Annual Report 2009 - Von Roll

09Annual ReportWe Enable Energy

Net sales549 millionOrder intake475 millionOperating EBIT0,6 millionCash flow from operating activities29 millionKey figuresin 1,000 CHF 20092008(restated)Order intake 474,814 688,225Net sales 549,429 710,055Operating EBIT 577 55,348– In % of net sales 0.1 % 7.8 %EBIT – 8,491 50,070Net income – 11,342 29,755Cash flow from operating activities 29,470 44,696Capital expenditures 21,224 27,046Equity 372,695 418,690Equity ratio 72 % 69 %Number of employees (as at reporting date) 2,953 3,448Key figures per sharein 1,000 CHF 20092008(restated)Operating EBIT 1 0.00 0.30Cash flow from operating activities 2 0.17 0.24Equity 3 2.09 2.29Number of issued shares 184,778,889 184,778,889Share price (high/low) 9.04/5.80 13.00/5.80Share price (end of period) 6.40 7.66Market capitalisation (in CHF 1,000) 1,182,585 1,415,4061Operating EBIT/weighted average number of shares outstanding2Cash flow from operating activities/weighted average number of shares outstanding3Consolidated equity/weighted average number of shares outstanding

Share of total salesNet sales by regionsin CHF 1,000 2009 2008Asia 19.6 %America 27.3 %EMEA* 53.1 %EMEA * 291,892 394,333America 149,758 176,426Asia 107,779 139,296Total 549,429 710,055Share of total salesNet sales by segmentin CHF 1,000 2009 2008Transformers16.8 %Composites 18.6 %Insulation 64.7 %Von Roll Insulation 355,324 526,229Von Roll Composites 102,059 160,753Von Roll Transformers ** 92,046 23,073Total 549,429 710,055Order intake by segmentin CHF 1,000 2009 2008Transformers16.4 %Composites 20.8 %Insulation 62.8 %Von Roll Insulation 298,404 514,913Von Roll Composites 98,624 160,795Von Roll Transformers ** 77,786 12,516Total 474,814 688,225Operating EBIT by segmentin CHF 1,000 20092008(restated)Von Roll Insulation 8,807 48,385Von Roll Composites – 3,493 17,080Von Roll Transformers ** 7,091 1,137Total *** 577 55,348* EMEA: Europe, Middle East and Africa** Von Roll Transformers: included from 25 September 2008*** Including «other activities»

As one of Switzerland’s longest establishedmanufacturers, we focus on energy generation,transmission and distribution. Von Roll isa global market leader in insulationproducts, systems and services.We build long-term business relationships basedon client focus, the highest level of qualityand service and leading-edge technology.We give our clients access to our worldwidenetwork, and a wealth of materials and applicationstechnology expertise. Our leadershipin technology and innovation is thebasis for the success of our partners. This appliesto the entire value added chain, from engineeringthrough to production and application.We offer our shareholders, business partnersand employees a commitment to sustainedprofitable growth.

2 Letter to shareholdersDear ShareholdersThe main feature of 2009 was the global recession. Even Von Roll was not able to escape theeffects of the economic downturn. After a record year in 2008, we had to deal with a decline inbusiness development: At CHF 549.4 million, Group sales were 23 % below the level of the previousyear. Adjusted to take into account exchange rate and copper price and copper quantity effects,sales amounted to CHF 638 million, which corresponds to a decline of 10 %. The operating EBITtotalled CHF 0.6 million. Taking into account non-recurring restructuring costs, EBIT was reducedto CHF – 8.5 million. Net income totalled CHF – 11.3 million, compared with CHF 29.8 million in theprevious year.Stabilisation in the second half of the yearThe business segments Insulation and Composites were particularly hard hit by the economic crisis.The sharpest decrease in demand was for products which are used in the automotive industry,construction and consumer goods, which are dependent on the state of the economy. Many customersfrom these sectors cancelled orders and cut their inventories. In the long-term cyclical energysupply and transport business, on the other hand, demand remained largely stable, althoughsome major power station projects were also postponed during the credit crunch.The fall in demand had a significant effect on our order volumes, although a return to a stabilisationwas already noticeable in the second half of 2009: As a result of the decrease in inventories amongmany customers and a generally more optimistic mood, the order intake gradually recovered towardsthe end of the year.Cost savings programme takes effect, financial basis solidVon Roll also reacted in a decisive manner to the deterioration in the general economic conditions.We promptly set up a restructuring programme, in order to adjust our capacities to the alteredmarket situation. As a result of the decreasing demand, it was absolutely essential to streamline ourorganisation. We pooled duties both in production and administration, enabling us to cut just under500 jobs in the process. Von Roll takes its responsibility as a social employer very seriously andoffers those affected support wherever possible. As of the current year, the restructuring programmewill result in permanent cost savings totalling at least CHF 15 million, in comparison with aone-off expense of CHF 8.6 million.The development of sales and results in financial year 2009 remained below our expectations. Wewere pleased, however, that Von Roll was able to maintain its ability to generate cash despite theadverse environment. Cash flow from operating activities totalled CHF 29.5 million. In associationwith an equity ratio which has risen by 3 percentage points to 72 %, this clearly shows that Von Rollhas a solid financial basis.With regard to the solid capital basis the Board of Directors proposes payment of a dividend of CHF0.10 per share for financial year 2009.Market position secured, transformer business convincesIn both of the traditional business segments Insulation and Composites, Von Roll was able to holdon to its leading market position despite the difficult market environment. Our new, third companypillar, Von Roll Transformers, experienced a spurt in growth with an increase in sales of 27 % to CHF92.0 million. The growth drivers were primarily capital expenditure for the replacement of obsoleteelectricity structure, more efficient energy use, as well as new energies. And the positive trendlooks set to continue. Our capacities are working almost at capacity until the end of 2010 and thereare extensive orders in place for 2011 and 2012. In order to be able to exploit the potential of thisgrowth market even better in the future, we are planning to expand our production capacity.

Letter to shareholders 3Growth strategy continuesVon Roll’s growth strategy is based on three pillars: expansion of the existing core business, acquisitionsin related markets and operating excellence across all business segments. The fact that,despite the recession, we were able to maintain our market position in our traditional business andthat the new Transformers segment became Von Roll’s growth engine, is proof that our strategyyields results – even in difficult economic times.In order to increase the value of the Von Roll Group in favour of our shareholders, we concentrateon markets in which we can achieve above-average growth and therefore higher profits. We wish toexpand our position in these markets by means of targeted acquisitions. Our express aim is not tomake a risky major acquisition, but instead smaller acquisitions in line with our strategy.Our solar project, which is currently in the testing phase, offers additional growth potential. On thebasis of this strategy, Von Roll will gradually develop into an international technology group with abroadly-based business portfolio in energy-related sectors.Well-prepared for the upturnAgainst the backdrop of stabilising conditions, Von Roll is expecting to see business improve duringthe current year compared to 2009. The measures implemented in the reporting year in orderto increase efficiency mean that Von Roll will emerge from the crisis stronger and will be able tobenefit from the coming upturn.The fundamental factors of our business are intact: The global megatrends of population growth,urbanisation, industrialisation in emerging markets, as well as increasing prosperity in developedcountries are increasing the demand for energy. This in turn requires investment in order to maintainand expand the energy infrastructure – whether that is with the aid of traditional energy generationin power stations or using new technologies in the areas of wind and solar energy. Ourbusiness also benefits from stricter environmental laws and demands for efficiency improvementsin the energy market. All of the segments in the Von Roll portfolio will benefit from this. Von Rolloffers the right products and services for these markets.In 2009, many demands were placed on Von Roll’s employees. On behalf of the Board of Directorsand the Executive Management, I would like to thank them for their high level of commitment anddedication. I would also like to thank our customers for the confidence they have placed in us, aswell as you as shareholders for your loyalty. In challenging times such as these, these factors cannotbe taken for granted.Au/Wädenswil, March 2010Thomas LimbergerChairman of the Board of Directors & CEO

4 StrategyRefocussing of the strategyVon Roll aims to create value for its shareholders by means of increasing sales and profitability inthe long term, as well as a constant improvement in the operating cash flow. The basis for this isgrowth at segment and Group level above the average for the market, as well as ongoing improvementof operating efficiency.RecessionFit for the future2008PREVIOUSSTRATEGYPortfolio management,Operational excellence,CorporatecultureStrategy implementation: Portfolioexpansion, implementation ofOperational Excellence Programmeand change in the corporate culture.STREAMLININGRestructuringOperationalExcellenceDIFFEREN-TIATIONCompetitivestrengths2009Restructuring and developmentof a strong company for 2010and beyond.ADAPTEDSTRATEGYPortfolio optimisationPortfolio expansionOperationalexcellencefrom 2010Strategy implementationfor a high level of long-term,profitable growthStreamlining and differentiation as the basis of strategic growthStrategy to date has yielded resultsWhen they came to office in 2007, the Board of Directors and Executive Management formulated agrowth strategy for Von Roll, which was based on the three elements of portfolio management,operational excellence and corporate culture. This strategy delivered results. In financial year 2008,Von Roll achieved a positive result. The operational excellence programme implemented throughoutthe company strengthened innovation and customer focus, thus making the company morecompetitive overall. In addition, there were the successful acquisitions of the companies Dolph andShenzhen Mica in order to complete the insulation business and the takeover of the transformermanufacturer Enerco, which now forms the successful Von Roll Transformers segment.Fit for the future through streamlining and differentiationIn 2009, the in its extent unforeseeable economic crisis, certainly resulted in a shift in priorities.Against the background of recession, maintaining the financial flexibility of the Von Roll Group, i.e.strengthening the balance sheet and securing a continued high level of cash generation, becamea central issue. Von Roll, however, also used the period of recession to ensure that it was in a fitstate for the future. A far-reaching restructuring programme was set up and the existing operationalexcellence programme was once again intensified. Von Roll also invested in its competitivestrengths with a view to positioning itself in the best possible way for the coming upturn. These twoelements – simplification through restructuring and operational excellence, as well as differentiationby means of sharpening competitive strengths – defined the strategic positioning of the VonRoll Group during the recession.StreamliningVon Roll intends to use its restructuring programme to achieve sustained cost savings from 2010onwards of CHF 15 million. In addition to merging individual production areas and discontinuingproduct lines with weak income, Von Roll also streamlined Group-wide functions to reduce salesand general administrative costs (SG&A costs). This involved cutting almost 500 jobs throughoutthe Group in financial year 2009. In financial year 2009, the restructuring programme made a significantcontribution to Von Roll being able to secure its competitive position on the cost side, irrespectiveof the difficult conditions resulting from the global finance and economic crisis.

Strategy 5DifferentiationThe competitive strengths are the central features which Von Roll uses to differentiate itself fromits competitors. This differentiation is decisive for the positioning of the company and its productson the market. With regard to future growth, Von Roll also continued to develop its strategicstrengths during 2009, a year of recession:» Growth platform: Von Roll is developing positions in markets where higher growth, and thereforehigher profits, can be generated. Von Roll acts in a disciplined manner with regard to acquisitions.Through rapid and prudent integration, it helps the companies which it acquires to recorda spurt in growth.» Excellent market position and core competencies: Von Roll focuses on niche markets in which itis able to achieve a leading position. This increases visibility on the market, customer retentionand earnings potential. The core competencies of Von Roll in the energy area and in technologicalmaterials create entrance barriers for potential competitors.» Technological leadership: Von Roll is at the peak of technological development in all businesssegments. Innovation guarantees an advantage over the competition, not only for Von Roll butalso for its customers. In this way, Von Roll creates added value.» Broad positioning and comprehensive service: Unique products form the basis of Von Roll’sservice offering. The service business accelerates growth, promotes long-term customer relationshipsand provides a competitive advantage.» Global sales: Von Roll is in close proximity to its customers around the world. The Group has aglobal sales structure and is able to provide its customers around the world with quick and competentsupport locally.Adapted strategy for future growthBased on the restructuring programme and the competitive strengths, Von Roll is well-positionedand well-equipped for the future. Von Roll has further developed its strategy with a view to achievinga high level of sustained and profitable growth. The refocussed strategy consists of three elements:» Portfolio optimisation: Rounding off the existing core business by means of targeted acquisitionsof companies with good growth potential.» Portfolio expansion: Selective acquisitions in promising growth markets relating to the core business.» Operational excellence: Strengthening of the operating business by means of targeted processoptimisation in order to create additional efficiency and margin potential.Continuous monitoring and organisationAim: PERFORMANCEPORTFOLIOOPTIMISATIONPORTFOLIOEXPANSIONOPERATIONALEXCELLENCE2010Corporate culture as a foundationThe business operating system secures the future performance of the Von Roll Group.

