interest rate risk on cash and cash equivalents and financial liabilities.

(b) Credit riskVon Roll has no significant concentrations of credit risk. Management establishes policies to ensure that sales of products are made to customers with an appropriate credit rating. Management defines credit limits for each customer, which are continually monitored and adjusted. Additionally, the outstanding balances of certain customers are covered by credit insurance facilities. The nominal value of accounts receivable less valuation allowances is seen as an approximation of their fair value. Von Roll takes account of the risk of default by a counterparty by only investing with financial institutions whose credit rating is outstanding.

(c) Liquidity riskLiquidity risk is limited by maintaining sufficient cash and cash equivalents, investments with a maturity of 90 days or less and the availability of funding through an adequate number of credit facilities.

The following tables detail the Group’s remaining contractual maturities for its financial liabilities. The tables have been drawn up on the basis of undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table contains interest rates and principal repayments.

The due dates are as follows as of 31 December 2014:

The due dates as of 31 December 2013 had the following structure :

(d) Cash flow and fair value interest rate riskThe only significant interest-bearing assets of the Von Roll Group are one fixed-interest receivable from related companies in the amount of CHF 36.0 million as well as its cash and cash equivalents, which are subject to inter-est rate risk. An increase of 1 % in the interest rate would increase interest income by around CHF 0.8 million (2013 : CHF 0.6 million), while a 1 % decrease would similarly reduce interest income by around CHF 0.8 million (2013 : CHF 0.6 million).

in CHF 1,000 Effective interest rate Within 1 year 1 to 5 years More than 5 years Total

Bond 4.2 % 6,015 156,030 – 162,045Convertible bond 4.0 % 763 3,050 61,762 65,575Other non-current financial liabilities 3.0 % – 120 – 120Trade accounts payable – 23,973 – – 23,973Current financial liabilities 1.5 % 1,366 – – 1,366Total liabilities without derivatives 32,117 159,200 61,762 253,079Total derivatives – 343 – 343Total financial liabilities 32,117 159,543 61,762 253,422

in CHF 1,000 Effective interest rate Within 1 year 1 to 5 years More than 5 years Total

Bond 4.2 % 6,015 162,045 – 168,060Other non-current financial liabilities 2.3 % – 1,394 – 1,394Trade accounts payable – 37,254 – – 37,254Current financial liabilities 1.6 % 1,590 – – 1,590Total liabilities without derivatives 44,859 163,439 – 208,298Total derivatives – 492 – 492Total financial liabilities 44,859 163,931 – 208,790


The financial liabilities of the Von Roll Group relate predominantly to a fixed-income bond. Fixed-interest finan-cial liabilities with an interest rate fixed for a specific period of time harbour the risk of fluctuations in the values reported in the balance sheet. Further details on the interest rates on financial liabilities are provided in Note 31 “Financial liabilities”.

Capital risk managementVon Roll manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising returns through the optimisation of the debt and equity balance. The equity ratio fell from 40.4 % as at the end of 2013 to 26.3 % as at 31 December 2014. At the end of 2014, the Von Roll Group had net debt of CHF 123.2 million (2013: CHF 92.3 million).

Derivative financial instruments and hedging activitiesDerivatives are initially recognised at fair value at the date on which a derivatives contract is entered into (trade date) and are subsequently revalued at their fair value through profit and loss. In designated hedging relation-ships, derivatives can be used as (1) hedges of fair value of recognised assets, liabilities or a firm commitment (fair value hedges); (2) hedges of highly probable forecast transactions (cash flow hedges); or (3) hedges of investments in foreign subsidiaries. Currently all changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement. Changes in the fair value of hedging transactions that qualify for fair value hedge accounting are reported in the same item of the income statement as the corresponding change in fair value of the underlying transaction. Results from ineffective hedging transactions are reported in the financial result.

Use of assumptions and estimatesVon Roll’s principal accounting policies are set out in this section of the consolidated financial statements and are based on the International Financial Reporting Standards (IFRS). Significant judgements and estimates are used in the preparation of the consolidated financial statements, which to the extent that actual outcomes and results may differ from these assumptions and estimates, could affect the accounting in the areas described. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the given circumstances. Subsequent outcomes may deviate from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in account-ing estimates may be necessary if there are changes in the circumstances on which the estimate was based, or as a result of new information or more experience. Such changes are recognised in the period in which the estimate is revised. The key assumptions are described below and also outlined in the respective notes:

Revenue recognitionRevenue is only recognised when the management judges that the significant risks and rewards of ownership have been transferred to the customer. The management believes that the total accruals and provisions for these items are adequate, based on currently available information.

Property, plant and equipment and intangible assets, including goodwillProperty, plant and equipment and intangible assets, including goodwill, are reviewed annually for impairment. To assess if any impairment exists, estimates are made of future cash flows expected to result from use of the asset and its possible disposal.


Income taxSignificant estimates are required in determining current and deferred assets and liabilities for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations. The management believes that the estimates are reasonable and that the recognised assets and liabilities for income tax-related uncertainties are adequately recognised. This applies in particular for the capitalisation of tax loss carryfor-wards, which is based on expected future gains.

Pensions and other post-employment benefitsAt a number of different Von Roll sites, the employees participate in post-employment defined benefit and contribution plans. The calculations of the recognised assets and liabilities for defined benefit plans are based upon statistical and actuarial calculations. Where the calculations differ from the actuarial assumptions and are approved by the management, these can impact the assets or liabilities recognised in the balance sheet in future periods.

Legal provisionsSeveral Von Roll companies are party to various legal proceedings. Based on current knowledge, the man-agement has made assumptions of the possible impact of these open legal claims and made corresponding provisions.

Environmental provisionsManagement believes that total provisions for environmental matters are adequate based upon the information currently available.


2. Changes within the consolidated Group

Purchase of Albesiano Sisa Vernici S.r.l.On 30 May 2013, Von Roll purchased 100 % of the shares of the company Albesiano Sisa Vernici S.r.l. based in Trofarello, Italy. Albesiano Sisa Vernici S.r.l. specialises in manufacturing liquids, resins and coatings. The company is therefore reported in the Von Roll Insulation segment. The cash purchase price for the shares is TCHF 12,480 and has been paid in full.

The acquired company’s net assets are shown in the following table :

The identifiable assets acquired and liabilities assumed were valued at their fair value at the time of acquisition. The value adjustments made during purchase price allocation mainly relate to land and buildings, which are reported under property, plant and equipment, and a reacquired right, which is shown under intangible assets. The land and buildings were adjusted by TCHF 3,541 to their fair value at the time of acquisition. Within the scope of the valuation of a reacquired right in accordance with IFRS 3.B35, the licence to service the European market that had been assigned to Albesiano Sisa Vernici S.r.l. by John C. Dolph Company, which also belongs to the Von Roll Group, was revalued and reported under intangible assets. The reacquired rights were valued at TCHF 1,539 and will be amortised over the residual contract term until 2016. The conditions for agreeing the licence corresponded to market values, meaning that there was no profit or loss on settlement.

The gross contractually agreed receivables amount to TCHF 8,062, of which TCHF 343 are considered doubtful. The deferred tax assets and liabilities include the deferred tax on the adjustments mentioned above.

in CHF 1,000 Fair value

Cash and cash equivalents 76Trade accounts receivable 7,486Inventories 4,308Property, plant and equipment 10,322Intangible assets 1,539Other assets 361Deferred tax assets 412Total assets 24,504Trade accounts payable – 4,715Financial liabilities – 3,759Other liabilities and deferred income – 2,479Deferred tax liabilities – 1,560Total liabilities – 12,513Net assets 11,991 Goodwill 489

Consideration paid in cash 12,480 Consideration paid in cash 12,480Cash and cash equivalents acquired – 76Net cash outflow 12,404


The purchase price allocation gives rise to goodwill in the amount of TCHF 489, which is not tax-deductible. The goodwill arising from this transaction primarily includes potential synergies, long-term access to the market, employees and other inseparable intangible assets.

Albesiano Sisa Vernici S.r.l. contributed sales of TCHF 13,181 in 2013 since its consolidation for the first time and added TCHF 613 to the company’s earnings in 2013. If Von Roll had acquired the company with effect from 1 January 2013, sales and earnings in 2013 would have increased by TCHF 21,710 and TCHF 562 respectively.

Von Roll incurred transaction costs of TCHF 263 from the purchase of the shares in Albesiano Sisa Vernici S.r.l. These mainly comprised due diligence and legal advice costs and are included in administrative expense in the statement of comprehensive income for financial year 2013.

Sale of Von Roll Transformers Ltd.The contract of sale for the shares in Von Roll Transformers Ltd. based in Ramat Ha’Sharon, Israel, to Inter national Transformer AG based in Cham, Switzerland, for a transaction value of CHF 40.0 million was signed on 11 Decem-ber 2014. Of this amount, liabilities totalling CHF 36.0 million were assumed. International Transformer AG qualifies as a related company. The sale price is based on an external valuation. The transaction was completed on 30 December 2014. In addition to the sale price paid, standard price adjustment clauses also apply, which may bring in further payments over two years.

Von Roll entered into standard obligations in conjunction with the sale. The terms and all the maximum liability limits for the obligations entered into are normal for transactions of this kind.

Result from discontinued operations:

in CHF 1,000 2014 2013

Net sales 61,349 54,665Expenses – 58,342 – 75,988Result from discontinued operations, before income taxes 3,007 – 21,323Income tax – – 41Result from discontinued operations 3,007 – 21,364 Remeasurement to fair value less cost of disposal – 40,481 –Reclassification of currency translation adjustments1 – 16,065 –Net result from discontinued operations – 53,539 – 21,364 Net income attributable to: Owners of the parent – 53,539 – 21,364Non-controlling interest – –Net income for the period – 53,539 – 21,364

Earnings per share Weighted average number of shares outstanding 177,712,693 177,717,425Basic earnings per share in CHF – 0.301 – 0.120Diluted earnings per share in CHF – 0.301 – 0.120

1 In the year of the deconsolidation of a foreign entity the cumulative currency translation adjustments recorded in the other comprehensive income are reclassified to the income statement.


Cash flows from discontinued operations:

Effects on the balance sheet due to the sale of Von Roll Transformers Ltd. :

The sales proceeds correspond to the value of net assets following revaluation at market prices. There is there-fore no net income from the sale.

Merger of Pearl Metal Products (Bangalore) Pvt. Ltd into Pearl Insulations Pvt. LtdPearl Metal Products (Bangalore) Pvt. Ltd, Bangalore, was merged into Pearl Insulations Pvt. Ltd, Bangalore, during the reporting year.

Liquidation of Shenzhen Shengbida Electric Material Co. and Von Roll Malaysia Sdn. Bhd.Shenzhen Shengbida Electric Material Co., Shenzhen, and Von Roll Malaysia Sdn. Bhd., Kuala Lumpur, were liquidated during the reporting year.

in CHF 1,000 30.12.2014

Cash and cash equivalents 4,649Trade accounts receivable 16,992Inventories 38,937Tax receivables 66Other accounts receivable and prepaid expense 3,012Property, plant and equipment 9,701Intangible assets 19,051Non-current financial assets 11,886Pension plan assets 122Trade accounts payable – 15,093Current provisions – 2,988Other current liabilities and accruals – 3,611Non-current financial liabilities – 36,000Deferred tax liabilities – 2,243Net assets 44,481Remeasurement to fair value less cost of disposal – 40,481Net assets (after remeasurement) 4,000 Consideration received in cash 4,000Cash and cash equivalents disposed of – 4,649Net cash flow – 649

in CHF 1,000 2014 2013

Cash flow from operating activities – 2,262 – 317Cash flow from investing activities – 5,014 – 1,493Cash flow from financing activities – 144 – 236Net cash flow from discontinued operations – 7,420 – 2,046


3. Foreign currencies

The following exchange rates were used for the translation into Swiss francs (CHF) :

4. Net sales

In the reporting year, net sales developed as follows compared with the previous year:

5. Segment information

A breakdown by business segment in financial year 2014 is shown below:

Average rates Period end rates

2014 2013 31.12.2014 31.12.2013

EUR 1.215 1.229 1.203 1.223USD 0.909 0.927 0.986 0.886GBP 1.505 1.446 1.534 1.462ILS 0.256 0.255 0.251 0.255INR 0.015 0.016 0.016 0.014BRL 0.390 0.435 0.369 0.376CNY 0.148 0.151 0.158 0.146

in CHF 1,000 2014 in %2013

( restated) in %

Due to volume and prices – 1,651 – 0.4 % – 40,235 – 9.0 %Thereof copper – 7 – – 22,641 – 5.1 %

Due to currency changes – 7,803 – 1.9 % – 2,778 – 0.6 %Due to changes in scope of consolidation 10,493 2.5 % 13,181 2.9 %Total 1,039 0.2 % – 29,832 – 6.7 %

in CHF 1,000 Von RollVon Roll

InsulationVon Roll

CompositesOther

activities

Total net sales 437,078 289,425 133,159 14,494Thereof sales to other segments – 18,234 – 10,379 – 7,855 –Net sales 418,844 279,046 125,304 14,494Operating expenses – 430,757 – 269,279 – 138,387 – 23,091EBITDA – 11,913 9,767 – 13,083 – 8,597Depreciation and impairment of property, plant and equipment – 15,700 – 9,404 – 4,656 – 1,640Amortisation and impairment of intangible assets – 4,883 – 3,173 – 42 – 1,668Segment result (EBIT) – 32,495 – 2,810 – 17,781 – 11,904Financial result – 8,007 Income tax 3,837 Result from continuing operations – 36,665 Result from discontinued operations, net of income taxes – 53,539 Net income for the period – 90,204 Capital expenditures 35,480 29,505 2,571 3,404Impairments 4,137 2,979 1,060 98Number of employees (FTE) 2,268 1,281 923 64


A breakdown by business segment in financial year 2013 is shown below:

Segments to be reported are determined on the basis of the management approach. External segment reporting is then carried out on the basis of the organisational and management structure within the Group as well as internal financial reporting to the chief operating decision maker. At Von Roll, this position is held by the Board of Directors of Von Roll Holding AG.

Segment informationAs of the reporting year, the main operating activities of Von Roll are divided into the Von Roll Insulation and Von Roll Composites business segments. They form the basis for segment reporting. Von Roll’s business segments encompass all activities in line with its production processes. The Von Roll Technologies segment, which was the third operating segment until midway through the reporting year, no longer met the materiality criteria when the transformers business was sold. Activities involving the design and construction of water and wastewater treatment plants are now reported under Other activities.

Principal activities break down as follows:» Von Roll Insulation – Production and supply of electrical insulation materials and winding wires.» Von Roll Composites – Production and supply of composite materials.

For further information on the business segments, please refer to the image section of this Annual Report.

Other activities include income and expense of holding companies and companies that cannot be categorised as part of the operating business and net income from investment properties and the activities involving the design and construction of water and wastewater treatment plants.

in CHF 1,000Von Roll

( restated)Von Roll

InsulationVon Roll

Composites

Other activities

( restated)

Total net sales 437,119 284,817 141,250 11,052Thereof sales to other segments – 19,314 – 11,150 – 8,164 –Net sales 417,805 273,667 133,086 11,052Operating expenses – 410,027 – 261,739 – 130,263 – 18,025EBITDA 7,778 11,928 2,823 – 6,973Depreciation and impairment of property, plant and equipment – 11,833 – 7,518 – 3,686 – 629Amortisation and impairment of intangible assets – 2,058 – 1,181 – 63 – 814Segment result (EBIT) – 6,113 3,229 – 926 – 8,416Financial result – 6,715 Income tax – 2,131 Result from continuing operations – 14,959 Result from discontinued operations, net of income taxes – 21,364 Net income for the period – 36,323 Capital expenditures 24,958 16,865 3,204 4,889Impairments 314 313 1 –Number of employees (FTE) 2,551 1,298 972 281


Geographical information by location of customerThe table below shows a breakdown of Group net sales by geographical market, irrespective of the origin of the goods and services:

Information on gross sales generated with external clients in Switzerland is not available and the costs of com-piling it would be excessively high.

Information on major clientsThe Group believes that there is no significant dependency on one client either within a segment or across segments. Von Roll does not generate more than 10 % of Group sales with any one client.

Geographical information by location of assetsThe following table shows a geographical breakdown by location of assets:

Allocation of goodwillThe goodwill allocated to the Von Roll Insulation segment amounts to TCHF 10,992 (2013 : TCHF 11,715) and that of the Composites segment TCHF 0 (2013 : TCHF 0). Goodwill totalling TCHF 2,215 (2013 : TCHF 2,253) is allocated to the Other activities segment.

The method applied for the impairment test is described in Note 19 relating to goodwill, Note 20 relating to intangible assets and Note 18 relating to property, plant and equipment.

in CHF 1,000 2014 in % 2013

( restated) in % Variation

EMEA 229,047 54.7 % 219,210 52.5 % 4.5 %America 95,567 22.8 % 95,727 22.9 % – 0.2 %Asia 94,230 22.5 % 102,868 24.6 % – 8.4 %Von Roll 418,844 100.0 % 417,805 100.0 % 0.2 %

Von Roll EMEA America Asia

in CHF 1,000 20142013

( restated) 20142013

( restated) 2014 2013 2014 2013

Net sales to third parties 418,844 417,805 240,756 236,158 91,879 92,877 86,209 88,770Capital expenditures 35,480 24,958 30,704 16,877 3,421 4,280 1,355 3,801Number of employees (FTE) 2,268 2,551 1,131 1,385 373 377 764 789


6. Expense by type and function

7. Personnel expenses

In the consolidated income statement, personnel expenses are included in the corresponding functional costs.

in CHF 1,000 20142013

( restated)

Expense by type Raw materials and consumables – 215,332 – 215,231Energy cost – 15,099 – 16,655Employee benefit expenses (Note 7) – 144,636 – 130,317Depreciation and impairments on PPE and intangible assets (Note 9) – 17,921 – 13,703Other expenses – 60,230 – 49,837Total – 453,218 – 425,743 Expense by function Cost of goods sold – 347,611 – 345,765Research and development expense – 8,409 – 8,174Sales and distribution expenses – 30,706 – 29,136Administrative expenses – 42,135 – 42,668Restructuring expenses included in the other operating expenses – 24,357 –Total – 453,218 – 425,743

in CHF 1,000 20142013

( restated)

Wages and salaries – 102,799 – 101,271Post-employment benefit costs – 5,482 – 4,689Other social security costs – 20,518 – 19,870Other personnel costs – 15,837 – 4,487Total – 144,636 – 130,317


8. Number of employees

9. Depreciation, amortisation and impairments

10. Other operating income

Number at 31 December 2014 2013

Production 1,714 1,964Business development 222 221Sales and distribution 100 108Administration 232 258FTE at year end 2,268 2,551Average for the year 2,307 2,680

in CHF 1,000 20142013

( restated)

Land and buildings (Notes 6 and 18) – 1,701 – 1,538Technical installations and machinery (Notes 6 and 18) – 9,620 – 8,826Plant and office equipment (Notes 6 and 18) – 1,618 – 967Investment property (Notes 12 and 21) – 643 – 188Total regular depreciation on PPE and investment property – 13,582 – 11,519 Intangible assets (Notes 6 and 20) – 2,864 – 2,058Total regular amortisation on intangible assets – 2,864 – 2,058 Impairments on PPE (Notes 6 and 18) – 2,118 – 314Impairments on goodwill (Note 19) – 2,019 –Total impairments – 4,137 – 314 Total depreciation, amortisation and impairments – 20,583 – 13,891

in CHF 1,000 2014 2013

Rental income 674 815Royalty income 155 368Income from other services 449 1,200Income from dissolution of other provisions – 437Income from insurance reimbursements 2,144 1,126Profit from the sale of non-current assets 6 –Income from dissolution of restructuring provisions 137 –Other operating income 9 533Total 3,574 4,479


11. Other operating expense

12. Result from investment properties

13. Restructuring costs

As part of the implementation of Von Roll’s current strategy and the “Delta Integrale” transformation programme, which comprises the elements “Focus & Growth”, “Increasing Efficiency”, “Reorganisation” and “Employee Motivation”, Von Roll has decided upon the following restructuring measures:

Closure of the plant in Dunstable, UKThe site in Dunstable (England), which belongs to Von Roll UK Ltd., was closed in December 2014.

This site processed wire products for the service and repair market and sold them to local customers, mainly in small quantities. The negative market trend over the past few years, poor profitability and limited market prospects for this specific business do not have a long-term place in Von Roll’s strategy and were not sustain-able in the long run.

The 11 employees affected were informed in May 2014.

Closing the site is expected to cost CHF 1.2 million. Costs were mainly incurred in the form of personnel expenses, site clearance and scrapping charges as well as costs for unfavourable contracts. Provisions have been recognised to cover all costs and most of them have already been incurred.

Transfer of liquids operations to Schenectady, USAVon Roll is to set up a new centre of excellence for the liquids sector (resins and varnishes) in Schenectady, USA. This project requires significant investment in equipment and infrastructure and will unfortunately mean closing our Monmouth Junction site in mid-2015. The 25 operational employees affected, who were key to the success of the site, have been informed about the decision.

Consolidating our American liquids operations marks an important step towards integrating our production capacities. By combining operating activities, Von Roll can increase its overall capacity utilisation and productivity and become more competitive while also streamlining its product range.

in CHF 1,000 2014 2013

Restructuring costs (Note 13) – 24,357 –Impairment on goodwill (Note 19) – 2,019 –Rental expenses for sublet areas – 619 – 698Expenses for withholding taxes – – 462Legal expenses 4 – 45Expenses for damages – 586 – 1,672Loss from the disposal of non-current assets – – 278Other operating expense – 534 – 1,106Total – 28,111 – 4,261

in CHF 1,000 2014 2013

Income from investment property 3,413 2,926Expense for investment property – 711 – 1,131Depreciation on investment property (Notes 9 and 21) – 643 – 188Total 2,059 1,607


Closing the site is expected to cost CHF 1.4 million. Costs will mainly be incurred in the form of personnel expenses and charges for site clearance and scrapping.

Consolidation of lamination operations in the USALamination operations in the USA are currently split between the sites in Schenectady (mica and composites sector) and New Haven (composites sector). Both centres require significant investment in modernisation to guarantee production capacity and become more competitive in North America. The plant optimisation plans include consolidating lamination operations at a single site to reduce production risks and increase efficiency with minimal investment. Renovation and demolition work will be required to modernise the production facil-ities. Provisions amounting to CHF 6.2 million were set aside for the restructuring measures.

Concentration of production at a single plant in Nelamangala, IndiaActivities in India focus on the wire sector, with production currently based at three sites in the Bangalore region. The plants in Nelamangala and Peenya process a similar volume of business, while a further production site belonging to Pearl Metal Products Pvt. Ltd. in Peenya is significantly smaller. At the moment, the plants are not very productive as there are a large number of them, which results in a large workforce, more repairs and considerable material wastage. To consolidate the plants, the two in Peenya will be closed and incorporated into the existing one in Nelamangala. Closing the two sites and incorporating them into the new production site means another major reduction in personnel. Restructuring provisions totalling CHF 2.1 million were set aside for these measures.

Closure of the production site in Düren, GermanyAs part of the announced strategy and the associated optimisation of production sites, Von Roll Holding AG plans to close its plant in Düren (Germany) in the second half of 2015.

This plant employs around 120 staff. The moulded parts product range is to be discontinued when the plant closes.

Provisions for all associated restructuring expenses were set aside in the current financial year, 2014. The expenses in question relate primarily to personnel measures, demolition costs and rent.

By consolidating the plants, we are adjusting the necessary capacity in line with demand, which will enable us to utilise production resources sustainably at our sites. This will increase production efficiency and make us more competitive.

14. Financial income

in CHF 1,000 20142013

( restated)

Interest received 1,188 1,190Gain from financial hedging activities 801 398Foreign exchange gains 8,815 7,489Other financial income 90 61Total 10,894 9,138


15. Financial expense

16. Income tax

The income tax rate in accordance with the Swiss tax burden corresponds to the rate of income tax paid by operational Group companies domiciled at the headquarters. In principle, the fluctuation in the line “Applicable tax rates differing from Swiss statutory rate” depends on the breakdown of the results among the various sub-sidiaries and tax jurisdictions.

In addition to the post-tax result recognised through profit or loss, TCHF 4,527 (2013: TCHF –3,729) was recog-nised in other comprehensive income and TCHF –747 (2013: TCHF 0) was recognised directly in equity in the reporting year.

in CHF 1,000 20142013

( restated)

Interest expense on bank debts – 102 – 80Interest expense on pension funds – 907 – 856Bank charges – 520 – 486Interest expense on bonds – 7,409 – 6,130Interest expense on loans and other financial liabilities – 446 – 639Foreign exchange losses – 9,099 – 7,017Loss from financial hedging activities – 249 – 635Loss from operative hedging activities – – 7Impairments on financial assets (Note 22) – 168 –Other financial expense – 1 – 3Total – 18,901 – 15,853

in CHF 1,000 20142013

( restated)

Result before tax from continuing operations – 40,502 – 12,828Result before tax from discontinued operations – 53,539 – 21,323Income taxes at Swiss statutory rate 21.0 % 21.0 %Expected tax income 19,749 7,172Applicable tax rates differing from Swiss statutory rate – 2,749 – 3,442Non-tax-deductible expenses – 12,050 – 3,558Non-taxable income 1,256 1,511Variation of tax rate – – 38Increase in unrecognised tax losses – 7,750 – 6,253Utilisation of unrecognised tax losses 7,030 387Taxes relating to prior periods and other items – 1,648 2,049Effective tax income (+) / expense (–) 3,838 – 2,172 Tax expense is as follows: Current tax – 3,325 – 3,720Deferred tax 7,162 1,548Total tax income (+) / expense (–) 3,837 – 2,172Thereof reported under discontinued operations – – 41 Taxes paid 4,189 4,724


Deferred taxes arising from timing differences between the tax base and their carrying amounts consisted of the following items:

As at 31 December 2014, there are no temporary differences arising from investments in Group companies.