6 StrategyPortfolio optimisation and expansion as a growth driverA business portfolio geared towards attractive future markets is the crucial precondition for increasingthe value of the Von Roll Group for the benefit of shareholders. Von Roll focuses on marketswith above-average growth and profit potential. In these markets, Von Roll is extending itsposition by means of targeted acquisitions. This process primarily involves portfolio optimisations,i.e. the strengthening of the existing business segments Von Roll Insulation, Von Roll Compositesand Von Roll Transformers by means of targeted acquisitions.In addition, growth is generated by means of targeted acquisitions of companies in related growthmarkets and of providers of key technologies. The focus is on those sectors, which play an increasinglyimportant role in the wake of climate change, rising energy costs and limited resources.These include, for example, the supply of scarce resources such as energy and water as well ashigh-tech components to support various industries. When selecting industries, we focus on thosein which Von Roll can effectively deploy its strengths such as the management of complex valueadded chains.Operational excellence programme 2010Von Roll’s aim with operational excellence is to reinforce customer-focus, innovation and competitiveness,to open up new markets and to improve efficiency and margins. For 2010, the focus is onthe following starting points:» Increase in sales: Strengthening of customer focus, expansion of key account management andfocus on growth markets such as wind energy, solar energy and ballistic protection.» Quality and processes: Increasing productivity and the quality standards, as well as global exchangeof expertise and best practice.» Streamlined, flexible organisation: Optimisation of the network of production locations and continualadjustment of production to the demand structure, measures to expand the gross and EBITmargin.» Working capital: Improvement of working capital management, in particular of receivables management.Corporate culture as a foundationClearly defined company values form the basis for the actions of the employees of the Von RollGroup. The central corporate value is integrity, by which we mean maintaining respectful relationswith each other as well as clients, suppliers and business partners. Our employees are required toobserve the legal and ethical conditions and demonstrate loyalty to the company at all times. VonRoll’s system of values also includes a focus on customers and innovation, strong leadership andteam work.The corporate culture based on these values ensures that employees focus both on the interestsof the customer, as well as on the company’s results. This has proved extraordinarily important duringthe recession. At the same time, the corporate culture ensures a professional and motivatingwork environment, which in turn is a requirement for retaining the best talent for the company. VonRoll has implemented various measures to anchor and constantly foster the common value systemthroughout the company.

Strategy 7Continuous monitoring and organisationIn order to control the strategy implementation, Von Roll relies on its business operating system.This determines key figures and target values on the basis of which the success of the company ismeasured. This involves the following dimensions and the corresponding key figures:» G rowth: Net sales (excluding the effects of currency rates, copper prices and copper quantities);» Margin: Operating income margin;» Cash: Cash flow from operating activities (CFOA);» Capital: Return on invested capital (ROIC).With the help of our business operating system, Von Roll is continuously improving the efficiency ofprocesses in the company, aligning its global distribution network even more closely with clientrequirements, and optimising investment in its global production capacity.

8 Executive ManagementThe Executive ManagementThomas LimbergerChairman of the Board of Directors and Chief Executive Officer (CEO),German national, degree from the Institut Supérieur de Gestion,Paris; MBA in Finance and Strategic Management, University ofNew York, USA1995–2001: Fresenius AG and Fresenius Medical Care AG,Bad Homburg, Germany: various management functions2001–2005: General Electric Deutschland, Austria and Switzerland,Munich, Germany: CEO and National Executive2005–2007: OC Oerlikon AG, Pfäffikon SZ, Switzerland: CEO andVice Chairman of the Board of DirectorsMarkus ScherbelChief Financial Officer (CFO), German national, businesseconomics degree from the European Business School (ebs),Oestrich-Winkel, Germany1997–2000: Head auditor at the accounting and tax consultancyservices firm Arthur Andersen, Stuttgart, Germany2000–2004: Head of International Financial Accounting at the listedcompany mg technologies ag, Frankfurt, Germany(formerly Metallgesellschaft AG)2004–2006: Member of the Executive Management and Chief FinancialController Europe of automotive supplier Hilite Group Europe,Marktheidenfeld, Germany2006–2007: Senior Vice President and Head ofCorporate Accounting and Reporting, OC Oerlikon Management AG,Pfäffikon SZ, SwitzerlandAndreas HartingMember of the Executive Management, responsible for marketingstrategy and IT, German national, business economics degree,a Diplôme de Grande École and a Masters from the ESCP-EAPEuropean School of Management (Paris, Oxford, Berlin)1996–1997: Consultant, The Boston Consulting Group GmbH,Munich, Germany1997–1999: Product Manager for Johnson & Johnson GmbH,Düsseldorf, Germany2000–2002: Member of the Executive Board of United ScreensMedia AG, Unterföhring, Germany2002–2005: Manager, BBDO Consulting GmbH, Munich, Germany2005–2007: Senior Vice President (Global Marketing),OC Oerlikon Management AG, Pfäffikon SZ, Switzerland

Business development 9Business developmentIn 2009 the global economy was characterised by a severe recession. What began in 2008 as acrisis in the financial sector, developed over the past year into a slump in the real economy. Withthe exception of the Asian economies, which continued to generate slight growth, there was a deteriorationin the macroeconomic framework conditions in all key regions. Von Roll has also felt theeffects of this. Business development in 2009 reflects the effects of the global recession, whichhad a particular influence on those customer segments dependent on economic trends, such asthe automotive industry, oil and gas industries, construction and consumer goods. Although theenergy supply and transport business were significantly more stable, the general shortage of creditalso resulted in a fall in investment.Von Roll responded promptly to the deterioration in the economic conditions. A restructuring programmethroughout the Group, which also included a significant reduction in staff, brought the coststructures into line with the decline in demand. The reduction in manufacturing and administrationcosts will generate long-term savings for Von Roll of at least CHF 15 million from 2010 onwards. Onthe other hand, this incurred non-recurring costs of CHF 8.6 million, which has had a negative effecton the result in the reporting year.Von Roll Group: Declining sales and order intakeBased on the high level of the previous year, Group sales fell in financial year 2009 by 23 % to CHF549.4 million (2008: CHF 710.1 million). When adjusted to take into account currency, copper priceand copper quantity effects, sales amounted to CHF 638 million, which corresponds to a decline of10 %. The fall in the global market price of copper of an average of 25 % alone led to a reduction insales of CHF 64 million. The decline in sales as a result of recession had a particular effect on thebusiness segments Von Roll Insulation and Von Roll Composites. In contrast, the new, third businesssegment, Von Roll Transformers, continued its growth trend in 2009. Despite the difficultmarket environment, Von Roll was able to maintain its leading market position in all business segments.The economic slowdown affected all geographic regions. The lowest reduction in sales was in theAmericas region (North and South America), at –15 % to CHF 149.8 million (2008: CHF 176.4 million).On the other hand, Group sales fell in the most important region of Europe, the Middle East andAfrica (EMEA region) by 26 % to CHF 291.9 million (2008: CHF 394.3 million). In the Asian region, VonRoll generated sales of CHF 107.8 million, a decrease of 23 % in comparison with the previous year(2008: CHF 139.3 million).Against the background of the general uncertainty on the markets, many customers cancelled ordersand cut inventories. During 2009, this led to a 31 % reduction in order intake to CHF 474.8 million(2008: CHF 688.2 million). During the second half of the year, however, a stabilisation was discernible.As a result of the cut in inventories completed by many customers, orders increased againand the book-to-bill ratio i.e. the ratio of order intake to sales, improved from the third to the fourthquarter by 0.2 to a factor of 0.9. Orders on hand at the end of year totalled CHF 159.7 million.Restructuring influences the resultThe gross profit of the Von Roll Group decreased in financial year 2009 in comparison with theprevious year by 34 % to CHF 107.9 million (2008: CHF 164.7 million). The reason for this is primarilythe lower sales volume coupled with the lower utilisation of capacity in the areas of low-voltage andcomposites business, which are particularly sensitive to the state of the economy. Von Roll has investedin the future even in the difficult environment; in particular, it once again increased spendingon research and development slightly in comparison with the previous year. The increase in administrativecosts is due to the one-off expenses in connection with the integration of the transformermanufacturer Enerco and the creation of the Von Roll transformer segment.

10 Business developmentFor financial year 2009, Von Roll reports operating EBIT of CHF 0.6 million, in comparison withCHF 55.4 million in the previous year. Taking into account non-recurring restructuring costs, a lossin EBIT of CHF – 8.6 million had to be recorded in the reporting period. Net income after taxes totalsCHF – 11.3 million in comparison with CHF 29.9 million in the previous year.Reconciliation of EBIT to operating EBITin CHF 1,000 20092008(restated)EBIT – 8,491 50,070Reversal of impairment – – 2,599Court case 532 1,666Costs for due diligence – 6,002Non-recurring restructuring expense 8,621 –Gain (–) / loss (+) from sale of fixed assets – 85 209Operating income 577 55,348Stable financial positionCash flow from operating activities totalled CHF 29.5 million, in comparison with 44.7 million in theprevious year. At CHF 21.2 million, investments in property, plant and equipment was below thelevel for the previous year (2008: CHF 27.0 million).As of 31 December 2009, the consolidated equity of the Von Roll Group totalled CHF 372.7 million.The equity ratio improved by 3 percentage points to 72 % (2008: 69 %). The high equity ratio and thecash flow from operating activities underline the financial stability of the Von Roll Group.Taking into account the solid capital basis, the Board of Directors of Von Roll Holding AG proposesto the Annual General Meeting, that a dividend of 0.10 francs per share be paid out for financial year2009.Von Roll: key figuresin CHF 1,000 20092008(restated)Net sales 549,429 710,055Gross margin 107,939 164,663– In % 19.6 23.2Operating EBIT 577 55,348Number of employeesVon Roll 2,953 3,448

Business development 11Von Roll Insulation:Varying development for high and low voltageThe business segment Von Roll Insulation reports sales for 2009 of CHF 355.3 million, a reductionof 33 % in comparison with the previous year (2008: CHF 526.2 million). Despite the fall in volume,the insulation business remains the main contributor to Group sales, with a share of 65 %. Orderintake decreased by 42 % to CHF 298.4 million (2008: CHF 514.9 million).During the first half of 2009, Von Roll recorded significantly lower demand from the economicallysensitive automotive and consumer goods industry. After many customers from these sectors hadestablished high inventories in the record year 2008, orders almost came to a standstill in 2009:Costs were reduced and both working capital and inventories were cut, which resulted first andforemost in a decline in sales for low-voltage products such as flexible materials and paint. Thereduced demand at Von Roll Insulation, however, remained below the values of the customer sectorswhere there were sometimes slumps in the market in excess of 50 %. In the second half of2009, many customers cut inventories, which, in combination with the more optimistic economicoutlook, led to a stabilisation in the low-voltage business. In particular, orders from the electronicsindustry in Asia began to pick up slowly.In the long cyclical business with high-voltage generators and traction engines, the demand remainedgenerally stable well into 2009. However, against the backdrop of the economic crisis,significant price pressure on major customers in the energy sector was noticeable, which had avery negative effect on sales. In addition, during the credit crunch as of the middle of 2009, investmentin major power station and wind farm projects were postponed. The fact that it was moredifficult for customers to obtain project financing resulted in a reduction in the order intake. On theother hand, the repairs business, in which Von Roll is particularly well positioned in Great Britainand Italy, benefited from the decreasing willingness to invest.The lower sales volume, as well as the trend towards more cost-effective alternatives within theproduct mix, had a negative effect on profitability. Accordingly, operating EBIT in the reporting periodfell to CHF 8.8 million, in comparison with CHF 48.4 million in the previous year.Von Roll Insulation: key figuresin CHF 1,000 20092008(restated)Net sales 355,324 526,229Gross margin 71,650 117,687– In % 20.2 22.4Operating EBIT 8,807 48,385Number of employeesIn the Von Roll Insulation segment 1,365 1,527

12 Business developmentVon Roll Composites:Decrease in economy-dependent businessAt CHF 102.1 million, the sales of Von Roll Composites in financial year 2009 were 37 % below thelevel of the previous year (2008: CHF 160.8 million). Von Roll Composites therefore accounted for a19 % share of sales. Order intake decreased by 39 % to CHF 98.6 million (2008: CHF 160.8 million).In 2009, Von Roll Composites was subject to production cuts in key customer segments. The proceedsfrom products used in the construction and consumer goods sectors (both of which arestrongly dependent on the economy) such as heat and fire-resistant cable insulation and mouldedparts, recorded the sharpest falls. The higher-margin business in systems for ballistic protection,however, remained stable in 2009. Demand in this segment benefited from a continuing high requirementfor security, both in the area of personal protection and also from police and civil protectionservices.The lower capacity utilisation as a consequence of the decline in sales in financial year 2009 reducedoperating EBIT to CHF – 3.5 million, in comparison with CHF 17.1 million in the previous year.Von Roll Composites: key figuresin CHF 1,000 2009 2008Net sales 102,059 160,753Gross margin 19,814 44,288– In % 19.4 27.6Operating EBIT – 3,493 17,080Number of employeesIn the Von Roll Composites segment 1,288 1,628

Business development 13Von Roll Transformers:Growth trend continuedIn financial year 2009, Von Roll Transformers generated sales of CHF 92.0 million, which correspondsto an increase of 27 % in comparison with the previous year. The transformer business hastherefore already contributed 16 % to Von Roll’s sales. Order intake increased by 15 % to CHF 77.8million.Von Roll Transformers continued the growth trend across all markets, with the North Americanmarket in particular developing in a very dynamic way. The growth drivers were investments in thereplacement of outdated electricity infrastructures, in more efficient electricity consumption, aswell as in new energies and more climate-friendly transmission networks.The capacities of Von Roll Transformers are almost fully utilised up to the end of 2010, while thereare more extensive orders in place for 2011 and 2012. In addition, there are strategic alliances withsome major electricity providers, which will utilise Von Roll’s capacities for several years. In orderto be able to fully exploit the potential of this growth market, Von Roll increased its production capacitiesconsiderably in financial year 2009. From 2010, there will be twice as much productioncapacity available for the manufacture of large transformers.Thanks to measures designed to improve efficiency, the improvement in operating EBIT wassignificantly greater than that in sales, increasing to CHF 7.1 million (2008: CHF 1.1 million). In thisway, Von Roll Transformers was able to improve the operating EBIT to 7.7 %, in comparison with 4.9 %in the previous year.Von Roll Transformers: key figuresin CHF 1,000 2009 2008Net sales 92,046 23,073Gross margin 16,475 2,687– In % 17.9 11.6Operating EBIT 7,091 1,137Number of employeesIn the Von Roll Transformers segment 246 235* Von Roll Transformers: included since 25 September 2008 (pro-forma Sales: CHF 72.3 million).

SEGMENTSAPPLICATIONGeneratorsRotation motorsINSULATIONTraction motorsHighvoltageLowvoltageTransformersIndustrial machinesConsumer goodsAutomotiveEquipmentCompositesPaperCOMPOSITESProtectionCableMouldedpartsTRANS-FORMERSTransformers

CORE COMPETENCIESPRODUCTSSERVICESElectricity generationAdhesive tapesLiquidsMica productsFlexible materialsWoven productsWiresClient-specific solutionsMaterials andsystem testingMaintenance and repairHigh-tech toolsPlatesTubesProfilesClient-specific solutionsMaterials andsystem testingMaintenance and repairFire-resistant cablesComponents made fromglass fibre and resin(Duroplast)Power generationand transmissionHigh-voltage powertransformersSmall and medium-sizedtransformersDistribution transformersMobile substationsSpecialist transformersClient-specific solutionsDevelopment andconstructionInstallation, maintenanceand repairProduct testing

MARKETSPower stations (gas, coal, water, nuclear power)Oil and gas industry, chemicals, heavy industry, wind farmsTransport industry (railways, trams, urban light rail, buses, etc.)IndustryOil and gas industry, chemicals, shipbuilding, wind farmsAppliances for heating, ventilation and air-conditioning, drill machines, pumps, hairdryersMotor and engine components (lighting dynamos, starters),electrical applications (seat adjusters, window openers)Equipment (machinery, hydraulics, electricity, water), transport (OEMs, suppliers to the automotive,rail, aviation and shipbuilding industries), electronics (insulation)Paper industry, textile industryBallistic protection (defence, police, civil defence),thermal protection (household appliances, foundries)Cables for buildings and shipsVarious industriesPower generation, power transmission

Description of segments 15Description of segmentsCORE COMPETENCIESPRODUCTSSERVICESVon Roll offers solutions related to energy generation, transmission and distribution, as well ashigh-tech materials. The Group is an acknowledged global market leader of insulation products,Electricity systems generation and services with the widest product range on the Adhesive market. Von tapes Roll products can be found, Materials andamong other things, in the areas of electricity generation, Liquids transport, but also in security products system testingwith ballistic protection.Mica productsMaintenance and repairFlexible materialsWoven productsThe Von Roll Group’s portfolio includes three business segments:WiresClient-specific solutions» Von Roll Insulation offers insulation products, systems and services, which are used in particularfor large generators, high voltage motors, traction motors and transformers.» Von Roll Composites manufactures heat and fire-resistant cable insulation, composites, mouldedparts and ballistic protection solutions.» Von Roll Transformers offers complete energy transmission and distribution solutions, in particularfor high-performance transformers.Within the three business segments, Von Roll covers the entire value added chain from the procurementof materials and product development and manufacturing through to installation, maintenanceand repair, and also offers consultancy services. As a result, Von Roll is in a position to offercustomers complete solutions from a single source and to offer the latest state-of-the-art technology.Von Roll’s core fields of competence are the design and manufacture of insulation products, expertisein the fields of electricity generation and transmission, as well as the manufacture of techno-High-tech toolsPlatesMaterials andTubessystem testinglogical materials.P r o fi l e sMaintenance and repairClient-specific solutionsFounded in 1803, Von Roll is one of Switzerland’s oldest established manufacturers. The Group currentlyemploys 2,953 members of staff at over 30 locations in 19 countries.Fire-resistant cablesComponents made fromglass fibre and resin(Duroplast)Power generationand transmissionHigh-voltage powertransformersSmall and medium-sizedtransformersDistribution transformersMobile substationsSpecialist transformersClient-specific solutionsDevelopment andconstructionInstallation, maintenanceand repairProduct testing

16 Description of segmentsVon Roll InsulationActivitiesVon Roll Insulation manufactures high and low-voltage electrical insulation products. Areas of applicationin the high-voltage area over 1,000 volts are generators in power stations, traction motorsfor the transport sector (trains, buses) and rotation motors in industry. The products for the lowvoltagearea are found in motors for the consumer goods industry – for example for drilling machines,in the machine and automotive industry, as well as the chemical, oil and gas industry. VonRoll Insulation has the widest range of products in the industry. This includes enamelled-wires andcoils, resins and lacquers, varnishes, mica insulating tapes, as well as rigid and flexible laminates.In addition to individual products, Von Roll provides complete insulation systems and customerspecificsolutions. The offering also includes materials and system testing for electrical machineryas well as repair and maintenance services.TechnologyThe first stage in the value added chain for mica products begins at the stage of raw materialsprocurement with the exploration of the mica mineral. This is processed to form pulp, from whichmica paper is then manufactured. The paper is laminated with a carrier material to make mica tape,which is used to provide thermal protection for motor and generator coils. In an initial step, theproduct line wires and bands forms copper blanks in drawing machines. The copper wires woundinto coils are then insulated, for example, with special varnishes or with insulation tapes. In the caseof liquid products, the process begins with chemicals such as epoxy resin and polyester, which areprocessed further to form cast resin or filling resin. The manufacture of flexible resins begins withthe raw materials polyester film and Nomex, as well as binding agents. These are stuck together inseveral layers to form a material, which is ideal for the insulation of slots.

Description of segments 17MarketIn 2009, the global market for insulation products covered a volume of around CHF 2.1 billion. By2011, growth to CHF 2.4 billion is expected. The most important growth drivers are traction motorsand rotation motors. Traction motors are benefiting from the trend towards urbanisation in China,India and Russia, which is leading to the expansion of the railway systems. In addition, climate protectionrequires the replacement of older diesel engines with modern, electrical locomotives. Therotation motors segment is growing as a result of investment in basic industries such as oil and gasextraction, as well as cement, steel and engineering in China and India. In addition, subsidies foralternative energies are promoting the spread of wind power stations. Around three quarters of theinsulation market is accounted for by Europe and Asia. While the high-voltage area includes themajor globally active power station builders among its customers, the market is more fragmentedin the low-voltage area. Von Roll Insulation is a global market leader in insulation products and isalso well-positioned in the service business.Highlights 2009Von Roll Insulation launched an innovation in the area of mica tapes with DryFlex Mica Tape. Thenew product has excellent adhesive features and flexibility, which enables a considerable increasein efficiency in production for customers. The new mica tape product family will go into mass productionin the first quarter of 2010. In the area of liquid products, Von Roll Insulation brought a newproduct family of environmentally friendly, odour and solvent-free epoxy resin (EP) on to the market.In addition, a polymer was developed under the name UPAC, which can be enriched with variouschemical components. This means that Von Roll Insulation can offer a wide range of resins withdifferent properties, which are based on the same base material. The areas of use are correspondinglybroad, from industrial motors through to generators for wind turbines. In the area of flexiblelaminates, Von Roll Insulation was able to significantly increase sales to Asia, in particular for applicationsin electricity generation and transmission, as well as for traction motors.Case study: traction motorsVon Roll’s engineering achievements are usuallyinvisible, hidden away in places like the futuristichigh-speed trains that amaze us interms of how quickly and safely they transportus to our destination. The traction motors arebuilt into the bogies of locomotives and multipleunits, with the motive power being generatedby the rotating, magnetic field of the statorcoil and transferred to the drive wheels via agearbox. The electrical insulation used in transactionmotors is exposed to very high temperaturesand wear, so the high durability ofVon Roll’s insulation materials is a key factor inthe exceptional reliability of the motors.

18 Description of segmentsVon Roll CompositesActivitiesThe Von Roll Composites segment includes products with specific mechanical, thermal and chemicalproperties, which are achieved by combining various materials. The offering includes composites,which can be used for equipping the paper industry, as well as in the areas of ballistic andthermal protection. Other applications are cables – in particular, fire-resistant cables – as well asmoulded parts. Von Roll composites are used in a range of products in a variety of sectors: fromaircraft, to car sunroofs, electronics, x-ray equipment, and civilian and military ballistic protection.Von Roll’s cable insulations are mainly used by the cable industry in ships and buildings; the fireresistantcables are mainly used, for example in airports or high-rise buildings because of thespecific safety requirements, and our moulded parts are employed in an equally wide spectrum ofindustries.TechnologyVon Roll composites are created by combining a resin with a filling structure such as glass fibre andthen being formed into sheets by means of a pressing process. Alternatively, the pre-impregnatedmaterials can be made into tubes. In the last stage of the value added chain, Von Roll machines thematerials to meet customer requirements. Fire-resistant cables are made by laminating mica paperwith a carrier material and wrapping them in a wire – making these special cables resistant to temperaturesof up to 1,200°. Mica tape can also be made into cable tape pads or winding coils to suitspecific client requirements. The starting point for the manufacture of moulded parts is to combineglass fibres and resins to form a resinous mass. The mass is then pressed into the required mouldedparts using specially created tools.