In view of the likelihood of netting tax losses carried forward against future taxable earnings, as at 31 Decem-ber 2014 deferred income tax assets on tax losses carried forward and on other temporary differences totalling TCHF 26,523 (2013 : TCHF 16,926) were capitalised at a number of subsidiaries. In line with the business plans, deferred income tax assets were capitalised on tax losses carried forward in the amount of TCHF 5,717 (2013 : TCHF 1,902) at subsidiaries that posted a loss in 2014.

The above amounts are included in the following balance sheet items:

Current tax is included in the balance sheet as follows:

Movements in tax losses carried forward are as follows:

Assets Liabilities Assets Liabilities

in CHF 1,000 31.12.2014 31.12.2014 31.12.2013 31.12.2013

Current assets 4,710 277 2,151 467Non-current assets 3,288 7,820 4,442 14,726Short-term liabilities 4,602 3,565 1,889 827Long-term liabilities 7,629 695 5,550 612Tax loss 53,696 – 35,998 –Valuation allowance on deferred tax assets and tax losses – 47,402 – – 33,104 –Deferred taxes (gross) 26,523 12,357 16,926 16,632Offsetting – 5,069 – 5,069 – 3,518 – 3,518Deferred taxes (net) 21,454 7,288 13,408 13,114

in CHF 1,000 31.12.2014 31.12.2013

Deferred tax assets 21,454 13,408Deferred tax liabilities – 7,288 – 13,114Net deferred tax assets 14,166 294

in CHF 1,000 31.12.2014 31.12.2013

Taxes receivable 4,087 2,427Taxes payable – 4,019 – 2,846Net current taxes receivable (+) / payable (–) 68 – 419

in CHF 1,000 2014 2013

At 1 January 231,049 184,772Translation effects 183 1,113Adjustments of previous year’s values – 7,533 – 5,495Increase in tax losses 128,087 51,998Capitalised and provided tax losses utilised – 45,741 – 1,339Changes in the scope of consolidation (Note 2) – 4,148 –Tax losses carried forward at 31 December 301,897 231,049


Expiry dates for tax losses carried forward are as follows:

Tax losses carried forward are recognised to the extent that it is probable that future taxable profits will be avail-able. Cumulative tax losses of TCHF 220,122 (2013 : TCHF 115,671) relate to tax losses in tax-privileged holding companies. For the reasons mentioned above, no deferred taxes were capitalised on tax losses carried forward amounting to TCHF 102,645 (2013 : TCHF 45,639). Of the total tax losses carried forward as at 31 December 2014, TCHF 266,692 (2013 : TCHF 210,593) relate to tax losses carried forward on which no deferred income tax assets have been capitalised. Most of these tax losses carried forward will expire in four or in subsequent years.

17. Earnings per share

The dilution effect relates to the option to exercise conversion rights in connection with the issuing of the convertible bonds on 18 June 2014. The diluted earnings per share are the same as the undiluted earnings per share because the convertible bonds have an antidilutive effect. Please refer to Note 31 “Financial liabilities” for further explanation.

in CHF 1,000 31.12.2014 31.12.2013

In 1 year 1,700 266In 2 years 1,470 1,269In 3 years 20,471 1,056In 4 years and more 278,256 228,458Total 301,897 231,049

2014 2013

Basic earnings per share Net income attributable to shareholders in CHF 1,000 – 90,129 – 36,314Average number of shares outstanding in shares 177,712,693 177,717,425Basic earnings per share in CHF – 0.507 – 0.204 Diluted earnings per share Net income attributable to shareholders in CHF 1,000 – 90,129 – 36,314Increase in net income attributable to shareholders, assuming all outstanding convertible bonds are exercised 1,121 –Average number of diluted shares outstanding in shares 191,361,171 177,717,425Diluted earnings per share in CHF – 0.507 – 0.204 The calculation of diluted earnings per share is based on the following data: Average number of shares outstanding in shares 177,712,693 177,717,425Effect of dilutive share options in share equivalent 13,648,478 –Average number of dilutive shares outstanding in shares 191,361,171 177,717,425


18. Property, plant and equipment

Technical installations and machinery include an amount of TCHF 27,248 (2013 : TCHF 11,625) relating to property, plant and equipment under construction.

Property, plant and equipment are reviewed for impairment annually or whenever events or changes in circum-stances indicate that the carrying amount may not be recoverable. This impairment test has been determined using the discounted cash flow method applying discount rates ranging from 7.8 % to 10.9 %. The management estimates discount rates using rates that reflect current market assessments of the time value of money and the risks specific to the cash-generating units. In addition, the management assumes an annual growth rate of 1.5 % for the calculation of the perpetual annuity.

in CHF 1,000

Land and

buildings

Technical installation

and machinery

Plant and office

equipment Total

Cost Balance at 1 January 2013 122,350 346,640 30,008 498,998Additions 1,387 18,061 955 20,403Changes in the scope of consolidation (Note 2) 9,786 450 86 10,322Disposals – 938 – 2,210 – 651 – 3,799Currency translation – 570 – 272 – 152 – 994Reclassifications – 389 – 1,123 – 1,151 – 2,663Balance at 31 December 2013 131,626 361,546 29,095 522,267 Balance at 1 January 2014 131,626 361,546 29,095 522,267Additions 511 29,230 531 30,272Disposals – 179 – 12,275 – 1,125 – 13,579Changes in the scope of consolidation (Note 2) – 6,624 – 59,790 – 7,022 – 73,436Currency translation 696 1,905 224 2,825Reclassifications 3,119 – 7,690 5,122 551Balance at 31 December 2014 129,149 312,926 26,825 468,900 Accumulated depreciation Balance at 1 January 2013 – 101,576 – 277,080 – 25,193 – 403,849Depreciation (Note 9) – 1,746 – 9,887 – 1,035 – 12,668Impairments (Note 9) – 14 – – 300 – 314Disposals 918 1,965 629 3,512Currency translation 206 – 570 53 – 311Reclassifications 167 – 1,307 1,411 271Balance at 31 December 2013 – 102,045 – 286,879 – 24,435 – 413,359 Balance at 1 January 2014 – 102,045 – 286,879 – 24,435 – 413,359Depreciation (Note 9) – 1,939 – 10,733 – 1,683 – 14,355Impairments (Note 9) – 588 – 1,528 – 2 – 2,118Disposals 176 11,747 1,084 13,007Changes in the scope of consolidation (Note 2) 5,207 51,932 6,685 63,824Currency translation – 222 – 645 – 164 – 1,031Reclassifications – 18 2,370 – 3,991 – 1,639Balance at 31 December 2014 – 99,429 – 233,736 – 22,506 – 355,671 Net carrying amounts at 31 December 2013 29,581 74,667 4,660 108,908Net carrying amounts at 31 December 2014 29,720 79,190 4,319 113,229


Von Roll prepares cash flow forecasts derived from the most recent financial budget 2015 approved by the man-agement and the Board of Directors and extrapolates cash flows for 2016 to 2019 and following years based on the anticipated growth rates for the business model. In setting the planning parameters, sufficient allowance was made for growth based on corporate targets and current global economic conditions.

Impairment tests in 2014 revealed the need for impairment in the amount of TCHF 2,118 (2013: 314). TCHF 960 of this amount related to the Von Roll Insulation segment, TCHF 1,060 to the Von Roll Composites segment and TCHF 98 to the Other activities segment. TCHF 71 of the impairment amount is included in manufacturing costs, TCHF 97 in administration expense and TCHF 1,950 in other operating expense.

19. Goodwill

In accordance with IFRS 3 (revised), goodwill is tested for impairment at year end or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The impairment test has been determined using the discounted cash flow method applying discount rates ranging from 7.8 % to 10.8 % (2013 : 6.9 % to 12.7 %). The management estimates discount rates using rates that reflect current market assessments of the time value of money and the risks specific to the cash-generating units. In addition, the management assumes an annual growth rate of 1.5 % for the calculation of the perpetual annuity for all units (2013 : 1.5 %). An increase in the discount rates of 1 percentage point would increase the impairment amount in the Other activities segment by TCHF 1,340.

Von Roll prepares cash flow forecasts derived from the most recent financial budget for the year 2015 approved by the management and the Board of Directors and extrapolates cash flows for 2016 to 2019 and following years based on the anticipated growth rates for the business. In setting the planning parameters, sufficient allowance was made for growth based on corporate targets and current global economic conditions. For the cash-generating units corresponding to legal entities and assigned to the Von Roll Insulation segment (John C. Dolph Company, Von Roll Austral Inc., Albesiano Sisa Vernici S.r.l. and Von Roll India), growth rates of between – 4.2 % and 19.9 % have been assumed in the planning phase 2016 to 2019 (2013 : between 4.5 % and 23.2 %). The anticipated EBIT margins are between 1.6 % and 14.5 % (2013 : between 4.5 % and 14.0 %). No goodwill is allo-cated to the Von Roll Composites segment (2013 : no goodwill). For the company in the Other activities segment (Von Roll BHU Umwelttechnik GmbH), the management is anticipating growth rates in the planning phase of up to 55.8 % (2013 : up to 45.0 %) and EBIT margins of between 3.0 % and 3.4 % (2013 : 3.1 % to 5.5 %). These high growth rates are the result of the increased focus being placed on large-scale projects in the water industry.

The impairment tests run in 2014 revealed that goodwill allocated to Von Roll Austral Inc. in the amount of TCHF 2,019 required impairment due to its business performance (2013 : no impairment needed). This is reported under other expenses in the Von Roll Insulation segment.

in CHF 1,000 2014 2013

Balance at 1 January 13,968 14,474Additions (Note 2) – 489Impairments – 2,019 –Currency translation 1,258 – 995Balance at 31 December 13,207 13,968


20. Intangible assets

Other intangible assets primarily comprise a licence which was revalued as part of the acquisition of Albesiano Sisa Vernici S.r.l. (see Note 2 “Changes within the consolidated Group”).

In financial year 2014, internally generated intangible assets in the amount of TCHF 1,292 (2013: TCHF 1,770) were capitalised.

in CHF 1,000

Trademarks, licenses and similar rights Customer list

Other intangible

assets Total

Cost Balance at 1 January 2013 22,739 18,668 28,745 70,152Additions 4,248 – 10 4,258Changes in the scope of consolidation (Note 2) – – 1,539 1,539Disposals – 34 – – 14 – 48Reclassifications – 38 – – – 38Currency translation – 11 740 – 160 569Balance at 31 December 2013 26,904 19,408 30,120 76,432 Balance at 1 January 2014 26,904 19,408 30,120 76,432Additions 3,599 – – 3,599Disposals – 251 – – 64 – 315Changes in the scope of consolidation (Note 2) – – 18,966 – 7,365 – 26,331Reclassifications 101 – – 101Currency translation 19 – 442 1,718 1,295Balance at 31 December 2014 30,372 – 24,409 54,781 Accumulated amortisation Balance at 1 January 2013 – 11,587 – 87 – 25,363 – 37,037Amortisation (Note 9) – 1,112 – – 946 – 2,058Disposals 8 – 5 13Reclassifications – 29 – 1 – 28Currency translation 17 – 52 69Balance at 31 December 2013 – 12,703 – 87 – 26,251 – 39,041 Balance at 1 January 2014 – 12,703 – 87 – 26,251 – 39,041Amortisation (Note 9) – 1,725 – – 1,139 – 2,864Disposals 248 – 64 312Changes in the scope of consolidation (Note 2) – 89 7,365 7,454Reclassifications – 53 – – – 53Currency translation – 16 – 2 – 1,488 – 1,506Balance at 31 December 2014 – 14,249 – – 21,449 – 35,698 Net carrying amounts at 31 December 2013 14,201 19,321 3,869 37,391Net carrying amounts at 31 December 2014 16,123 – 2,960 19,083


Intangible assets are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test has been determined using the discounted cash flow method applying discount rates ranging from 7.8 % to 10.9 %. The management estimates discount rates using rates that reflect current market assessments of the time value of money and the risks specific to the cash-generating units. In addition, the management assumes an annual growth rate of 1.5 % for the calculation of the perpetual annuity.

Von Roll prepares cash flow forecasts derived from the most recent financial budget for the year 2015 approved by the management and the Board of Directors and extrapolates cash flows for 2016 to 2019 and following years based on the anticipated growth rates for the business. In setting the planning parameters, sufficient allowance was made for growth based on corporate targets and current global economic conditions.