Description of segments 19MarketAccording to internal estimates, the volume of the entire market for such composite products wasaround CHF 2.5 billion in 2009 and is expected to grow to CHF 2.8 billion by 2011. In particular, theballistic protection market segment will experience above-average growth as a result of the greaterneed for security, as well as increasing expenses for military and civil security programmes.Accordingly, Von Roll Composites will further expand on its already good position as an OEM supplierin the ballistic protection segment. Like Von Roll Insulation, the Composites segment is alsobenefiting from industrialisation in China and India, as well as from the promotion of alternativeenergies, in particular wind and solar energy. In addition, composites are in general being usedincreasingly instead of metal components in order to save weight and cost. Von Roll Composites ispresent on the European market with its products, as well as in North America and Asia.Highlights 2009In 2009, Von Roll Composites progressed well in the area of fire-resistant cables: Sales to Asia wereincreased and the regional market position extended. After the responsible authority has approvedits products, Von Roll Composites will also be able to enter the Russian market, which is particularlyattractive as a result of planned new nuclear power stations as well as stricter safety regulations.A first order has already been received from a major Russian cable manufacturer. In addition,Von Roll has introduced a new generation of cost-effective, silicon-based coatings. In ballisticprotection, Von Roll has developed new material combinations for protective vests, the characteristicfeatures of which are their flexibility and low weight. Customers in the paper industry receivesignificant productivity increases thanks to new wear-resistant materials for doctor blades.Case study: carbon brakesVon Roll Composites’ products are often notvisible to the end user. The increasingly highperformance of cars, particularly at the upperend of the market, places extreme stresses onindividual engine and vehicle components. Ourproducts include exhaust manifold gaskets forhigh-performance engines and carbon brakediscs manufactured using computer-aided designfor high-end sports cars.Carbon ceramic brakes are nothing short ofrevolutionary, with ceramic brake discs achievingconsistently high friction levels regardlessof temperature and weather conditions. Thecombination of low weight and exceptionalhardness and stability accounts for the significantlyimproved dynamics in sports and luxurycars. The iron-free surfaces prevent corrosionand increase the lifetime of the brake discs.

20 Description of segmentsVon Roll TransformersActivitiesVon Roll Transformers develops and produces transformers for energy transmission and distributionranging from 20 to 850 megavolt amperes (MVA). The focus is on high-voltage power transformerswhich are used to feed electricity into regional or national networks following its generationin power stations or wind farms. In addition, the Von Roll Transformers offering also includesmedium-sized and smaller transformers, distribution transformers, mobile substations for temporaryuse (for example, in the event of disasters) and special transformers, which are developed, forexample, to meet the special requirements of the electrochemical industry.TechnologyVon Roll Transformers can offer its customers tailor-made products and services. This begins withengineering and design, where specific solutions are developed for customers in accordance withtheir requirements. Following manufacture and assembly, the transformers are also tested in accordancewith customer requests, in accordance with our own laboratories under operating conditions.In addition to transport and installation, Von Roll Transformers also offers maintenance, repair,and other services. Von Roll Transformers are characterised by the highest level of reliability– over the past 60 years there has not been a single failure of a major transformer – low noise levelsand flexibility with regard to the customer-specific requirements. Integration into the Von Roll Groupopened up synergies in the transformer business as it became increasingly possible to use ourown insulation materials.

Description of segments 21MarketThe volume in the transformer market totalled CHF 22 billion in 2009 and annual growth to the tuneof 3.5 % is expected until 2011. Over the coming years, government economic programmes associatedwith investments in energy infrastructure, will ensure growth. Longer-term growth factors include,on the one hand, climate protection which is linked to the demand for more efficient transmissionnetworks and “smart grids”, and on the other hand, the renewal of transmission grids, inparticular in North America. The transformer business requires substantial process expertise and ahigh level of investment, which means that the barriers for entering the market are high. In particular,the high-voltage power transformers segment is only slightly sensitive to price because qualityis needed. Von Roll Transformers customers include leading energy suppliers across the globe. Thelargest sales markets are Israel, the USA, Canada, Africa and Europe.Highlights 2009In 2009, Von Roll Transformers invested considerably in the expansion and modernisation of theproduction locations in Israel. The most important expansion was the installation of a third vacuumoven, thus enabling manufacturing capacities for major transformers to be doubled. In addition,Von Roll Transformers has reduced the processing time by improving internal processes and eliminatingcapacity bottlenecks. The electricity provider Hydro One Networks Inc., Canada, and IsraelElectric Corporation Ltd. have entered into strategic alliances lasting several years with Von RollTransformers. The aim is closer coordination of development as well as, in particular, privilegedaccess to production capacities. This means that the customers benefit from shorter delivery timesand lower costs.Case study: highly efficient transformersOperational stability and durability are our twomain priorities. Consequently, our transformersare manufactured to meet the highest qualityrequirements and industry standards and incorporatethe very latest technological developments.Von Roll Transformers manufacturestransformers and mobile distribution stationsthat are highly flexible in terms of design andfunctionality, in order that the most complex oftechnical requirements can be met. Other convincingadvantages are their low noise levels,reliability, efficiency and long service life.

22 Global presenceGlobal presenceMoscow, RussiaWroclaw, PolandPrague, Czech RepublicAugsburg, GermanyBradford, United KingdomDunstable, United KingdomDüren, GermanySchenectady, USANew Haven, USAMonmouth Junction, USACleveland, USAValdoie/Delle, FranceWädenswil, SwitzerlandBreitenbach, SwitzerlandMeyzieu Cedex, FranceGhisalba, ItalyRamat Ha’Sharon, IsraelDouglasville, USAMaracanau/Fortalezo, BrazilCurrais Novos, BrazilSão Paulo, BrazilHead OfficeProduction and Sales locationsSales locationsProduction, Sales,Research and Development locations

Global presence 23Tokyo, JapanLuhe, ChinaShanghai, ChinaTongcheng, ChinaAs a partner for customers active on aglobal basis in the energy sector and inother areas of industry, Von Roll also hasa global presence: The Group has locationsfor production, service and salesin 19 countries. This offers customers accessto a global network and creates theprerequisite for rapid and competentsupport on site. This also allows Von Rollto exploit the opportunities that areavailable in the global trends of climatechange, rising energy costs and limitedresources.Shenzhen, ChinaHongkong, ChinaBangalore, IndiaSingapore, Singapore

24 The Von Roll shareThe Von Roll shareThe shares are traded on the SIX Swiss Exchange and are a member of the Swiss Performance IndexSPI. They are also traded in Frankfurt and New York.On 31 December 2009, 184,778,889 bearer shares with voting rights in Von Roll Holding AG, each witha nominal value of CHF 0.10, were authorised for trading on the Swiss stock exchange in Zurich.Share performancein CHF1412Von RollSPI (normalised)108642Financial calendar18 March 2010:Balance sheet press conference,Zurich,Annual Report 200922 April 2010:Quarterly report 20100Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10Trading volumein thousand3002004 May 2010:Annual General Meeting,Zurich, Switzerland24 August 2010:Semi-annual report 201028 October 2010:Quarterly report 2010Von Roll contact:Investor RelationsLuitpold Wüsthofof Von Roll Holding AGSteinacherstrasse 101CH– 8804 Au / WädenswilPhone +41 44 204 30 50Fax +41 44 204 30 08e-mail: investor@vonroll.comwww.vonroll.com1000Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10Key figures per sharein CHF 2009 2008Share price– High 9.04 13.00– Low 5.80 5.80– End of period (value for taxation) 6.40 7.66Market capitalisation (in 1,000 CHF) 1 182 585 1 415 406Listing informationStock exchange listingSIX Swiss Exchange Symbol: ROLSecurity number 324.535ISINCH0003245351ReutersROL.SBloombergROL SW

Corporate Governance 25Corporate GovernanceVon Roll Holding AG is organised in accordance with Swiss law and meets current requirements regarding CorporateGovernance. This publication complies with all the requirements imposed by the SIX Swiss Exchange (Swissstock exchange) regarding information on Corporate Governance (Corporate Governance Directive of 29 October2008). Since 11 August 1987, Von Roll Holding AG, with its registered office in CH-4226 Breitenbach, Passwangstrasse20, and with a further business address at Steinacherstrasse 101, CH-8804 Au/Wädenswil, has been listedon the SIX Swiss Exchange (symbol: ROL, security number: 324.535, ISIN: CH0003245351). As of 31 December 2009,the market capitalisation amounted to TCHF 1,182,585 (2008: TCHF 1,415,406).1. | Group structure and shareholders1.11.1.1| Group structure| Operating Group structureVon Roll Holding AG and its subsidiaries focus their operating activities on the two segments (business units)“Insulation & Composites” and “Transformers & Solar”. Further details about the business units are available insegment reporting in Note 5 of the “Financial reporting” section 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 andthe Executive Management. The Board of Directors is responsible for the top management of the Company, its organisationalstructure, accounting, financial control and financial planning. It consists of the Board of Directors ofVon Roll Holding AG and its Chairman. The Executive Management is composed of a Chief Executive Officer (CEO),a Chief Financial Officer (CFO) and a third member who is responsible for marketing strategy and IT. The CEO isresponsible for the operational management of the Group. All Members of the Executive Management report to theCEO, are subordinate to him in their roles and support him. The Von Roll organisational structure is geared to thedemands of an integrated technology company. The aim of the reorganisation, which started in 2007, is to be yetmore focused, more transparent and ultimately more client-oriented and faster. The Executive Management with itsrelated group functions (departments) forms the top tier of management. The Executive Management is responsiblefor operating and ongoing business management. In particular, it formulates Group strategy and sets concreteobjectives. Management at segment level is responsible for operational implementation and the income statementof each of the two segments “Insulation & Composites”, as well as “Transformers & Solar”.1.1.2ManagementFor the Von Roll Group, client focus, technological and innovative leadership, as well as the highest level of qualityand service form the basis for long-standing business relationships. By successfully expanding our portfolio, particularlyin the direction of forward-looking and technologically intensive business segments, significant valueadded will be generated and consequently a sustained increase in value for shareholders. The foundation for thisis constant optimisation of processes, costs and quality. To guarantee sustained success, Von Roll falls back on itsbusiness operating system for corporate management. Corporate processes are managed on the basis of corporatevalues, which in turn form the basis of the Von Roll Group’s activities. With the business operating system, theaim of utilising our potential to the full and consequently creating long-term value for our shareholders and clientsis pursued. At the same time, the Von Roll Group strives to rank among the world’s leading companies in terms ofperformance, transparency and innovation. The central corporate value is integrity, by which we mean maintainingrespectful relations with each other as well as clients, suppliers and business partners. In so doing, our employeesobserve the legal and ethical conditions and demonstrate loyalty to the Company. Our employees agree to complywith the internal code of conduct (“Global Code of Conduct”). They are also bound by all the Von Roll Group’sguidelines and directives published on the Group’s Intranet.| Listed companiesThere are no other listed companies within the scope of consolidation of Von Roll Holding AG.

26 Corporate Governance1.1.31.21.3| Unlisted companiesA list of significant unlisted consolidated companies is disclosed in Note 23 of the “Financial reporting” section ofthis Annual Report.The basis for Bank von Roll AG (previously Von Roll Finanz AG) starting operations was provided by the banking licenceissued by the Swiss Federal Banking Commission at the end of 2008. Bank Von Roll AG’s operations arefocused on traditional asset management and investment consultancy services for private and institutional clients.Bank Von Roll AG is a joint stock company incorporated under Swiss law and based in Zurich. The company wasestablished on 19 December 2007 under the name Von Roll Finanz AG and was registered in the Commercial Registerof the Canton of Zurich on 21 December 2007. Following resolution by the Extraordinary General Meeting on19 January 2009, the company was renamed Bank Von Roll AG. The Extraordinary General Meeting of Shareholderson 19 January 2009 approved the increase in the ordinary nominal share capital of TCHF 17,900 to TCHF 18,000 byissuing 35,800 new registered shares each with a nominal value of CHF 500. Following this capital increase, shareholdersin Von Roll Holding AG were offered shares in Bank Von Roll AG in proportion to their existing holding in VonRoll Holding AG. Von Roll Holding AG waived its right to subscribe to the new registered shares; however, it hasacquired a 3 % holding in Bank Von Roll AG because of its holding of treasury shares.| Significant shareholdersIn 2009, there were no disclosure notifications relating to participations of significant shareholders or groups ofshareholders.| Cross-shareholdingsThere are no cross-shareholdings with other companies. Possible cross-shareholdings may result from thedisclosed significant shareholder structure.2. | Capital structure2.12.22.32.42.52.62.7| Ordinary share 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.| Authorised and conditional capitalAs of 31 December 2009, there was no authorised or conditional capital.| Changes in share capitalOn 12 November 2007, the capital increase resolved by the Extraordinary General Meeting on 13 August 2007 wascarried out, increasing the share capital by CHF 4,619,472.20 from CHF 13,858,416.70 to a nominal value of CHF 0.10per share, so that the share capital increased to CHF 18,477,888.90.| Shares and participation certificatesAs of 31 December 2009, 184,778,889 bearer shares with a nominal value of CHF 0.10 had been issued and werefully paid up. One bearer share carries one voting right. There were no participation certificates outstanding.| Bonus certificatesVon Roll Holding AG has not issued any bonus certificates.| Limitations on transferability and nominee registrationsThere are no limitations on transferability or nominee registrations.| Convertible bonds and optionsThere were no convertible bonds as of 31 December 2009.In 2007, a stock option plan was introduced for the Executive Management. Under this plan, the Members of theExecutive Management may be granted options free of charge each year, although there is no obligation to do so.The options may be exercised at any time for a period of three years for a price determined at the grant date, if atthe time of exercise, provided that the relevant member fufills the criteria, e.g. is still employed by the company. Amaximum of 50 % of the options granted may be exercised each year. The option plan entitles the beneficiary to

Corporate Governance 27subscribe to shares (equity settlement). The potential commitment to provide shares for options will be coveredsolely by the purchase of shares on the stock exchange.In 2007, 500,000 options to acquire 500,000 shares were granted to the Executive Management. The exerciseprice is fixed at CHF 20. The options issued under this tranche may be exercised from the grant date until 31 December2010; however, only 50 % may be exercised in 2007 and 2008 together, and also 50 % in 2009.In the reporting year, 500,000 options to acquire 500,000 shares were granted to Members of the Executive Management.The exercise price is fixed at CHF 12. The options issued under this tranche may be exercised from thegrant date until 31 December 2012; however, only 50 % may be exercised in 2009 and 2010, and 50 % in 2011.For further information, please see Note 30 in the “Financial reporting” section of this Annual Report.3. | Board of Directors3.1| Members of the Board of DirectorsThe Board of Directors of Von Roll Holding AG comprises the following members:Name Nationality Born Position Member since Term of office FunctionThomas Limberger D 1967 Chairman 2007 2010 DelegateGuido Egli CH 1951 Vice Chairman 2007 2010 Non-executiveGerd Amtstätter D 1943 Member 2007 2010 Non-executiveDr. Peter Kalantzis CH/GR 1945 Member 2007 2010 Non-executiveGerd Peskes D 1944 Member 2000 2012 Non-executiveThomas LimbergerChairman and DelegateGerman nationalDegree from the Institut Supérieurde Gestion, Paris; MBA in Financeand Strategic Management, Universityof New York, USAProfessional career1995–2001:Fresenius AG und Fresenius Medical Care AG, Bad Homburg, Germany:different management functions2001–2005:General Electric Deutschland, Austria and Switzerland, Munich,Germany: CEO and National Executive2005–2007:OC Oerlikon AG, Pfäffikon SZ, Switzerland: CEO and Vice Chairmanof the Board of DirectorsOther activitiesMember of the Board of Directors of SGS (Société Générale deSurveillance), Geneva, Switzerland; Member of the Board of Directorsof Mövenpick Hotels & Resorts, Glattbrugg, Switzerland

28 Corporate GovernanceGuido EgliVice ChairmanSwiss nationalDegree from Höhere WirtschaftsundVerwaltungsschule, Switzerland,and degree from the LondonBusiness School, UKProfessional career1977–2001:Different management positions in the food industry, e.g. asDirector Sales and Marketing with the Emmi Group, CEO andDelegate of the Board of Directors of Hero Switzerland1996:Foundation of own consulting company “ifm Food Marketing”,Lucerne, Switzerland, with various consultancy mandates in Switzerlandand abroad for renowned companiesSince 2001:Mövenpick Foods Switzerland Ltd., Cham, Switzerland,Chairman of the Board of Directors and CEOSince 2006:Mövenpick-Holding, Cham, Switzerland, CEOOther activitiesChairman of the Board of Directors of the Grand Casino Luzern Group,Lucerne, Switzerland; Member of the Board of Directors of MarchéInternational AG, Glarus, Switzerland; Member of the Board of Directorsof Gamag Management AG, Lucerne, Switzerland; Member of the Boardof Directors of Mövenpick Wein AG, Zug, Switzerland; Member of theBoard of Directors of Stutzer & Co. AG, Zurich, Switzerland; Member ofthe Board of Directors of Luzern Tourismus AG, Lucerne, SwitzerlandGerd AmtstätterMemberGerman nationalDegree in law from the Universityof Munich, GermanyProfessional career1971–1975:Member of the management team of a medium-sized company1975–1998:Government of the Free State of Bavaria, Germany, last positionas assistant secretary of state (Ministerialdirektor) in the Ministryof FinanceSince 1998:General manager of von Finck’sche HauptverwaltungOther activitiesMember of the Management Board of Nymphenburg Immobilien AG,Munich, Germany; Member of the Management Board of Amira VerwaltungsAG, Munich, Germany; Supervisory Board Chairman of CustodiaHolding AG, Munich, Germany; Supervisory Board Chairman of Staatl.Mineralbrunnen AG, Bad Brückenau, Germany; Member of the SupervisoryBoard of Sektkellerei J. Oppmann AG, Würzburg, Germany;Member of the Supervisory Board of Oppmann Immobilien AG,Würzburg, Germany; Member of the Supervisory Board of FidesSecurVersicherungsmakler GmbH, Munich, Germany

Corporate Governance 29Dr. Peter KalantzisMemberSwiss and Greek nationalDr. rer. pol., University of Basel,SwitzerlandProfessional career1971–1990:Various management functions, last position as delegate to theBoard of Directors of Lonza AG, Basel, Switzerland1991–2000:General Director and Member of the Executive Management of theAlusuisse-Lonza Group AG, Zurich, Switzerland. From 1991 to 1996head of the Chemie Lonza division and then responsible for Groupdevelopment from 1997 to 2000Other activitiesChairman of the Board of Directors of Mövenpick Holding AG, Cham,Switzerland; Chairman of the Board of Directors of Clair AG, Cham,Switzerland; Chairman of the Board of Directors of PrivatAir Holding SA,Geneva, Switzerland; Member of the Board of Directors of LamdaDevelopment AG, Athens, Greece; Member of the Board of Directors ofCNH Global NV, Amsterdam, Netherlands; Member of the Board ofDirectors of Paneuropean Oil and Industrial Holding SA, Luxembourg;Member of the Supervisory Board of Transbalkan Pipeline BV, Amsterdam,Netherlands; Member of the Board of Directors of SGS SA (SociétéGénérale de Surveillance), Geneva, Switzerland; Member of the Board ofDirectors of Hardstone Services SA, Geneva, SwitzerlandGerd PeskesMemberGerman nationalBusiness degree from FachhochschuleBochum, GermanyProfessional accountantProfessional careerSince 1978:Managing Director of Gerd Peskes GmbH Wirtschaftsprüfungsgesellschaft,Düsseldorf, GermanyOther activitiesVice Chairman of the Supervisory Board of Custodia Holding AG, Munich,Germany; Vice Chairman of the Supervisory Board of NymphenburgImmobilien AG, Munich, Germany; Member of the Supervisory Board ofRHI AG, Vienna, Austria; Vice Chairman of the Supervisory Board of ZwackUnicum RT., Budapest, Hungary; Member of the Board of Directors ofMövenpick Holding AG, Cham, Switzerland; Chairman of the SupervisoryBoard of ARAG Allgemeine Rechtsschutz-Versicherungs-AG, Düsseldorf,Germany; Member of the Supervisory Board of apetito AG, Rheine,Germany; Member of the Supervisory Board of Claas KGaA, Harsewinkel,Germany; Member of the Board of Directors of Underberg AG, Dietlikon,SwitzerlandAll non-executive Members of the Board of Directors in the financial years 2006 to 2009 belonged to neither thekey management of Von Roll Holding AG nor to one of its subsidiaries, nor did they have significant businessrelations with the latter.

30 Corporate Governance3.23.33.43.4.13.4.2| Other activities and interestsInformation on the other activities and interests of the Members of the Board of Directors is shown in section 3.1.| Elections and terms of officeThe Members of the Board of Directors are normally individually elected on a staggered basis for a term of threeyears by the Annual General Meeting. As a result of the election of a completely new Board of Directors in financialyear 2007, the staggering is currently not in place. Four Directors (T. Limberger, G. Egli, G. Amtstätter, Dr. P. Kalantzis)were appointed for the first time in 2007 for a term of office until the Annual General Meeting 2010 and one Director(G. Peskes) was appointed for the first time in 2000 and re-elected in 2009 for a term of office until the AnnualGeneral Meeting 2012. In accordance with the Rules of Procedure of Von Roll Holding AG, each Member of theBoard of Directors is obliged to resign from office at the latest by the Annual General Meeting of the calendar yearfollowing the calendar year in which that member turns 72.| Internal organisationThe organisation of the Board of Directors and its committees is detailed in the Rules of Procedure. These areavailable on Von Roll Holding AG’s website, www.vonroll.com, under Rules of Procedure in the CorporateGovernance section, under Investor Relations. The following paragraphs summarise the main elements of the Rulesof Procedure.| Division of responsibilities and working methods of the Board of DirectorsThe Board of Directors constitutes itself by annually electing a Chairman, a Vice Chairman, a delegate and themembers of the committees from its members. The individual functions are listed in section 3.1. The Board of Directorsappoints a minute-taker who does not have to be a Member of the Board of Directors. The Board of Directorsmakes 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 inmeetings for the agenda items relating to business activities. The invitation letter to the meeting shows all theagenda items that a Member of the Board of Directors, a committee or the CEO wishes to discuss. The participantsof the meeting receive detailed written documentation in advance for all motions. The Chairman convenes theBoard of Directors as often as business operations require. The Board of Directors met seven times during the reportingyear. On average the meetings lasted three hours. The dates for the ordinary meetings are set at an earlystage so that most members were usually able to attend in person.| Committees of the Board of Directors and their methods of operationThe 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 theassumption of its responsibility for the Group in the area of financial reporting, the application of accounting standardsand systems and the external audit. The activities of the Audit Committee do not release the Board of Directorsfrom its legal obligations and the decision-making power remains with the Board of Directors. The Audit Committeecomprises three Members of the Board of Directors: G. Peskes (Chairman), G. Amtstätter and Dr. P. Kalantzis. TheCFO attends the Audit Committee meetings. The Audit Committee met three times in total during the reporting year.On average the meetings lasted three hours and forty minutes.People & Remuneration CommitteeThe People & Remuneration Committee is responsible for monitoring the selection of managers as well as theirterms of employment. The members verify and propose the remuneration of the Board of Directors and the managersas well as any option and stock option plans. The People & Remuneration committee has no decision-makingpowers. The duties and competences assigned to the Board of Directors under the Rules of Procedure and by lawremain with the full Board of Directors. It may seek outside expert advice from time to time to support its recommendations.It comprises the Board Members G. Amtstätter (Chairman), G. Egli and Dr. P. Kalantzis. The CEO andChairman attends the People & Remuneration Committee’s meetings, apart from when his remuneration is beingdiscussed. During the reporting year, the People & Remuneration Committee met three times, for an average of onehour each time.