21. Investment property

The fair value of investment property stands at TCHF 22,072 (2013 : TCHF 24,707). Fair values for buildings have been determined using the discounted cash flow model, applying discount rates ranging from 4.5 % to 5.15 %. Fair values for unimproved land have been determined on the basis of current market prices. Fair values are calculated regularly (every five years) by independent and qualified experts. The latest valuations were performed in November 2014. The next valuation will be performed in 2019.

in CHF 1,000 2014 2013

Cost Balance at 1 January 40,790 37,988Additions 1,609 297Reclassifications from fixed assets 1,430 2,505Balance at 31 December 43,829 40,790 Accumulated depreciation Balance at 1 January – 34,458 – 34,223Depreciation (Notes 9 and 12) – 643 – 188Reclassifications from fixed assets 15 – 47Balance at 31 December – 35,086 – 34,458 Net carrying amounts at 31 December 8,743 6,332


22. Financial assets

Financial assets mainly consist of a receivable in the amount of TCHF 36,000 acquired from the buyer of Von Roll Transformers Ltd. and derivative financial instruments in the amount of TCHF 525 as well as an investment of over 20 % in Transalpina GmbH, Vienna, which is not shown separately in the balance sheet for materiality reasons. Von Roll earned dividend income amounting to TCHF 27 (2013: TCHF 0) from Transalpina GmbH in 2014.

The 30 % investment in WaRoTec GmbH, Aschaffenburg, was written off during the reporting year. No investment income was generated from WaRoTec GmbH as an associated company in 2014 (2013 : TCHF 0).

Valuations at fair value recognised in the balance sheetFinancial instruments valued at fair value when first included are allocated to hierarchical levels 1 to 3 according to the observability of valuation bases.

» Level 1 valuations at fair value are based on quoted prices (unadjusted) in an active market for identical assets and liabilities.

» Level 2 valuations at fair value are based on data other than the prices quoted in level 1. The factors used for the valuation are observable either directly (e.g. as prices) or indirectly (e.g. derived from prices).

» Level 3 valuations at fair value are based on valuation methods using parameters for assets and liabilities that are based upon non-observable market data (unobservable data).

The derivative financial instruments are the only financial assets held by the Von Roll Group which are valued at fair value. They are allocated to Level 2 of the fair value hierarchy in accordance with IFRS 7.

in CHF 1,000 2014 2013

Balance at 1 January 18,204 20,499Additions 39,016 1,519Disposals / Repayments – 4,370 – 4,098Changes in consolidation scope (Note 2) – 11,777 4Impairments (Note 15) – 168 –Currency translations – 328 280Balance at 31 December (Note 27) 40,577 18,204Of which short-term 36,525 –Of which long-term 4,052 18,204


23. List of subsidiaries

Details of Von Roll’s significant consolidated subsidiaries as of 31 December 2014 are as follows:

Name and registered officePercentage of shareholding Country

Share capital

currencyShare capital

amount ( in 1,000)Principal

activity

EMEA Von Roll Schweiz AG, Breitenbach 99.99 % CH CHF 16,000 Prod. and salesVon Roll Management AG, Au / Wädenswil 100.00 % CH CHF 1,500 ManagementVon Roll Water Holding AG, Breitenbach 97.50 % CH CHF 100 HoldingVon Roll Finance AG, Breitenbach 100.00 % CH CHF 1,000 FinanceVon Roll Insulation & Composites Holding AG, Breitenbach 100.00 % CH CHF 1,000 HoldingVon Roll Solar AG, Au / Wädenswil 95.00 % CH CHF 180 Prod. and salesVon Roll Deutschland Holding GmbH, Augsburg 100.00 % DE EUR 125 HoldingVon Roll Deutschland GmbH, Augsburg 100.00 % DE EUR 9,000 Prod. and salesVon Roll REACH GmbH, Augsburg 100.00 % DE EUR 25 ManagementVon Roll BHU Umwelttechnik GmbH, Bietigheim-Bissingen 100.00 % DE EUR 50 Prod. and salesVon Roll France S.A., Delle 100.00 % FR EUR 5,925 Prod. and salesVon Roll Isola France S.A., Delle 100.00 % FR EUR 4,928 Prod. and salesVon Roll UK Ltd, Bradford1 100.00 % GB GBP 4,000 Prod. and salesVon Roll Italia SpA, Ghisalba 100.00 % IT EUR 1,300 Prod. and salesAlbesiano Sisa Vernici S.r.l., Trofarello 100.00 % IT EUR 2,300 Prod. and salesOOO Von Roll, Moscow 100.00 % RU RUB 10 SalesAmericas Von Roll do Brasil Ltda., Fortaleza 100.00 % BR BRL 22,929 Prod. and salesVon Roll Austral Inc., Douglasville / Georgia 100.00 % US USD 2 Prod. and salesVon Roll USA, Inc., Schenectady / New York 100.00 % US USD 250 Prod. and salesJohn C. Dolph Company, Monmouth Junction / New Jersey 100.00 % US USD 434 Prod. and salesVon Roll USA Holding, Inc., Wilmington / Delaware 100.00 % US USD – HoldingAsia Pearl Insulations Pvt. Ltd, Bangalore 100.00 % IN INR 23,126 Prod. and salesVon Roll India Pvt Ltd, Bangalore 100.00 % IN INR 173,500 HoldingVon Roll Asia Pte Ltd, Singapore 100.00 % SG SGD 850 SalesVon Roll Shanghai Co. Ltd, Shanghai 100.00 % CN CHF 7,100 Prod. and salesVon Roll Trading Shanghai Co., Ltd., Shanghai 100.00 % CN CNY 1,000 SalesVon Roll Hong Kong Holding Ltd., Hong Kong 100.00 % CN CNY 10 HoldingMica Electrical (Luhe) Co., Ltd., Luhe 100.00 % CN CNY 49,418 Prod. and salesNew Jadson Electrical (Shenzhen) Co., Ltd., Shenzhen 100.00 % CN CNY 6,078 Prod. and salesTongcheng Mica Electrical Material Co., Ltd., Tongcheng 100.00 % CN CNY 10,096 Prod. and salesTongcheng Xinyu Mica Products Co., Ltd., Tongcheng 100.00 % CN CNY 3,500 Prod. and sales

1 Of which TGBP 3,750 is paid-in


24. Leasing

The carrying amounts of leased property, plant and equipment ( financial leases) as of 31 December 2014 and 31 December 2013 amount to TCHF 0. The obligations for financial lease agreements as of 31 December 2014 and 31 December 2013 amount to TCHF 0.

The obligations entered into for non-terminable operating lease agreements are listed below with the following maturities as of 31 December:

Von Roll’s operating lease agreements relate mainly to office and facility rental commitments, cars, machinery and equipment rentals.

An amount of TCHF 3,381 (2013 (restated) : TCHF 3,975), relating exclusively to operating lease payments, has been expensed to the income statement.

25. Inventories

In the reporting period, inventories amounting to TCHF 3,994 (2013 : TCHF 10,734) were valued at their lower net realisable value.

The management estimates the need for the inventory obsolescence provision based on inventory turnover.

in CHF 1,000 31.12.2014 31.12.2013

Within 1 year 2,963 2,933In 2 to 5 years 3,785 4,515More than 5 years – 38Total lease commitments of future minimum lease payments 6,748 7,486

in CHF 1,000 31.12.2014 31.12.2013

Raw materials and supplies 24,857 34,960Work in progress and semi-finished goods 14,936 31,555Finished goods 28,097 28,327Amounts due from customers under construction contracts (Note 26) 9,008 16,759Inventory obsolescence provision – 5,875 – 8,673Total 71,023 102,928


26. Construction contracts

In 2014, the construction contracts are attributable to Von Roll BHU Umwelttechnik GmbH (2013 : to Von Roll Transformers Ltd. as well). TCHF 14,308 and TCHF 29,452 in revenue were generated from construction contracts in the reporting year 2014 and in 2013 respectively. As at 31 December 2014, customers’ security deposits for construction contracts stood at TCHF 633 (2013 : TCHF 0). Advance payments by customers for construction contracts amounted to TCHF 13,598 (2013 : TCHF 4,408).

27. Trade accounts receivable

The bad debt allowances are based on specific valuation allowances and actual experience regarding the ageing structure at Von Roll.

The following table shows movements in bad debt allowances:

The book values of trade accounts receivable are equal to the maximum default risk.

in CHF 1,000 2014 2013

Construction costs incurred plus recognised profits less recognised losses to date 22,605 18,618Less progress billings – 14,651 – 1,875Total 7,954 16,743 Recognised and included in the financial statements as amounts due: From customers under construction contracts (Note 25) 9,008 16,759To customers under construction contracts (Note 34) – 1,054 – 16Total 7,954 16,743

in CHF 1,000 31.12.2014 31.12.2013

Receivables (gross) 67,362 83,753Bad debt allowance – 1,933 – 2,360Total 65,429 81,393

in CHF 1,000 31.12.2014 31.12.2013

At 1 January – 2,360 – 2,027Currency translation adjustments – 108 40Bad debt losses – 161 – 470Usage of bad debt allowance 385 –Reversal of bad debt allowance 311 97Bad debt allowance at 31 December – 1,933 – 2,360


The trade accounts receivable have the following ageing structure :

The trade accounts receivable which are not past due and which are not subject to valuation allowances, as well as the financial assets, have the following due dates:

Trade accounts receivable include amounts denominated in the following currencies :

in CHF 1,000 31.12.2014 31.12.2013

Not past due 47,794 55,180Less than 1 month past due 7,788 13,276Between 1 month and 3 months past due 3,478 5,193Between 3 months and 12 months past due 6,599 8,723More than 1 year past due 1,703 1,381Bad debt allowance – 1,933 – 2,360Total 65,429 81,393

in CHF 1,000 31.12.2014 31.12.2013

Accounts receivable, not past due 47,794 55,180Financial assets (Note 22) 40,577 18,204Less investment in associate – 110 – 283Total 88,261 73,101Thereof due in : Less than 1 month 28,253 31,166Between 1 month and 3 months 18,994 23,643Between 3 months and 12 months 1,113 2,590More than 1 year 3,901 15,702Total 52,261 73,101

in CHF 1,000 31.12.2014 31.12.2013

CHF 1,110 1,660EUR 32,525 39,025GBP 1,909 2,688USD 12,652 20,373CNY 9,498 8,287INR 7,159 6,584ILS – 1,916Other currencies 576 860Total 65,429 81,393


28. Other accounts receivable and prepaid expenses

29. Cash and cash equivalents

Cash and cash equivalents include cash held at banks and other financial institutions. They bear interest ranging from 0.0 % to 11.4 %. Cash is only deposited with financial institutions with high credit rating. As at the end of 2014, the balance of cash and cash equivalents subject to a drawing restriction amounted to TCHF 1,978 (2013: TCHF 3,023).

30. Equity

Share capitalThe share capital as of 31 December 2014 consists of 184,778,889 bearer shares, unchanged compared with 31 December 2013. The par value per share is CHF 0.10.

The Annual General Meeting on 9 April 2014 approved the creation of conditional capital. The Board of Directors is thus entitled to increase the company’s share capital by up to CHF 3,000,000 by issuing a maximum of 30,000,000 fully paid-up bearer shares each with a par value of CHF 0.10 to be subscribed for by exercising conversion rights granted in connection with debentures or similar bonds of Von Roll Holding AG or Group companies. Shareholders’ subscription rights were excluded.

in CHF 1,000 31.12.2014 31.12.2013

Receivables from employees 130 91VAT receivables 10,333 9,684Downpayments to supplier 1,490 611Other receivables 2,087 3,183Prepaid expense and deferred income 3,615 4,237Total 17,655 17,806

in CHF 1,000 31.12.2014 31.12.2013

CHF 43,375 12,130EUR 11,533 16,386GBP 3,319 1,869USD 11,414 15,616CNY 4,898 4,498INR 6,274 7,112ILS 565 2,262Other currencies 1,045 1,615Total 82,423 61,488


Treasury sharesAs at 31 December 2014, Von Roll holds 7,067,629 (2013 : 7,062,660) treasury shares which were acquired for an average stock price of CHF 8.85 (2013 : CHF 9.08). This represents a shareholding of 3.82 % (2013: 3.82 %) of the share capital issued.

Composition of the major shareholdersThe composition of the major shareholders is presented in the notes to the financial statements of Von Roll Holding AG.

Stock option plan for senior and middle managementIn 2008, a stock option plan was introduced for senior and middle management. Non-transferable stock options may be issued to these managers each year; however, there is no obligation to grant any options. The options may be exercised at any time for a period of five years for a price determined at the grant date if, at the time of exercise, the manager fulfils the appropriate requirements.

The corresponding personnel expenses recognised in 2014 amount to TCHF 0 (2013: TCHF 0). Social security contributions related to options are chargeable only as of the exercise date. Taxes are to be borne by the option holder.

a) 2008 trancheAll options of the tranche issued in 2008 lapsed in 2013.

b) 2009 trancheThe first 33⅓ % of the options granted could be exercised from 1 February 2010. An additional 33⅓ % could be exercised on the same date in both 2011 and 2012. The options can only be settled in shares (equity settlement). The potential commitment to provide shares for options is covered solely by the purchase of shares on the stock exchange.

In 2009, a total of 596,000 options to acquire 596,000 shares were granted to members of senior and middle management. The exercise price was fixed at CHF 11. The exercising period ended on 31 January 2014.

The options granted are valued on the basis of the Black-Scholes option pricing model and have an average fair value of CHF 1.25. The volatility rate of 43 % is based on historically observed stock prices. The risk-free interest rate of 2.32 % is based on Swiss government bonds with similar maturities. An underlying dividend yield of 1.56 % and fluctuation of 10 % per year are expected.

No options were exercised in the reporting period. As of 31 December 2014, all options of the tranche issued in 2009 had lapsed (as of 31 December 2013: 190,830).

Number

of shares in CHF 1,000Number

of shares in CHF 1,000

Share capital 2014 2014 2013 2013

At 1 January 184,778,889 18,479 184,778,889 18,479At 31 December 184,778,889 18,479 184,778,889 18,479 Treasury shares

At 1 January 7,062,660 54,991 7,060,464 58,825Purchase / sale of treasury shares 4,969 – 3,490 2,196 – 3,834At 31 December 7,067,629 51,501 7,062,660 54,991


31. Financial liabilities

Convertible bond – 2014 to 2020As of 18 June 2014, Von Roll Holding AG issued unsecured convertible bonds (stock symbol : ROL14; Swiss security number : 24523928; ISIN: CH0245239287 ) of CHF 61 million due in 2020. They are convertible into 25,416,870 bearer shares (subject to any adjustments due to the dilution protection clause) of Von Roll. The shares to be delivered upon con version of the bonds will be shares made available from the condi-tional new share capital (see Note 8 “Share capital, treasury shares and dividends”).

The conversion price is set at CHF 2.40. The offe ring and redemption price are set at 100 % each. The convertible bonds will carry a coupon of 1.250 % per annum, payable annually in arrears. Existing shareholders have been granted advance subscription rights to subscribe for the convertible bonds in pro portion to their current shareholding. Through the con version of the con vertible bonds, one new share is created for seven existing shares. Accordingly, based on an issue total of CHF 61 million, each shareholder has the right to purchase a bond of CHF 1,000 nominal amount for every 2,913 shares held on 2 June 2014 prior to the start of trading.

Any exercise of conversion rights will dilute ear nings per share. The convertible bond can be redeemed early at any time if more than 85 % of the original bond total is converted and /or redeemed or, after 9 July 2016, if the closing price of the Von Roll Holding AG registered share on the SIX Swiss Exchange (SIX) is 130 % or more of the conversion price over a period of 20 out of 30 consecutive trading days.

A convertible bond is a compound financial instrument, into which a conversion right is embedded for the investor. Under IAS 32, convertible bonds must be split into a liability and an equity com ponent. The early redemption options represent additional em bedded derivatives.

On initial recognition of the convertible bond, the liability and equity components were split as follows: In a first step, the fair value of the liability component was determined. This corresponds to the present value of future payments from the convertible bond ( interest and nominal amount). They were discounted at an interest rate that would apply to an identical bond with no conversion right. The difference between the fair value of the liability component calculated in this way and the nominal amount was recognised as the equity component. The issuance costs were split pro rata between the liability and equity components.

Fair value Book value

in CHF 1,000 31.12.2014 31.12.2013 31.12.2014 31.12.2013

Short-term portion of bonds and loans 1,523 1,117 1,523 1,117Other financial liabilities 1,695 2,068 1,695 2,068Short-term financial liabilities 3,218 3,185 3,218 3,185Bond 150,000 150,000 149,084 149,218Convertible bond 61,000 – 53,225 –Loans and other financial liabilities 120 1,394 120 1,394Long-term financial liabilities 211,120 151,394 202,429 150,612Financial liabilities 214,338 154,579 205,647 153,797


The proceeds from the issue of the convertible bond totalled TCHF 60,177. They can be derived as follows:

The equity component remains unchanged under equity until bonds are converted. The difference of TCHF 8,896 as of 18 June 2014 between the carrying amount of the liability component (TCHF 52,104) and the redemption amount (TCHF 61,000) will be amortised over the residual term of the convertible bond until 18 June 2020 using the effective interest method.

Deferred tax liabilities must be recognised on the difference between the taxable value of the convertible bond and the carrying amount of the liability component at the holding tax rate of 8.5 % and released through profit and loss over the term of the convertible bond.

Due to the one-year lock-up period no rights have been converted during the reporting period.

The profit and loss statement shows accrued interest of TCHF 407 and a further TCHF 715 due to compounding, equating to an effective interest rate of 4.0 %.

Bond – 2012 to 2016On 24 October 2012, Von Roll Holding AG raised long-term external funds in the form of a domestic bond denominated in Swiss francs ( ISIN: CH0196238601) in the amount of CHF 150 million. The bond has an annual coupon of 4.0 % and a term of four years ( final maturity on 24 October 2016). The effective interest rate applied is 4.2 %.

The following table shows the due dates for the company’s financial liabilities compared to the previous year :

On 31 December 2014, Von Roll had TCHF 6,645 (2013 : TCHF 7,093) in unused credit facilities available.

in CHF 1,000

Convertible bond ( liability component) 52,816Less proportional issue costs – 712Net liability component 52,104

Equity component before issue costs 8,184Less proportional issue costs – 111Less deferred taxes – 747Net equity component 7,326

Deferred taxes 747

Total proceeds of issue 60,177

in CHF 1,000 31.12.2014 31.12.2013

Within 1 year 3,218 3,185In 2 years 149,204 955In 3 years – 149,218In 4 years – 439In 5 years and more 53,225 –Total 205,647 153,797


As of 31 December 2014, there are financial liabilities outstanding in the following currencies :

As of 31 December 2013, there were financial liabilities outstanding in the following currencies:

Most of the financial liabilities are outstanding in the local currency of the subsidiaries. Risks from currency translation occur only if the transactions of a subsidiary are denominated in a different currency from the presentation currency CHF or in a currency other than the respective local currency. To manage the foreign exchange risk from future commercial transactions, Von Roll uses forward contracts whenever necessary.

Interest rates for financial year 2014 were as follows :

Interest rates for financial year 2013 were as follows :

Borrowings issued at variable rates expose Von Roll to interest rate risks and may result in higher interest rate expense in future. Financial liabilities with a fixed interest rate include the risk of fluctuations in value. The corresponding fair values are shown above. The financial liabilities of Von Roll are mainly denominated in Swiss francs. They are almost entirely based on fixed interest rates and are not hedged. An increase of 1 % in the interest rate on variable-interest financial liabilities would reduce the pre-tax result by TCHF 12 (2013 : TCHF 19).

in 1,000 CHF EUR Other Total

Bonds 203,818 – – 203,818Loans and other financial liabilities 85 1,744 – 1,829Total 203,903 1,744 – 205,647

in 1,000 CHF EUR Other Total

Bond 150,314 – – 150,314Loans and other financial liabilities 170 3,313 – 3,483Total 150,484 3,313 – 153,797

Average interest rate in % CHF EUROther

currencies

Bond 4.00 % – –Convertible bond 1.25 % – –Bank debts – 2.61 % –Loans and other financial liabilities 0.30 % – –

Average interest rate in % CHF EUROther

currencies

Bond 4.00 % – –Bank debts – 2.43 % –Loans and other financial liabilities 0.30 % – –


32. Provisions

Staff-relatedStaff-related provisions mainly include contributions to employee anniversary awards and pension plans.

Environmental provisionsFuture requirements for Von Roll to take action to correct in accordance with local laws and directives the environmental impact of sediments and emissions of chemical substances caused by Von Roll and third parties, as well as the associated costs are inherently difficult to estimate. The material components of environmental provisions are the costs of completely cleaning and restoring contaminated sites and of treating and containing contamination at sites where the environmental exposure is less severe. Von Roll believes that its total reserves for environmental restoration are adequate, based on currently available information. However, given the inherent difficulties, the necessary funds and the timing of future outflows cannot be reliably estimated.

Contingency and commitmentsContingency and commitments consist mainly of provisions for customer claims, guarantees and warranties.

Legal claimsLegal claims consist mainly of provisions for ongoing legal proceedings.

RestructuringYou can find detailed information on the restructuring provisions in Note 13.

in CHF 1,000Staff

related

Environ- mental

restoration

Contingency & Commit-

mentsLegal

claimsRestruc-

turing Other Total

Balance at 1 January 2013 2,093 7,698 1,827 589 274 7,817 20,298Additions 75 1,672 706 285 – 8,406 11,144Unused – – – 225 – 3 – 228 – 226 – 682Utilised – 275 – – 566 – 249 – – 2,993 – 4,083Changes in the scope of consolidation (Note 2) – – – – – 42 42Reclassifications – – – 323 – 6 – – 82 – 411Currency translation 16 – 33 2 1 4 – 15 – 25Balance at 31 December 2013 1,909 9,337 1,421 617 50 12,949 26,283Of which short-term – – 1,421 281 50 9,099 10,851Of which long-term 1,909 9,337 – 336 – 3,850 15,432

Balance at 1 January 2014 1,909 9,337 1,421 617 50 12,949 26,283Additions 1,123 2,000 970 962 24,230 4,445 33,730Unused – – – 307 – 25 – 118 – 171 – 621Utilised – 937 – 230 – 303 – 373 – 2,687 – 5,892 – 10,422Changes in the scope of consolidation (Note 2) – – – – 25 – – 2,936 – 2,961Reclassifications – – – – 29 – – – 29Currency translation – 18 128 – 2 – 4 239 – 79 264Balance at 31 December 2014 2,077 11,235 1,779 1,123 21,714 8,316 46,244Of which short-term – 2,000 1,779 – 17,508 4,360 25,647Of which long-term 2,077 9,235 – 1,123 4,206 3,956 20,597


Other provisionsOther provisions consist of provisions which could not be allocated to any other categories, for example repurchase obligations for bobbins, obligations arising from unfavourable contracts and repair costs.

33. Trade accounts payable

Trade accounts payable fall due as follows:

Trade accounts payable comprise amounts denominated in the following currencies :

34. Other current liabilities and accruals

In the reporting year, other current liabilities and accruals mainly comprised provisions for personnel expenses, including annual leave, overtime and bonuses of TCHF 7,356 (2013 : TCHF 12,115) and accruals of TCHF 5,788 (2013 : TCHF 5,551).

in CHF 1,000 31.12.2014 31.12.2013

Less than 1 month 14,077 17,285Between 1 month and 3 months 4,986 13,463Between 3 months and 12 months 4,910 6,497More than 1 year – 9Total 23,973 37,254

in CHF 1,000 31.12.2014 31.12.2013

CHF 2,204 3,170EUR 13,745 16,449GBP 314 428USD 3,247 7,615CNY 2,834 1,999INR 1,181 1,635ILS – 5,428Other currencies 448 530Total 23,973 37,254

in CHF 1,000 31.12.2014 31.12.2013

Advances from customers 3,661 5,358VAT payables 5,859 5,517Amounts due to customers under construction contracts (Note 26) 1,054 16Social security payables 2,569 3,120Payables to employees 951 1,418Other deferred income and accruals 13,144 17,666Other accounts payable 4,052 4,057Total 31,290 37,152


35. Contingent liabilities and guarantees

Contingent liabilities and guarantees fell by TCHF 5,732 year-on-year. This decrease is mainly due to the sale of Von Roll Transformers Ltd. in the amount of TCHF 7,554 and an increase in new guarantees issued for water projects in the amount of TCHF 1,765.

Von Roll Holding AG has issued letters of comfort to various subsidiaries for existing bank loans. None of these loans was drawn down as at the balance sheet date 2014.

36. Purchase commitments

The minimum purchase commitments for goods relate primarily to the purchase of copper. Von Roll has not entered into any additional financial or contractual commitments for tangible assets.

37. Pledged assets

As at the reporting date of 31 December 2014, no assets are pledged. As at 31 December 2013, trade accounts receivable amounting to TCHF 4,167 were pledged.

in CHF 1,000 31.12.2014 31.12.2013

Guarantees 14,307 20,075Warranty obligations 251 215Total 14,558 20,290

in CHF 1,000 31.12.2014 31.12.2013

For property, plant and equipment 4,407 3,082Minimum purchase commitments for goods 1,471 12,120Other non-recorded commitments 698 728Total 6,576 15,930


38. Employee benefits

The Group operates different pension plans in Switzerland and abroad for employees who satisfy the participation criteria. They include both defined benefit and defined contribution plans which insure the Group’s employees against death, disability and retirement. The Group also has plans covering anniversary payments or other benefits linked to time served, which qualify as plans for other employee benefits due in the future or as post-employment plans.

Defined contribution plansThe Group offers defined contribution plans to employees that satisfy the eligibility criteria. The company is obliged to pay a fixed percentage of employees’ annual salary to these pension schemes. Employees have also to make contributions to some of these plans. These are usually deducted from their monthly salary by the employer and likewise paid to the pension fund. Apart from the payment of contributions, the employer currently has no further obligations.