Corporate Governance 313.4.33.53.63.7| Working methods of the Board of Directors and its CommitteesThe relevant information can be found in sections 3.4.1 and 3.4.2.| Powers and responsibilitiesThe Board of Directors is responsible for the company’s overall management as well as supervising the managementof Von Roll Holding AG and the Group, in particular with regard to compliance with legislation, the Articles ofAssociation, regulations and instructions. The Board of Directors issues the necessary directives regarding businesspolicy and receives regular reports about business development, and may give orders and instructions to theCEO. The powers and responsibilities and nature of cooperation between the Board of Directors and the ExecutiveManagement are stipulated in the Rules of Procedure. These are available on Von Roll Holding AG’s website,www.vonroll.com, under Rules of Procedure in the Corporate Governance section, under Investor Relations. TheBoard of Directors has delegated responsibility for business operations to the CEO of Von Roll Holding AG. However,in accordance with its resolution, the Board of Directors continues to make important personnel decisions anddecisions regarding acquisitions and divestments exceeding CHF 1 million. Furthermore, the Board of Directorsdecides on investments in technology depending on the type of investment that exceed CHF 1 million as well asother matters that are relevant to the Group and cannot be delegated by law.| Information and instruments for monitoring the Executive ManagementThe 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 statements (first and third quarter), half-yearly and annual financial statements. The CEO andCFO also report to the meetings of the Board of Directors on business activities and all matters relevant to theGroup including significant legal cases. Site visits complete the information received. Each year, based on the proposalsof the CEO and CFO, the Board of Directors discusses and approves the next year’s budget, which it thenregularly reviews. Once a year, the Board of Directors reviews the strategic direction of the Group.| Risk management in the GroupThe Board of Directors and Executive Management attach a great deal of importance to the careful handling of risksand expanded their risk management during the reporting year. In addition to ensuring that comprehensive andeffective insurance cover is in place, risk management involves the systematic identification, assessment and reportingof strategic, operational and financial risk. Strategic risks are primarily assessed by the Board of Directors,while financial and operational risks are assessed by the Executive Management. The Risk Manager reports on riskmanagement to the Executive Management every six months. The Board of Directors is informed immediately ofrisks involving gross exposure of over CHF 25 million. Risk management is not only limited to the Group’s financesbut includes all business segments and companies. Suitable management instruments were allocated to the risksidentified within the segments. According to their importance, risks were allocated to the core processes procurement,production and sales, and in accordance with risks to support processes such as IT, communications technologyand Human Resources. The risk assessment carried out is based on information obtained in interviews withkey employees. Risks are categorised in accordance with the same framework as that used in the internal controlsystem. For the top ten risks (including those which can lead to incorrect or fraudulent reporting), a detailed probabilityand impact analysis was carried out, which constitutes the basis for the introduction of an appropriate riskmanagement system. Risk management activities are focused on hedging currency and metal price risks and inmanaging receivables. Furthermore, new risks are identified through direct contact between the departments andrisk management.

32 Corporate Governance4. | Executive Management4.1| Members of the Executive ManagementOn 26 April 2009, Dr. Jürgen Bremer (CLO) left the Executive Management. As of 31 December 2009, the ExecutiveManagement of Von Roll Holding AG therefore comprises the following members:Name Nationality Born Position In the position sinceThomas Limberger D 1967 CEO (Delegate) August 2007Markus Scherbel D 1972 CFO October 2007Andreas Harting D 1970 Member September 2007Markus ScherbelChief Financial Officer (CFO)German nationalBusiness economics degree fromthe European Business School (ebs),Oestrich-Winkel, GermanyProfessional career1997–2000:Head auditor of accounting and consultancy services for accountingfirm Arthur Andersen, Stuttgart, Germany2000–2004:Head of International Financial Accounting at the listed company mgtechnologies ag, Frankfurt, Germany (formerly Metallgesellschaft AG)2004–2006:Member of the Executive Management and Chief Financial ControllerEurope of automotive supplier Hilite Group Europe, Marktheidenfeld,Germany2006–2007:Senior Vice President and Head of Corporate Accounting andReporting, OC Oerlikon Management AG, Pfäffikon SZ, SwitzerlandOther activitiesThere are no further activities or interests.Andreas HartingMember of the ExecutiveManagement,Marketing Strategy and ITGerman nationalBusiness economics degree,a Diplôme de Grande École anda Masters from the ESCP-EAPEuropean School of Management(Paris, Oxford, Berlin)Professional career1996–1997:Consultant, The Boston Consulting Group GmbH, Munich, Germany1997–1999:Product Manager for Johnson & Johnson GmbH, Düsseldorf, Germany2000–2002:Member of the Executive Board of United Screens Media AG,Unterföhring, Germany2002–2005:Manager, BBDO Consulting GmbH, Munich, Germany2005–2007:Senior Vice President (Global Marketing), OC OerlikonManagement AG, Pfäffikon SZ, SwitzerlandOther activitiesThere are no further activities or interests.4.24.3| Other activitiesInformation on other activities and interests of Executive Management members is shown in section 4.1 and forT. Limberger, Chairman of the Board of Directors and Delegate in section 3.1.| Management contractsThere are no management contracts with third parties.

Corporate Governance 335. | Remuneration, profit-sharing and loans5.1| Content of and procedure for determining remuneration and profit-sharing programmesThe People & Remuneration Committee of the Board of Directors draws up the parameters for the remuneration ofthe Members of the Board of Directors annually and submits them to the Board of Directors for approval. The servicesof an external adviser were not called upon during the reporting year. The People & Remuneration Committeeregularly reviews the contracts of employment and the relevant income of the CEO and the other Members of theExecutive Management. This is carried out on the principle of attracting the most suitable and well-qualified personnelfor the company. The management is paid fairly at normal market rates, based on salary comparisons, in linewith their abilities, experience and qualifications. The remuneration comprises a fixed wage plus a variable performance-relatedcomponent. The level of the performance-related components depends on the attainment of personaltargets set annually and the attainment of the company’s targets. The Members of the Board of Directorsreceived a fixed salary in the form of a cash payment in 2009. The CEO’s salary also covered his activities on behalfof the Board of Directors, i.e. he will not receive any additional remuneration for his activities as a Member of theBoard of Directors. The non-executive Members of the Board of Directors did not receive either additional remunerationor emoluments in the form of additional fees, shares or options. The Members of the Executive Board receiveda basic salary plus a performance-related salary component, 30 % of which is based on personal targetsand 70 % on the success of the company. The basic salary constitutes around 60 % and the performance-relatedsalary component constitutes 40 % of the whole salary.In 2007, a stock option plan was introduced for the Members of the Executive Management. Under this plan, theMembers of the Executive Management may be granted options free of charge each year, although there is noobligation to do so. The options may be exercised at any time for a period of three years for a price determined atthe grant date, if at the time of exercise, provided that the relevant member fulfills the criteria, e.g. is still employedby the company. A maximum of 50 % of the options granted may be exercised each year. The option plan entitlesthe beneficiary to subscribe to shares (equity settlement). The potential commitment to provide shares for optionswill be covered solely by the purchase of shares on the stock exchange.In 2007, 500,000 options to acquire 500,000 shares were granted to the Executive Management. The exerciseprice is fixed at CHF 20. The options issued under this tranche may be exercised from the grant date until 31 December2010; however, only 50 % may be exercised in 2007 and 2008 together, and also 50 % in 2009.In the reporting year, 500,000 options to acquire 500,000 shares were granted to Members of the Executive Management.The exercise price is fixed at CHF 12. The options issued under this tranche may be exercised from thegrant date until 31 December 2012; however, only 50 % may be exercised in 2009 and 2010, and 50 % in 2011. Pleasesee the notes to the financial statements for detailed information on the remuneration actually paid to the Membersof the Board of Directors and the Executive Management.

34 Corporate Governance6. | Participatory rights of shareholders6.16.26.36.46.5| Voting rights and representation restrictionsThe company’s Articles of Association do not contain any voting right restrictions and do not deviate from Swiss lawwith regard to the representation of voting rights. The Annual General Meeting adopts resolutions and conductselections with an absolute majority of the votes cast at the meeting, excluding any blank or invalid votes. This regulationapplies unless stipulated otherwise by mandatory legal provisions or provisions set out in the Articles ofAssociation. Each share carries one vote at the Annual General Meeting.| Quorum stipulated in the Articles of AssociationA decision by the Annual General Meeting on the winding-up of the company without liquidation requires at leasttwo 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 and704 of the Swiss Law of Obligations will apply to resolutions made by the Annual General Meeting.| 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 theAnnual General Meeting. The ordinary General Meeting takes place annually, no later than six months after the endof the financial year. The meeting is convened by the Board of Directors. The invitation to the Annual General Meetingis published in the Swiss Official Gazette of Commerce (SOGC) as well as in the Neue Zürcher Zeitung and inthe magazine Finanz und Wirtschaft. One or more shareholders who together represent at least 10 % of the sharecapital may call for an Extraordinary General Meeting; Extraordinary General Meetings must take place within90 days of receipt of such a request.| AgendaShareholders who together represent shares with a nominal value of at least CHF 1 million can ask for an item to beincluded on the agenda for discussion, but no later than 60 days before the day of the meeting. Requests must besubmitted in writing.| Entries in the share registerThe share capital of the company is exclusively comprised of bearer shares and consequently no share register iskept.7. | Change of control and defence measures7.17.2| Duty to make an offerVon Roll Holding AG stipulates that a major shareholder is obligated to make a public offer to purchase pursuant toArt. 32 and 52 SESTA (Federal Act on Securities Exchanges and Securities Trading) dated 24 March 1995. The thresholdhas not been raised.| Change of control clausesThere are no significant contractual agreements with the Board of Directors or the Executive Management in theevent of a change of control. The Articles of Association do not contain any change of control clauses in favour ofMembers of the Board of Directors and/or Executive Management.