During financial year 2014, the employer’s contribution to defined contribution plans amounted to TCHF 1,281 (2013 : TCHF 1,621).

Defined benefit plans The Group funds defined benefit plans for the employees who satisfy the criteria to join such plans. The most significant plans of this kind are located in Switzerland and the USA. Other plans are located in France, Germany, India, Israel and Italy.

a) Pension funds in SwitzerlandThe Group operates various pension schemes for employees in Switzerland. The plans are either organised through a separate foundation or through an affiliation to a collective foundation of an insurance company. The foundations are governed by foundation boards. The foundation board of the pension fund that covers the mandatory benefits is made up of an equal number of employee and employer representatives. The main duties of the foundation boards include decisions about the plan regulations including the level of the contributions, the organisation of the foundation and the setting of the investment strategy. As decisions are made by the foundation board, the only influence exerted by the employer is through its representatives.

The benefits mainly depend on a retirement savings account. The annual retirement credits and the interest will be credited to the retirement savings account (there is no option to credit negative interest). At retirement age, the insured members can choose whether to take a pension for life, which includes a spouse’s pension, or a lump-sum payment. In addition to retirement benefits, the plan benefits also include disability and death benefits. Insured members may also buy into the scheme to improve their pension provision up to the maximum amount permitted under the regulations or may withdraw funds early to purchase a residential property for personal use. On leaving the company, the retirement savings will be transferred to the pension institution of the new employer or to a vested benefits institution. This type of benefit may result in pension payments varying considerably between individual years.

In terms of defining the benefits, the minimum requirements of the Swiss Federal Act on Occupational Old Age, Survivors’ and Invalidity Pension Provision (BVG) and its implementing provisions must be observed. The BVG defines the minimum pensionable salary and the minimum retirement credits. The interest rate applicable to these minimum retirement savings is set by the Swiss Federal Council at least once every two years. In 2014, this rate was 1.75 % (2013 : 1.5 %). It will be kept at 1.75 % in 2015.


The employer is exposed to actuarial risks arising from the plan setup and the legal provisions of the BVG. The main risks are investment risk, interest risk, disability risk and the risk of longevity.

The employer and employee contributions are set by the foundation board. The employer has to finance at least 50 % of the total contributions. In the event of a shortfall, recapitalisation contributions to eliminate the gap in coverage may be levied from both the employer and the employee.

b) Defined benefit plans in the USAThe Group operates a pension plan and a health care plan in the USA.

The pension plan is financed through a trust by employer and employee contributions. At retirement age, the normal form of the benefit is a pension for life which includes a spouse’s pension. The insured person can also opt for a lump-sum payment. Legal minimum funding requirements apply for this plan.

Under the health care plan the insured person can opt to have the same benefits between the ages of 60 and 65 as he or she had as an active employee.

The employer is exposed to actuarial risks arising from the setup of the two benefit plans. The main risks in the pension plan are investment risk, salary increase and longevity risk. In the health care plan the main risk is the increase in health care cost.

c) Other pension plansIn Germany the Group operates different company pension plans. These plans are based on different regulations and agreements between the employer and employees. Individual agreements apply to certain management employees. The most significant plans are funded directly by the employer and do not have any assets separate from the company. The plans are regulated by the German Occupational Pension Act (Betriebsrentengesetz). The most significant risks in these plans are longevity and inflation risks, which might result in pension adjustments.

The other material plans in France, India, Israel and Italy satisfy the legal requirements. The benefits of these plans are usually paid as a one-off lump sum.

The final actuarial valuation of the present values of the defined benefit obligations and the service cost were carried out on 31 December 2014 by independent actuaries using the projected unit credit method. The fair value of the plan assets was calculated as at 31 December 2014 based on the information available when the annual financial statements were prepared.


The main assumptions on which the actuarial calculations are based can be summarised as follows:

The amounts recognised in the statement of comprehensive income can be summarised as follows:

As at 31 December 2014 2013

Discount rate 1.4 % 2.5 %Future increases in salaries 1.9 % 2.0 %Future pension adjustments 0.4 % 0.3 % Life expectancy at age 65 Year of birth 1949 1948– Men 21.39 21.29– Women 23.86 23.76Year of birth 1969 1968– Men 23.16 23.09– Women 25.59 25.52

in CHF 1,000 2014 2013

Pension expense recognised in profit and loss Service cost – Current service costs – 6,197 – 7,111– Past service costs and curtailments 2,401 4,180– Plan settlements – 102 –Net interest cost – 74 – 478Termination benefits – 171 – 713Administration expense incl. taxes – 234 – 150Total defined benefit cost recognised in profit and loss – 4,377 – 4,272Thereof reported under discontinued operations – 82 – 720 Remeasurement of the defined benefit liabilities and assets recognised in OCI Actuarial losses (–) / gains (+) – Arising from changes in demographic assumptions – 60 168– Arising from changes in economic assumptions – 35,679 10,091– Arising from experiences – 620 – 447Return on plan assets (excl. amounts in net interest) 16,091 6,458Total defined benefit cost recognised in OCI – 20,268 16,270 Total defined benefit cost – 24,645 11,998


The changes in pension obligations can be summarised as follows:

Movements in pension assets are as follows:

The net pension obligation recognised in the statement of financial position can be summarised as follows:

in CHF 1,000 2014 2013

Balance of defined benefit obligation at 1 January 234,741 245,949Current service cost 6,197 7,111Contribution from plan participants 3,027 3,176Past service gain – 2,401 – 4,264Loss on curtailments – 84Liabilities extinguished on settlements – 1,918 –Termination benefits 171 713Liabilities assumed in business combinations – 880Interest expenses on the present value of the obligations 5,527 5,114Benefit payments and net transferals through pension assets – 11,606 – 11,482Benefit payments by the employer – 1,095 – 2,271Actuarial losses (+) / gains (–) 36,359 – 9,812Currency translation 2,362 – 457Balance of defined benefit obligation at 31 December 271,364 234,741

in CHF 1,000 2014 2013

Plan assets at 1 January 241,764 234,829Interest income 5,453 4,636Contributions from plan participants 3,027 3,176Contributions from the employer 3,929 4,561Assets distributed on settlement – 2,020 –Changes in the scope of consolidation (Note 2) – 124 –Benefit payments and net transferals through pension assets – 11,606 – 11,482Administrative expense paid from plan assets – 234 – 150Return on plan assets (excl. interest income) 16,091 6,458Currency translation 1,312 – 264Plan assets at 31 December 257,592 241,764

in CHF 1,000 31.12.2014 31.12.2013

Post-employment benefit obligations 31,212 25,797Pension plan assets – 17,440 – 32,819Net obligation (+) / asset (–) recognised in the statement of financial position 13,772 – 7,022


The amounts recognised in the statement of financial position are as follows:

The pension assets mainly consist of the following categories of securities :

The Swiss pension funds manage about 93 % of the total assets. The foundation boards of the Swiss pension funds issue investment guidelines for the plan assets, which include the tactical asset allocation and the benchmarks for comparing the results with a general investment universe. The pension plan assets are well diversified. The Swiss pension plans are also subject to the legal requirements on diversification and safety laid down by the BVG. It is a duty of the foundation boards of the pension funds to review whether the chosen investment strategy is appropriate with a view to providing the pension benefits and whether the risk budget is in line with the demographic structure. Compliance with the investment guidelines and the investment results from the investment advisors are reviewed quarterly. The investment strategy is also audited periodically by external investment consultants for effectiveness and appropriateness.

The plan assets include investments in the Group with a market value of TCHF 823 at 31 December 2014 and TCHF 841 at 31 December 2013.

The following table provides a breakdown of the defined benefit obligations among active insured members, former members with vested benefits and members receiving pensions. The terms of the obligations are also given:

in CHF 1,000 31.12.2014 31.12.2013

Present value of funded obligations 247,917 216,043Fair value of plan assets – 257,592 – 241,764Overfunding – 9,675 – 25,721Present value of unfunded obligations 23,447 18,699Assets not available to Group – –Net obligation (+) / asset (–) recognised in the statement of financial position 13,772 – 7,022

in CHF 1,000 31.12.2014 31.12.2013

Equities – Quoted investments 100,670 91,513– Non-quoted investments – 16Bonds – Quoted investments 109,088 101,660– Non-quoted investments – 1,981Real estate 25,476 23,769Alternative investments 6,802 5,598Qualified insurance policies 4,211 4,787Others 1,836 2,007Cash 9,509 10,433Total plan assets 257,592 241,764

in CHF 1,000 2014 2013

Active employees 147,372 125,144Vested terminations 2,202 1,729Pensioners 121,790 107,868Total defined benefit obligation 271,364 234,741 Modified duration 15.0 12.5


The main factors that bring about changes in the obligations are the discount rate, salary trends and pension indexation. Increasing or decreasing them by 0.25 % would have the following impact on the present value of the defined benefit obligations:

The health care plan is case sensitive to the medical trend rate. The following table summarises the impact of an increase or reduction of the trend rate by 1 %:

Other long-term employee benefitsThe Group operates plans in Switzerland and Germany, which provide other long-term employee benefits, primarily anniversary payments.

The net liability of these plans recognised in staff-related provisions amounts to TCHF 1,178 as at 31 December 2014 and TCHF 1,111 as at 31 December 2013. The personnel expenses reported in the income statement for financial year 2014 amount to TCHF 197 (2013 : TCHF 7).

Post-employment plansA German subsidiary offers early retirement programmes to certain employees (Altersteilzeit). The net liability of this programme recognised in staff-related provisions amounts to TCHF 32 as at 31 December 2014 and TCHF 60 as at 31 December 2013.

39. Related party transactions

Related companies and persons include associated companies and persons holding voting rights, either directly or indirectly, who could exercise a decisive influence on company management, as well as their closest relatives, Group managers and their relatives and companies subject to uniform management or decisive influence by the cited persons.

Transactions with related parties are disclosed below:

31.12.2014 31.12.2013

in CHF 1,000 + 1.00 % – 1.00 % + 1.00 % – 1.00 %

Medical trend rate 560 – 468 454 – 401

31.12.2014 31.12.2013

in CHF 1,000 + 0.25 % – 0.25 % + 0.25 % – 0.25 %

Discount rate – 9,031 9,649 – 6,860 7,292Salary increase 552 – 545 468 – 461Pension indexation 314 – 301 199 – 192

in CHF 1,000 2014 2013

Compensation of the Board of Directors and key management personnel Benefits 2,907 2,110Post-employment benefits 411 244Benefits after retirement from key management – 1,807Other – –Total 3,318 4,161


CHF 36.0 million were assumed. International Transformer AG qualifies as a related company. The sale price is based on an external valuation. Please refer to Note 2 “Changes within the consolidated Group” for more information about the transaction.

No loans, advances or guarantee obligations were granted to members of the Board of Directors and /or Executive Management or major shareholders of Von Roll Holding AG. Members of the Board of Directors, members of the management team and parties related to them held 24,269,067 shares of Von Roll Holding AG as of 31 December 2014 (2013 : 24,269,067). For detailed information, please refer to the Notes to the statutory financial statements of Von Roll Holding AG.

The principal shareholder group had undertaken to purchase all convertible bonds which were not sold during the subscription period from 2 to 11 June 2014.

Members of the Board of Directors or the management team or related persons held 8,170 convertible bonds of Von Roll Holding AG as of 31 December 2014.

40. Significant events after the balance sheet date

The timing of the decision to abandon the Swiss franc’s minimum exchange rate against the euro on 15 Janu-ary 2015 was extremely surprising. The associated exchange-rate fluctuations are expected to have a negative impact on 2015’s results. It is not yet possible to provide precise details. Von Roll has analysed the situation thoroughly and set initial countermeasures in motion. The results that these measures will achieve will only come to fruition in the medium term. Further action may be required as 2015 progresses, depending on the continued trend in the exchange rate.

There were no other events after the balance sheet date that were subject to a reporting obligation.

41. Authorisation of the consolidated financial statements

These consolidated financial statements were authorised for publication by the Board of Directors on 3 March 2015 and will be recommended for approval at the Annual General Meeting on 15 April 2015.


Report of the Statutory Auditor

To the General Meeting ofVON ROLL HOLDING AG, BREITENBACH

Report of the Statutory Auditor on the consolidated financial statements

As statutory auditor, we have audited the accompanying consolidated financial statements of Von Roll Holding AG, which comprise the statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity and notes (pages 38 to 91) for the year ended 31 December 2014.

Board of Directors’ responsibilityThe Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards ( IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of consolidated financial statements that are free from material misstatements, 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 responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards and International Standards on Auditing. These standards require that we plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatements of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements for the year ended 31 December 2014 give a true and fair view of the financial position, the result of operations and the cash flows in accordance with International Financial Reporting Standards ( IFRS) and comply with Swiss law.


Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

DELOITTE AG




Income statement of Von Roll Holding AG for the year 2014

in CHF 1,000 Note 2014 2013

Operating income 1 3,587 2,430Personnel expenses – 3,801 – 3,617Operating expense 2 – 19,587 – 11,826Net operating result – 19,801 – 13,013Income from investment 11,045 9,888Other financial income 9,252 13,195Other financial expense 5 – 48,325 – 21,270Net operating result before tax – 47,829 – 11,200Exceptional expense 3 – 188,534 – 4,676Result before tax – 236,363 – 15,876Income tax – 36 – 49Result after tax – 236,399 – 15,925


Assets

Equity and liabilities

Balance sheet of Von Roll Holding AG as at 31 December 2014

in CHF 1,000 Note 31.12.2014 31.12.2013

Long-term assets Loans and long-term receivables with Group companies 109,313 89,294Investments in Group companies 4 289,285 481,819Long-term securities 1,350 1,350Treasury shares 5 9,612 9,817Total long-term assets 409,560 582,280 Current assets Cash and cash equivalents 43,806 8,412Receivables from Group companies 3 1,944 6,802Receivables from third parties 1,509 1,518Prepaid expense and accruals 1,275 809Total current assets 48,534 17,541Total assets 458,094 599,821

in CHF 1,000 Note 31.12.2014 31.12.2013

Equity Share capital 6 18,479 18,479Legal reserves – General legal reserves 11,123 11,123– General legal reserves ( from capital contribution) 21,876 21,876– General reserves 3,490 –– Reserves for own shares 51,500 54,991– Capital contribution reserves 322,562 322,562Net profit shown in the balance sheet – Accumulated profit 4,327 20,252– Result after tax – 236,399 – 15,925Total equity 196,958 433,358 Liabilities Long-term financial liabilities 10 211,000 150,000Long-term provisions 7,698 7,698Payables to Group companies 39,266 5,939Payables to third parties 142 332Short-term provisions 501 508Deferred income and accruals 2,529 1,986Total liabilities 261,136 166,463Total equity and liabilities 458,094 599,821


Notes to the statutory financial statements 2014 of Von Roll Holding AG

1. Operating income

The operating income in 2014 consists solely of Group-internal invoicing.

2. Operating expense

The operating expenses in 2014 consist mainly of Group-internal invoicing of CHF 15.3 million (2013: CHF 9.2 million).

3. Exceptional expense

Due to changes in accounting regulations, it will no longer be possible to value the Group’s assets and liabilities together from the financial year 2015 onwards. Assets and liabilities are to be valued separately.

For this reason, Von Roll Schweiz AG’s equity investment was adjusted by CHF 162.9 million in the financial year 2014 in preparation. The restated value corresponds to the company’s share of equity in the consolidated balance sheet. By restating this value, Von Roll Holding AG’s reported equity has largely been adjusted in line with Group equity. A merger between the holding company and Von Roll Schweiz AG is also being considered. If the book values are retained, no loss will be incurred on the merger after this restatement.

The exceptional expense also includes the loss from the disposal of the stake in Von Roll Transformers Ltd., Israel, in the amount of CHF 25.6 million.

The previous year’s expense was a valuation allowance totalling CHF 4.7 million for receivables from the Group company Von Roll Solar AG that were all subject to a subordination clause.

4. List of subsidiaries

Name and registered officePercentage of shareholding Country

Share capital

currency

Share capital amount

( in 1,000)Principal

activity

Von Roll Management AG, Au / Wädenswil 100.00 % CH CHF 1,500 ManagementVon Roll Water Holding AG, Breitenbach 97.50 % CH CHF 100 HoldingVon Roll Finance AG, Breitenbach 100.00 % CH CHF 1,000 FinanceVon Roll Insulation & Composites Holding AG, Breitenbach 100.00 % CH CHF 1,000 HoldingVon Roll Solar AG, Au / Wädenswil 95.00 % CH CHF 180 Prod. and salesVon Roll Deutschland Holding GmbH, Augsburg 20.00 % DE EUR 125 HoldingVon Roll Schweiz AG, Breitenbach 99.99 % CH CHF 16,000 Prod. and salesOOO Von Roll, Moscow 20.00 % RU RUB 10 SalesPearl Insulations Pvt. Ltd, Bangalore 36.75 % IN INR 23,126 Prod. and sales


5. Treasury shares

As of the reporting date, Von Roll Holding AG held 7,067,629 treasury shares (2013 : 7,062,660) which were valued at the market value as at 31 December 2014 of CHF 1.36 (2013 : CHF 1.39). During the reporting period, a loss was incurred on the valuation of treasury shares in the amount of 0.2 million (2013 : CHF 4.5 million) which is included in other financial expense. In the financial year 2014, Von Roll Holding AG acquired 597,939 (2013 : 605,123) treasury shares at an average price of CHF 1.63 (2013 : CHF 1.69). The highest price for the purchased shares was CHF 1.93 (2013 : CHF 2.16), while the lowest price at which treasury shares were acquired was CHF 1.31 (2013 : CHF 1.35). In 2014, 592,970 (2013 : 602,927) treasury shares were sold at an average price of CHF 1.64 (2013 : CHF 1.69). This figure includes sales at a high of CHF 1.96 (2013 : CHF 2.19) and a low of CHF 1.33 (2013 : CHF 1.36).

6. Equity

The share capital as of 31 December 2014 consists of 184,778,889 bearer shares. The par value per share is CHF 0.10.

The Annual General Meeting on 9 April 2014 approved the creation of conditional capital. The Board of Directors is thus entitled to increase the company’s share capital by up to CHF 3,000,000 by issuing a maximum of 30,000,000 fully paid-up bearer shares each with a par value of CHF 0.10 to be subscribed for by exercising conversion rights granted in connection with debentures or similar bonds of Von Roll Holding AG or Group companies. Shareholders’ subscription rights were excluded.

7. Major shareholders (pursuant to Article 663c of the Swiss Code of Obligations)

According to the latest available information, the major shareholders are:

2014 2013

Number of issued shares 184,778,889 184,778,889Nominal value in CHF 0.10 0.10Share capital in CHF 18,477,889 18,477,889

Shareholders 2014 2013

August von Finck, Munich (Germany) Francine von Finck, Munich (Germany) August François von Finck, Zurich (Switzerland) Maximilian von Finck, Freienbach (Switzerland) Maria Theresia von Finck, Munich (Germany) Von Roll Holding AG, Breitenbach (Switzerland) 67.41 % 67.41 %The above-mentioned figure includes: Von Roll Holding AG, Breitenbach (Switzerland) 3.82 % 3.82 %


8. Contingent liabilities to third parties

As of 31 December 2014, total guarantees amounted to CHF 13.0 million (2013 : CHF 13.8 million). The fall year-on-year is due in particular to guarantees for transformers projects, while the guarantees in the water business increased slightly. Von Roll Holding AG has issued letters of comfort to various subsidiaries for existing bank loans. None of these loans was drawn down as at the balance sheet date 2014.

9. Disclosures relating to the Board of Directors and management

Board of Directors and management remuneration are shown in the Remuneration Report.

On 31 December, members of the Board of Directors, members of the management team and parties related to them held the following shares:

Members of the Board of Directors, members of the management team and parties related to them held 8,170 convertible bonds of Von Roll Holding AG on 31 December 2014.

10. Financial liabilities

As of 18 June 2014, Von Roll Holding AG issued unsecured convertible bonds (stock symbol : ROL14 ; Swiss security number : 24523928; ISIN: CH0245239287) of CHF 61 million due in 2020. They are convertible into 25,416,870 bearer shares (subject to any adjustments due to the dilution protection clause) of Von Roll. The shares to be delivered upon conversion of the bonds will be shares made available from the conditional new share capital.

The conversion price is set at CHF 2.40. The offering and redemption price are set at 100 % each. The convertible bonds will carry a coupon of 1.250 % per annum, payable annually in arrears. Existing shareholders have been granted advance subscription rights to subscribe for the convertible bonds in proportion to their current shareholding. Through the conversion of the convertible bonds, one new share is created for seven existing shares. Accordingly, based on an issue total of CHF 61 million, each shareholder has the right to purchase a bond of CHF 1,000 nominal amount for every 2,913 shares held on 2 June 2014 prior to the start of trading.

On 24 October 2012, Von Roll Holding AG raised long-term external funds in the form of a domestic bond denominated in Swiss francs ( ISIN: CH0196238601) in the amount of CHF 150 million. The bond has an annual coupon of 4 % and a term of four years (final maturity on 24 October 2016).

in CHF 1,000 2014 2013

Guarantees 12,998 13,847

Number 2014 2013

Peter Kalantzis Chairman of the Board of Directors 1,333 1,333Guido Egli Vice-Chairman of the Board of Directors 1,067 1,067Gerd Amtstätter Member of the Board of Directors 466,667 466,667August François von Finck Member of the Board of Directors 23,800,000 23,800,000Total 24,269,067 24,269,067


11. Risk assessment

The Board of Directors and Executive Management attach a great deal of importance to dealing carefully with risk and extended their risk management systems in the reporting year. In addition to ensuring that compre-hensive and effective insurance cover is in place, risk management involves the systematic identification, assessment and reporting of strategic, operational and financial risk. Strategic risk is primarily assessed by the Board of Directors, while financial and operational risk is the responsibility of Executive Management. The Risk Officer reports to Executive Management on risk management every six months. The Board of Directors is immediately advised of risks entailing a gross exposure in excess of CHF 25 million.

Risk management is not only limited to the Group’s finances but includes all business segments and companies. Suitable management tools were assigned to identified risks. According to their importance, risks were allocated to the key processes procurement, production and sales, and in accordance with risks to support processes such as IT communications technology and Human Resources.

The risk assessment carried out is based on information obtained in interviews with key staff. Risks are categorised in accordance with the same framework as that used in the internal control system. For the top ten risks ( including those which can lead to incorrect or fraudulent reporting), a detailed analysis of the probability of their occurring and their impact was carried out, which constitutes the basis for the introduction of an appropriate risk management process.

Risk management activities are focused on hedging currency and metal price risks and in managing receivables. New risks were also identified via direct contact between departments and the risk management team.

12. Significant events after the balance sheet date

There were no significant events after the balance sheet date.


Allocation of accumulated results

After the allocation of the accumulated result, the equity reconciles as follows:

Breitenbach, 3 March 2015

Von Roll Holding AGFor the Board of Directors :

Dr. Peter KalantzisChairman of the Board of Directors

in CHF 1,000 2014 2013

Profit carried forward from previous years 4,327 20,252Loss – 236,399 – 15,925Accumulated loss (–) / profit (+) – 232,072 4,327

Distribution of dividend – –Balance to be carried forward – 232,072 4,327

in CHF 1,000 2014 2013

Share capital 18,479 18,479General legal reserves 11,123 11,123General legal reserves ( from capital contribution) 21,876 21,876General reserves 3,490 –Reserves for own shares 51,500 54,991Capital contribution reserves 322,562 322,562Accumulated loss (–) / profit (+) – 232,072 4,327Equity 196,958 433,358


Report of the Statutory Auditor

To the General Meeting ofVON ROLL HOLDING AG, BREITENBACH

Report of the Statutory Auditor on the financial statements

As statutory auditor, we have audited the accompanying financial statements of Von Roll Holding AG, which comprise the income statement, balance sheet and notes (pages 94 to 100) for the year ended 31 Decem-ber 2014.

Board of Directors’ responsibilityThe 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 misstatements, 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 responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. These standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, 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 financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe 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 December 2014 comply with Swiss law and the company’s articles of incorporation.


Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.

We recommend that the financial statements submitted to you be approved.

DELOITTE AG



104 Glossary

Financial glossary

EBITEarnings before interest and taxes.

EBIT margin Ratio of EBIT to sales.

Trading volume Number of shares traded on the stock exchange in a specific period.

Gross margin Percentage share of gross profit (sales less manu-facturing costs) to total sales.

Cash flowChange in cash and cash equivalents.

EBITDA Earnings before interest, taxes, depreciation and amortisation (on property, plant and equipment and intangible assets).

Equity ratio Percentage share of equity to total capital.

EPS (earnings per share)Consolidated net income for the year divided by the average weighted number of outstanding shares.

Cash flow from operating activities EBITDA less gains / losses on the disposal of fixed assets, changes in long-term provisions and changes in short-term assets and liabilities plus income taxes paid.

Cash flow from investing activities Cash flow for investments and loans plus interest received and revenue from the disposal of fixed assets.

Cash flow from financing activities Cash flow from equity contributions minus payments to owners plus cash flow from raising financial liabil-ities minus repayments of financial liabilities plus investing activities.

Market capitalisation Share price multiplied by the total number of shares.

Net cash position Cash and cash equivalents less interest-bearing financial liabilities.

Net sales Revenue from the sale of products and /or services after deducting reductions in earnings and taxes.

Net income Operating income less net financial result and taxes.