Corporate Governance 358. | Auditor8.18.28.38.4| Duration of mandate and term of office of the lead auditorIn 2004, Deloitte AG, Zurich, was registered in the commercial register as the auditor for Von Roll Holding AG. MrDaniel O. Flammer was appointed the lead auditor in 2008. The Audit Committee oversees the activities of the auditors.The auditor is appointed on each occasion by the Annual General Meeting for one financial year, and the sameauditor may be reappointed in the next financial year. The applicable statutory maximum term of office for a leadauditor of seven years (Art. 730a Para. 2 Swiss Law of Obligations) is not limited by the Articles of Association.| Auditing feeThe fee paid to the auditor for the audit of the 2009 financial statements was TCHF 871 in total (previous year:TCHF 902).| Additional feesDuring the period under review, additional fees of TCHF 80.6 (previous year: TCHF 1,782) were paid for additionalservices relating to tax, compliance and transaction services. In financial year 2009, TCHF 38 were made availablefor tax advice and TCHF 43 for additional audit-related services.| Instruments for monitoring and managing the auditorThe Audit Committee of the Board of Directors assesses the performance, remuneration and independence of theauditor annually (see section 3.4.2). The Board of Directors proposes the election of the external auditor to the AnnualGeneral Meeting based on the recommendation of the Audit Committee. Unless there are particular groundsto do otherwise, the emphasis is on ensuring continuity. The Audit Committee assesses the scope of the audit bythe external auditor and the relevant procedures annually and discusses the audit findings with the external auditor.During the reporting year, two meetings were held with the representatives of the external auditor.9. | Information policyVon Roll Holding AG pursues a policy of transparent, truthful and proactive information. Whenever possible, employeesare informed first. Shareholders receive information through the annual report, half-yearly report, media releases,the Internet and at the Annual General Meeting. Von Roll Holding AG reports and comments on its resultson a half-yearly basis. Moreover, Von Roll Holding AG provides continuous information on important events accordingto the rules of ad hoc notifications. Upon request, shareholders can receive media releases from the press officeby fax or e-mail. These can be requested from Von Roll Holding AG, Steinacherstrasse 101, 8804 Au/Wädenswil,phone +41 (0)44 204 30 31, fax +41 (0)44 204 30 39, or e-mail press@vonroll.com. Von Roll Holding AG publishes allevents that are relevant to the stock quotation in accordance with the guidelines of SIX Swiss Exchange.

Financial Reporting 2009 – Consolidated Financial Statements 37Financial reportingConsolidated statement of comprehensive income 38Consolidated balance sheet 39Consolidated cash flow statement 40Consolidated statement of changes in equity 41Notes to the consolidated financial statements 43Auditor’s report – Report on the consolidated financial statements 88Income statement of Von Roll Holding AG 90Balance sheet of Von Roll Holding AG 91Notes to the statutory financial statements of Von Roll Holding AG 92Proposal for the use of accumulated profits of Von Roll Holding AG 97Auditor’s report – Report on the financial statements 98

38 Financial Reporting 2009 – Consolidated Financial StatementsConsolidated statement of comprehensive incomefor the financial year 2009in CHF 1,000 Note 20092008(restated)Gross sales 4 554,549 716,480Sales deductions – 5,120 – 6,425Net sales 549,429 710,055Cost of goods sold 6 – 441,490 – 545,392Gross profit 107,939 164,663Research and development expense 6 – 12,226 – 11,872Sales and distribution expense 6 – 35,484 – 47,134Administrative expense 6 – 58,692 – 54,311Restructuring expense 10 – 8,621 –Other operating expense 11 – 7,816 – 12,029Income from investment property, net 12 1,902 410Other operating income 13 4,507 10,343EBIT – 8,491 50,070Financial income 14 14,473 13,602Financial expense 15 – 18,286 – 22,520Result before tax – 12,304 41,152Income tax 16 962 – 11,397Net income for the period – 11,342 29,755Other comprehensive incomeExchange differences arising on translation of foreign operations 4,654 – 35,969Exchange differences on intercompany loans qualifying as equity – 1,281 – 10,517Realised exchange loss (+) and gain (–) from liquidated entities 3 – 34Actuarial gain (+) and loss (–) on defined benefit plans, net 38 4,539 – 9,010Income tax on actuarial gain and loss on defined benefit plans – 1,490 2,403Other comprehensive income for the period, net of tax 6,425 – 53,127Total comprehensive income for the period – 4,917 – 23,372Net income attributable to:Shareholders of the parent – 10,864 28,482Minority interests – 478 1,273Net income for the period – 11,342 29,755Total comprehensive income attributable to:Shareholders of the parent – 4,439 – 23,547Minority interests – 478 175Total comprehensive income for the period – 4,917 – 23,372Earnings per shareWeighted average number of shares outstanding (no. of shares) 17 178,362,251 182,534,818Basic earnings per share in CHF 17 – 0.061 0.156Diluted earnings per share in CHF 17 – 0.061 0.156

Financial Reporting 2009 – Consolidated Financial Statements 39Consolidated balance sheet at December 31, 2009Assetsin CHF 1,000 Note Dec 31, 2009 in %Dec 31, 2008Jan 01, 2008(restated) in % (restated) in %Current assetsCash and cash equivalents 29 62,416 100,469 330,778Trade accounts receivable 27 90,020 116,537 101,111Inventories 25 99,239 122,053 81,159Tax receivables 16 2,396 564 558Current financial assets 22 170 – –Other accounts receivable and prepaid expense 28 28,440 42,903 32,401Total current assets 282,681 54.3 % 382,526 62.9 % 546,007 77.7 %Non-current assetsProperty, plant and equipment 18 103,265 100,386 84,234Goodwill 19 39,932 38,867 10,686Other intangible assets 20 47,338 49,548 14,029Investment property 21 4,902 4,890 5,788Non-current financial assets 22 3,471 2,388 1,833Pension plan assets 38 17,875 11,080 15,966Deferred tax assets 16 20,787 18,734 24,198Total non-current assets 237,570 45.7 % 225,893 37.1 % 156,734 22.3 %Total assets 520,251 100.0 % 608,419 100.0 % 702,741 100.0 %Equity and liabilitiesin CHF 1,000 Note Dec 31, 2009 in %Dec 31, 2008Jan 01, 2008(restated) in % (restated) in %LiabilitiesCurrent liabilitiesTrade accounts payable 33 40,352 58,184 37,600Current tax payables 16 1,310 3,409 3,982Current financial liabilities 31 1,229 1,871 5,596Current provisions 32 3,890 1,176 2,809Other current liabilities and accruals 34 56,341 80,176 58,640Total current liabilities 103,122 19.9 % 144,816 23.8 % 108,627 15.4 %Non-current liabilitiesNon-current financial liabilities 31 87 613 27,035Post-employment benefit obligations 38 23,347 22,965 21,900Deferred tax liabilities 16 9,151 9,144 10,363Non-current provisions 32 11,849 12,191 14,967Total non-current liabilities 44,434 8.5 % 44,913 7.4 % 74,265 10.6 %Total liabilities 147,556 28.4 % 189,729 31.2 % 182,892 26.0 %EquityShare capital 30 18,479 18,479 18,479Group reserves 354,216 399,683 493,645Equity attributable toshareholders of the parent company 372,695 71.6 % 418,162 68.7 % 512,124 72.9 %Minority interests – 0.0 % 528 0.1 % 7,725 1.1 %Total equity 372,695 71.6 % 418,690 68.8 % 519,849 74.0 %Total equity and liabilities 520,251 100.0 % 608,419 100.0 % 702,741 100.0 %

40 Financial Reporting 2009 – Consolidated Financial StatementsConsolidated cash flow statement for the financial year 2009in CHF 1,000 Note 20092008(restated)Operating activitiesResult before tax – 12,304 41,152Financial result 14/15 3,813 8,918Depreciation, amortisation and (reversal of) impairment 9 19,067 12,644EBITDA 10,576 62,714Gain (–)/Loss (+) from the sale of non-current assets 11/13 – 85 11Result from the sale of investment property 12 – 198Changes in non-current provisions 541 – 3,335Equity-settled share-based payment transactions 1,134 534Cash flow before changes in net working capital 12,166 60,122Changes in inventories 22,546 – 6,466Changes in accounts receivable 27,631 – 13,061Changes in accounts payable – 18,132 3,318Changes in other current assets 8,241 – 7,183Changes in current provisions and other current liabilities – 20,307 11,908Cash generated from operating activities 32,145 48,638Income tax paid 16 – 2,675 – 3,942Cash flow from operating activities 29,470 44,696Investing activitiesCapital expenditure for property,plant and equipment and intangible assets 18/20 – 21,224 – 27,046Cash inflow/outflow from acquisitions 2 1,374 – 135,961Cash outflow from deconsolidation 2 – 98 –Proceeds from disposal of non-current assets 205 1,180Payments to acquire financial assets – 1,980 –Interest received 417 4,751Cash inflow from long-term loans 426 –Cash flow from investing activities – 20,880 – 157,076Financing activitiesRepayment of financial liabilities – 2,045 – 30,340Purchase of treasury shares 30 – 12,885 – 97,416Sale of treasury shares 30 6,377 37,393Interest paid – 2,456 – 3,002Dividends paid – 35,704 – 18,368Cash flow from financing activities – 46,713 – 111,733Change in cash and cash equivalents – 38,123 – 224,113Cash and cash equivalents at 1 January 100,469 330,778Effects of changes in foreign exchange rates 70 – 6,196Change in cash and cash equivalents – 38,123 – 224,113Cash and cash equivalents at 31 December 62,416 100,469

Financial Reporting 2009 – Consolidated Financial Statements 41Consolidated statement of changes in equityfor the financial year 2009In the reporting year 2008, consolidated equity (restated) changed as follows:in CHF 1,000SharecapitalCapitalreservesTreasurysharesCurrencytranslationadjustmentsRetainedearningsAttributableto owners ofthe parentMinorityinterestsBalance at 1 January 2008 (published) 18,479 396,688 – 8,673 – 18,454 126,619 514,659 7,725 522,384Restatement 1 – – – – – 2,535 – 2,535 – – 2,535Balance at 1 January 2008 (restated) 18,479 396,688 – 8,673 – 18,454 124,084 512,124 7,725 519,849Net income for the period – – – – 28,482 28,482 1,273 29,755Exchange differences arising on translationof foreign operations (restated) 1 – – – – 34,871 – – 34,871 – 1,098 – 35,969Exchange differences on intercompany loansqualifying as equity – – – – 10,517 – – 10,517 – – 10,517Realised exchange gain from liquidatedentities – – – – 34 – – 34 – – 34Actuarial loss on defined benefit plans – – – – – 9,010 – 9,010 – – 9,010Income tax on actuarial loss on definedbenefit plans – – – – 2,403 2,403 – 2,403Other comprehensive income for the period – – – – 45,422 – 6,607 – 52,029 – 1,098 – 53,127Share based payments – – – – 535 535 – 535Purchase/sale of treasury shares – – – 60,772 – 749 – 60,023 – – 60,023Dividends – – – – – 18,368 – 18,368 – – 18,368Purchase of minority shares – – – – 1,370 9,270 7,900 – 7,900 –Issue of minority shares (restated) 1 – – – – – 459 – 459 528 69Total transactions with owners – – – 60,772 – 1,370 – 8, 273 – 70,415 – 7,372 – 77,787Balance at31 December 2008 (restated) 18,479 396,688 – 69,445 – 65, 246 137,686 418,162 528 418,690TotalequityTotal Group reserves at theend of December 2008 (restated) 399,6831Details in Note 1

42 Financial Reporting 2009 – Consolidated Financial StatementsIn the reporting year 2009, consolidated equity changed as follows:in CHF 1,000SharecapitalCapitalreservesTreasurysharesCurrencytranslationadjustmentsRetainedearningsAttributableto owners ofthe parentMinorityinterestsBalance at 1 January 2009 18,479 396,688 – 69,445 – 65,246 137,686 418,162 528 418,690Net income for the period – – – – – 10,864 – 10,864 – 478 – 11,342Exchange differences arising on translationof foreign operations – – – 4,654 – 4,654 – 4,654Exchange differences on intercompany loansqualifying as equity – – – – 1,281 – – 1,281 – – 1,281Realised exchange loss from liquidatedentities – – – 3 – 3 – 3Actuarial gain on defined benefit plans – – – – 4,539 4,539 – 4,539Income tax on actuarial gain on definedbenefit plans – – – – – 1,490 – 1,490 – – 1,490Other comprehensive income for the period – – – 3,376 3,049 6,425 – 6,425Share based payments – – – – 1,134 1,134 – 1,134Purchase/sale of treasury shares – – – 2,845 – – 3,663 – 6,508 – – 6,508Dividends – – – – – 35,704 – 35,704 – – 35,704Purchase of minority shares – – – – 50 50 – 50 –Total transactions with owners – – – 2,845 – – 38,183 – 41,028 – 50 – 41,078Balance at 31 December 2009 18,479 396,688 – 72,290 – 61,870 91,688 372,695 – 372,695TotalequityTotal Group reserves at theend of December 2009 354,216