Glossary 105

Product glossary

Ampere Unit of electrical current, named after the French physicist André-Marie Ampère ( 1775 – 1820).

Baekeland Leo Hendrik Baekeland was a Belgian chemist who invented Bakelite, the thermosetting plastic based on phenol resin, in the early 20th century, thus laying the foundation for the production of the first composites (sheets, tubes and moulded parts) by Von Roll a few years later.

CompositeA combination of two or more materials which has different properties to its individual components. For fibre composites, glass or carbon fibres, for example, are embedded in a matrix such as resin.

Duroplasts Duroplasts, also called duromers, are plastics that can no longer be moulded after hardening. Duroplasts are hard, glass-like polymer materials that are linked in a rigid 3D structure by chemical primary valency bonds. The bonds are created when preliminary products chemically react with molecular chains through the application of heat or pressure, usually with the help of catalysts.

Electrical generatorsAn electrical generator ( from the Latin “generare”: to beget, produce) is an electrical machine that converts kinetic energy or rotational energy into electrical energy and is therefore the reverse of the principle of the electric motor, which converts electrical energy into kinetic energy.

Filament Single fibre, of any length, needed to manufacture glass fabric for laminates (e.g. Vetronit® ).

Direct current (DC)A flow of electrical current whose strength and direction do not change. It is generated in galvanic solar or fuel cells or produced from alternating current by means of a commutator, and is used in electronics, galvanisation and in the supply of energy to railway systems.

MicaThe term “mica” covers a group of sheet silicates whose properties make them especially suitable for use in high-voltage insulation materials, particularly the minerals muscovite and phlogopite belonging to the mica group. Their more noteworthy properties include high levels of electrical, heat and chemical resistance. Mica is resistant to the corona discharge invariably associated with high-voltage equipment. The English term mica is derived from the Latin “micare”, meaning to sparkle or shine.

High-voltage current High-voltage current is used for regional and nation-wide electrical power transmission. The voltage level is defined as between 60 and 150 kV, but the most common is 110 kV. In contrast, rotating high-voltage machines such as motors and generators normally use between 1 and 30 kV.

InsulationInsulation means the process of keeping two things separate or isolating them. The verb isolate derives from the French “isoler”. In electrical engineering, insulation is used to protect the live components against contact, short circuits and unwanted residual current.

Iodine A chemical element, often used as a catalyst in chemical reactions such as polymerisation.

Adhesive tapesThe adhesive tapes used in electrical insulation are special insulating tapes that have specific heat resistance and other properties. They generally con-tain no mica and are only used in low-voltage applica-tions. Most are UL-certified (e.g. UL 20780 certification for Intertape® and UL E 315208 or UL E 315249).

LaminateA laminate ( from the Latin “lamina”, or layer) is a multilayer duroplastic material made by compressing and sticking together at least two layers of the same or different materials. Joining the materials can com-plement the properties of the individual constituents.

106 Glossary

MotorA motor (from the Latin “motor”, or mover) is a device that performs mechanical work by converting thermal, chemical, electrical or other forms of energy. Motors normally rotate a shaft which drives machines, tools and means of transport.

Low-voltage currentUsed for local power supply. Defined as up to 1,000 volts ( 1 kV), but normally 230 to 400 volts.

Surface resistanceThe voltage required to cause a specific current to flow across the surface of a material. This is an impor-tant parameter for the surface leakage resistance and antistatic properties of materials used to make printed circuits (soldering and assembly frames).

PrepregShort for preimpregnated. A combination of glass fibre mat or glass fibre filament fabric, nonwoven material or roving with resin, usually cured to the B-stage, ready for moulding.

Primary energyPrimary energy is an unconverted energy form that produces electricity and heat. Examples include oil, coal, natural gas and hydroelectric power.

Quality assuranceIn today’s industrial companies, the quality of manu-factured products is guaranteed through quality assurance systems and periodically checked using ISO certification (e.g. ISO 9001).

Rotational energyRotational energy is the kinetic energy of a rigid body – such as a wind turbine – rotating on a fixed axis. This energy depends on the body’s movement of inertia and its angular velocity. Wind turbine gen-erators use rotational energy to produce electrical current in the stator coils through electromagnetic induction.

StatorA stator is the stationary part of a machine, e.g. in an electric motor, generator, hydromotor or pump. It often also serves as the housing, and in the case of electric motors and generators consists primarily of sheet steel and the stator coils.

Traction motorA traction motor is an electric motor that drives a railborne vehicle. It is usually housed in the chassis and connected to the wheel axle via a reduction gear.

Underwriters Laboratories (UL) US organisation, founded over 100 years ago, that inspects and certifies products for their usage prop-erties and safety.

VoltUnit of electromotive force named after the Italian physicist Alessandro Volta ( 1745 – 1827), the inventor of the battery.

Alternating currentA flow of electrical current whose strength and direction change periodically. Abbreviated to AC.

XenonA chemical element and noble gas used in gas discharge lamps, for example in car headlights.

YttriumA chemical element and rare-earth metal. It plays an important role in ceramic high-temperature super-conductors.

195 mm211 mm211 mm195 mm 11 mm

Our product portfolio Five-year overview

We Enable Energy – As one of Switzerland’s longest-established industrial companies, Von Roll focuses on products and systems for elec trical power generation, power transmission and industrial app-lications.

Von Roll’s business portfolio is divided into the following businesses : Von Roll Insulation offers electrical insulation products, systems and

services for generators, high- and low-voltage motors, transformers and other applications. Von Roll Composites produces composite materials and parts for a variety of industrial equipment. Von Roll Water provides solutions for process engineering tasks in the field of water and waste-water management.

MicaMica as a base material for high-voltage insulation. Von Roll’s commitment to mica is extensive and covers all stages in the manu facturing process.

WiresInsulated round, flat and Litz wires for high- and low-voltage markets and electronic applications.

CablesMica tapes for fire-resistant cables. Von Roll provides a wide range of pro-ducts that are ideally suited to all commonly used standards.

LiquidsImpregnation and potting resins as well as encapsulating and conformal coatings for high- and low-voltage app lications.

FlexiblesInsulating flexible materials for low-voltage applications such as flexible laminates and adhesive tapes.

CompositesEngineered materials made from a resin and a support structure with distinct physical, thermal and electrical pro-perties. They can be moulded, machined or semi-finished.

WaterVon Roll Water provides state-of-the-art solutions for water and waste-water treatment.

Defence & securityHigh-quality systems for security and protection based on thermoset /thermo-plastic products in single use or tailored combinations.

TestingVon Roll provides electrical, thermal and mechanical testing of individual materials as well as complete insulating systems. We are UL-certified.

TrainingThe Von Roll Insulation Training pro-vides a training program in high- and low-voltage insulation to its customers.

Key figures per share

Key figures

in CHF 1,000 20142013 5

(restated) 2012 2011 2010

Order intake (gross) 416,382 436,162 505,133 559,596 540,462Net sales 418,844 417,805 497,064 543,262 554,151Number of employees (FTE) 2,268 2,551 2,727 2,881 2,937Depreciation, amortisation and impairments – 20,583 – 13,891 – 51,502 – 18,814 – 18,090EBIT – 32,495 – 6,113 – 53,637 6,635 10,790Cash flow from operating activities 3,032 14,508 1,589 – 19,679 14,259Capital expenditures 35,480 24,958 23,413 17,969 14,161Current assets 277,142 266,042 308,299 285,046 267,404Total assets 474,350 497,072 502,841 490,439 491,635Current liabilities 88,147 91,288 76,043 148,362 121,884Non-current liabilities 261,526 204,955 198,477 48,471 47,222Equity 124,677 200,829 228,321 293,606 322,529Equity ratio (%) 26 % 40 % 45 % 60 % 66 %Number of issued shares 184,778,889 184,778,889 184,778,889 184,778,889 184,778,889EBIT per share 1 – 0.18 – 0.03 – 0.30 0.04 0.06Operating cash flow per share 2 0.02 0.08 0.01 – 0.11 0.08Equity per share (CHF) 3 0.70 1.13 1.28 1.65 1.81Dividends per share (CHF) 4 – – – – –

America 22.8 %

EMEA 1 54.7 %

Asia 22.5 %


Other 3.0 %

Composites 30.0 %

Insulation 67.0 %

Share of order intake

Other 3.5 %

Composites 29.9 %

Insulation 66.6 %


1 EBIT/weighted average number of shares outstanding2 Cash flow from operating activities /weighted average number of shares outstanding3 Consolidated equity/weighted average number of shares outstanding4 Dividend 2014: proposal by the Board of Directors5 See Note 2 of the consolidated financial statements

in 1,000 CHF 20142013 4

( restated)

Order intake 416,382 436,162Net sales 418,844 417,805EBIT – 32,495 – 6,113Net income for the period – 90,204 – 36,323Cash flow from operating activities 3,032 14,508Capital expenditures 35,480 24,958Equity 124,677 200,829Equity ratio (%) 26 % 40 %Number of employees (FTE) 2,268 2,551

1 EBIT/weighted average number of shares outstanding2 Cash flow from operating activities /weighted average number of shares outstanding3 Consolidated equity/weighted average number of shares outstanding4 See Note 2 of the consolidated financial statements

Number of employees (FTE)

20142013 2

(restated)

Von Roll Insulation 1,281 1,298Von Roll Composites 923 972Other activities 64 281Total 2,268 2,551

1 EMEA: Europe, Middle East and Africa2 See Note 2 of the consolidated financial statements

Net sales by region

in CHF 1,000 20142013 2

(restated)

EMEA1 229,047 219,210America 95,567 95,727Asia 94,230 102,868Total 418,844 417,805

Order intake by segment

in CHF 1,000 20142013 2

(restated)


Net sales by segment

in CHF 1,000 20142013 2

(restated)


EBIT by segment

in CHF 1,000 20142013 2

(restated)

Von Roll Insulation – 2,810 3,229Von Roll Composites – 17,781 – 926Other activities – 11,904 – 8,416Total – 32,495 – 6,113

in CHF 20142013 4

( restated)

EBIT 1 – 0.18 – 0.03Cash flow from operating activities 2 0.02 0.08Equity 3 0.70 1.13Number of issued shares 184,778,889 184,778,889Share price ( high) 2.03 2.20Share price ( low) 1.30 1.30Share price (end of period) 1.36 1.39Market capitalisation ( in CHF 1,000) 251,299 256,843

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195 mm211 mm211 mm195 mm 11 mm

Annual Report

We Enable Energy

Ann

ual R

epor

t W

e En

able

Ene

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Financial reportingConsolidated financial statements

Consolidated statement of comprehensive incomeConsolidated statement of financial position

Consolidated cash flow statementConsolidated statement of changes in equity

Notes to the consolidated financial statementsAuditor’s report on the consolidated financial statements

Financial statements of Von Roll Holding AGIncome statement

Balance sheetNotes to the statutory financial statements

Allocation of accumulated results Auditor’s report on the financial statements

383940

41 4292

949596

10010 1

37

Glossary 104

Corporate GovernanceGroup structure and shareholders

Capital structureBoard of Directors

Executive ManagementRemuneration, profit-sharing and loans

Participatory rights of shareholdersChange of control and defence measures

AuditorInformation policy

1 7 18

2025 2727282828

17

Von Roll Holding AG with registered office in CH-4226 Breitenbach (canton Solothurn) and a further business address in CH-8804 Au / Wädenswil, Steinacherstrasse 101, has been listed on the SIX Swiss Exchange (Symbol: ROL, security number : 324.535, ISIN : CH0003245351 ) since 11 August 1987.

Business addressVon Roll Holding AGSteinacherstrasse 1018804 Au / WädenswilSwitzerlandPhone +41 44 204 35 00Fax +41 44 204 30 10www.vonroll.com

Registered officePasswangstrasse 204226 Breitenbach SO

Stock exchange listingSIX Swiss Exchange (Symbol: ROL) Security number: 324.535 ISIN: CH0003245351

For publications and further information,please contact Claudia GuentertPhone +41 44 204 35 29Fax +41 44 204 30 [email protected]

Von Roll Holding AGSteinacherstrasse 1018804 Au / WädenswilSwitzerland

ImprintPublisher: Von Roll Holding AG, Au / WädenswilContent / text: Von Roll Holding AG, Au / WädenswilDesign / artwork:gateB AG, Empowering Marketing Performance, Steinhausen / Zug

Created and printed in Switzerland© Von Roll Holding AG, 2015

The Von Roll Annual Report is originally prepared in Germanand translated into English.In the event of any discrepancy, the printed German version prevails.

The Annual Report is available on the Internet atwww.vonroll.com

Von Roll in 2014Letter to shareholdersBusiness development

Global presenceVon Roll Insulation

Von Roll CompositesOther activities /Von Roll Water

The Von Roll share

248

10121416

2

Remuneration ReportRemuneration philosophy and basic principles

Remuneration during the financial yearAuditor’s report on remuneration

29293235

195 mm 195 mm 211 mm 11 mm 211 mm annual report · mica mica as a base material for high-voltage...

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