Financial Reporting 2009 – Consolidated Financial Statements 43Notes to the consolidated financial statements 20091. | Significant accounting policiesGeneral informationVon Roll Holding AG (the company) with its subsidiaries (together Von Roll) is an international manufacturing andservice company. The major activities are presented in the Notes to the Business Segments (Note 5). The companyis a publicly traded company listed on the Swiss stock exchange (SIX Swiss Exchange). The address of its registeredoffice is Passwangstrasse 20, 4226 Breitenbach, Switzerland.Summary of significant accounting policiesThe consolidated financial statements of Von Roll Holding AG are prepared in accordance with the InternationalFinancial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), and in compliancewith the listing regulations of SIX and Swiss Law.The consolidated financial statements are issued in Swiss francs (CHF), as the main Von Roll companies are operativein and financed out of Switzerland. The financial statements are presented in CHF thousand (TCHF). Due to thechosen presentation, immaterial rounding differences can occur. Use of the year in connection with the presentationof balance sheet information relates in principle to 31 December of the year in question unless specified otherwise.Certain minor reclassifications and additional disclosures have been made to the consolidated financial statementscompared with the previous year’s figures.Adoption of new accounting policiesThe following new and revised International Accounting Standards Board (IASB) standards were adopted for the firsttime by Von Roll for the financial year starting on 1 January 2009.» IAS 1 (revised) “Presentation of Financial Statements”. The revised standard stipulates new terms for the componentsof the financial statement. They are, however, not obligatory. If a retrospective restatement of items is madeto the previous year’s figures or items are reclassified, a statement of financial position must be made at the beginningof the comparative period. In addition, changes in equity due to transactions with owners must be shownas a separate component. Any changes to equity not attributable to relationships with owners must be disclosedin a statement of comprehensive income. Companies may choose between a single statement of comprehensiveincome and two statements (separate profit and loss accounts and statement of comprehensive income). Von Rollhas opted for a single statement of comprehensive income. The 2009 Annual Report was drawn up in accordancewith the revised disclosure requirements.» IFRS 8 “Operating Segments”. IFRS 8 replaces IAS 14 “Segment Reporting”. This requires a management approachunder which segment information is presented on the same basis as for internal reporting purposes. As externalreporting at Von Roll already corresponded to internal reporting in previous periods, there was no change to thenumber and definition of the reportable segments compared with the 2008 Annual Report. Compared with the2008 Annual Report a reconciliation was made to the results for the period.The operating segments are reported analogous to internal reporting to chief operating decision maker. AtVon Roll, this position is held by the Board of Directors of Von Roll Holding AG.The comparative information was adjusted and likewise presented in accordance with IAS 1 (revised) and IFRS 8.These changes to the accounting policies only affected the presentation and had no impact on the result andequity.» Improved Disclosures about Financial Instruments (revision of IFRS 7 Financial Instruments: Disclosures). Due tothe changes to IFRS 7, disclosures about financial instruments were enhanced with respect to disclosures aboutfair value measurements and liquidity risk. Von Roll exercised its right not to provide any comparative informationfor these enhanced disclosures. This is in line with the transitional provisions that were introduced as part of theamendments.

44 Financial Reporting 2009 – Consolidated Financial StatementsThe following enhancements to the standards and interpretations are to be adopted for the first time for the financialyear starting on 1 January 2009. They are, however, not relevant to Von Roll at present.» Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” and IAS 27 “Consolidatedand Separate Financial Statements in accordance with IFRS – Costs of an Investment in a Subsidiary,Jointly Controlled Entity or Associate”» Amendments to IFRS 2 “Share-based Payment – Vesting Conditions and Cancellations”» IAS 23 (as revised in 2007) “Borrowing Costs”» Amendments to IAS 32 “Financial instruments: Presentation” and IAS 1 “Presentation of Financial Statements –Puttable Financial Instruments and Obligations arising on Liquidation”» Amendments to IFRIC 9 “Reassessment of Embedded Derivatives” and IAS 39 “Financial Instruments: Recognitionand Measurement”» IFRIC 13 “Customer Loyalty Programmes”» IFRIC 15 “Agreements for the Construction of Real Estate”» IFRIC 16 “Hedges of a Net Investment in a Foreign Operation”» IFRIC 18 “Transfers of Assets from Customers”

Financial Reporting 2009 – Consolidated Financial Statements 45The following new and revised standards and interpretations are issued by the IASB. These standards were noteffective for the reporting period and have not been adopted prematurely in the present consolidated financialstatements. The following table shows the impact estimated by the Executive Management:Effective forannual periodsbeginning onor afterPlanned adoption byVon RollNew StandardsIFRS 9 Financial Instruments: Measurement and Classification 1 January 2013 Financial year ***2013Amendments to StandardsIAS 24 (revised Related Party Disclosures 1 January 2011 Financial year * *2009)2011IAS 27 revised Consolidated and Separate Financial Statements 1 July 2009 Financial year ***2010Amendments to Financial Instruments: Presentation – Classification of 1 February 2010 Financial year * *IAS 32Rights Issues2011Amendments to Financial Instruments: Recognition and Measurement – 1 July 2009 Financial year ***IAS 39 Eligible Hedged Items2010IFRS 1 revised First-time Adoption of International Financial Reporting 1 July 2009 Financial year * *Standards2010Amendments to First-time Adoption of International Financial Reporting 1 January 2010 Financial year * *IFRS 1Standards – Additional Exemptions2010Amendments to Group Cash-settled Share-based Payment Transactions 1 January 2010 Financial year * *IFRS 22010IFRS 3 revised Business Combinations 1 July 2009 Financial year ***2010Amendments to Non-current Assets Held for Sale and Discontinued1 July 2009 Financial year * *IFRS 5 Operations2010Misc. Changes in IFRS (Annual improvements, April 2009) 1 July 2009 Financial year ***1 January 20102010New interpretationsIFRIC 17 Distributions of Non-cash Assets to Owners 1 July 2009 Financial year * *2010IFRIC 19 Extinguishing Financial Liabilities with Equity1 July 2010 Financial year * *Instruments2011Amendments to InterpretationsAmendment toIFRIC 14IAS 19 – The Limit on a Defined Benefit Asset, MinimumFunding Requirements and their Interaction –Prepayments of a Minimum Funding Requirement1 January 2011 Financial year2011**** No or no material effects are expected on the consolidated financial statements of Von Roll.** Additional disclosures or changes in the presentation of the consolidated financial statements of Von Roll are mainly expected.*** The effects on the consolidated financial statements of Von Roll can not yet be reliably determined.

46 Financial Reporting 2009 – Consolidated Financial StatementsScope of consolidationAll companies in which the Company holds a majority equity investment and the majority of the voting rights orexercises control in some other way are fully consolidated. A list of the significant consolidated companies is providedin Note 23 of this Annual Report.Associated companies (investments of between 20 and 50 % in a company’s equity) are consolidated using theequity method, where Von Roll exercises a significant influence. 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 finan cialstatements, using the historical cost convention as modified by the revaluation of financial assets at fair valuethrough profit and loss and applying uniform valuation and presentation principles. The purchase method of accountingis used for acquired businesses.Minority interestsMinority interests have been included as part of the Group’s equity in the consolidated financial statements insteadof a separate category and are no longer deducted in order to obtain the Group’s net income figure.Foreign currency translationIncome, expense and cash flows of consolidated companies have been translated into Swiss francs using the respectiveaverage-weighted exchange rates. The balance sheet values are translated using the year-end exchangerates. Exchange rate differences from variations in exchange rates compared to previous years arising from thetranslation of equity in subsidiaries and long-term intercompany loans (only loans of an equity nature) and differencesresulting from the translation of net income are allocated to the other comprehensive income. Translationdifferences resulting from the application of this method are classified as equity until the disposal of the investment.Current foreign currency gains and losses are shown in net financial income.Revenue recognitionSales are recognised when the material risks and rewards of ownership of the goods or services rendered havebeen transferred to a third party and are reported net of sales tax. Provisions for rebates and discounts to customersbased on contract terms are recognised in the same period as related sales are recorded.Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interestrate applicable. Dividend income from investments is recognised when the shareholder’s rights to receive paymenthave been established.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, risk-free investment instruments which can be converted into cashwithin 90 days.Trade accounts receivableThe reported values represent the invoiced amounts. Valuation allowances for troubled loans are determinedperiodically.Other accounts receivable and prepaid expenseOther accounts receivable comprise receivables from social security institutions for indirect taxes and othernon-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 referenceto the stage of completion of the contract activity at the balance sheet date, measured based on the proportionof contract costs incurred for work performed to date relative to the estimated total contract costs, expectwhere this would not be representative of the stage of completion. Variations in contract work, claims and incentivepayments are included to the extent that they have been agreed with the customer.

Financial Reporting 2009 – Consolidated Financial Statements 47Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to theextent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expensesin the period in which they are incurred.When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised asan expense immediately.Amounts due from customers under construction contracts comprise contracts where the costs incurred plus recognisedprofits exceed payments already received. If the payments received are higher than the costs incurredplus 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. Prepaymentsfor which the customer is entitled to a refund are shown as a liability on the liabilities side.InventoriesPurchased products are valued at acquisition cost while internally generated products are valued at manufacturingcost including production-related overheads. Inventories held at the balance sheet date is valued at standard cost adjustedfor capacity and cost deviations from the effective weighted average cost of the reporting period. Valuation allowancesare recognised for goods with a lower net realisable value or which are slow-moving. Unsaleable goods are fullywritten off.Property, plant and equipmentProperty, plant and equipment are valued at historical acquisition or production cost and depreciated on a straightlinebasis over the following range of estimated useful lives:Permanent buildingsTemporary buildingsTechnical installations and machineryPlant and office equipment Computer equipmentVehicles25 years10 – 20 years10 – 20 years5 – 10 years3 – 5 years3 – 8 yearsLand is not depreciated.Subsequent costs are included in the carrying amount of the asset, only when it is probable that future economicbenefits associated with the item will flow to Von Roll and the cost of the item can be measured reliably. All othermaintenance and repair costs are charged to the income statement during the period in which they are incurred.Property, plant and equipment items financed by leases giving rights to use the assets as if owned are capitalisedwith their estimated present value at the inception of the lease and depreciated in the same manner as the relevanttangible asset category.Borrowing costs associated with the construction of property, plant and equipment are capitalised. Von Roll doesnot currently have any relevant property, plant and equipment.Investment propertyInvestment property, principally comprising undeveloped land as well as separable rented offices and productionbuildings, is held for long-term rental yields and is not used by Von Roll.Investment property has been valued at historical acquisition cost less depreciation on a straight-line basis over anexpected useful life of 25 years.During a balance sheet restructuring in previous years, individual investment properties were revalued above thehistorical cost. Current market values are regularly determined by an independent third party and are disclosedadditionally in the Notes.

48 Financial Reporting 2009 – Consolidated Financial StatementsGoodwillGoodwill represents the excess cost of an acquisition over the fair value of Von Roll’s share of the net identifiableassets of the acquired subsidiary at the date of acquisition. Goodwill is carried in the functional currency of the acquiredbusiness and is allocated to a cash-generating unit.Goodwill is recognised as an asset with an indefinite life and is subject to annual impairment testing. Impairmentlosses have an immediate effect on net income. A recognised impairment loss is not reversed in a subsequentperiod. Goodwill is presented separately in the consolidated balance sheet. Negative goodwill is recorded in theincome statement. No amounts were recorded relating to negative goodwill in the present consolidated financialstatements. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to theentity sold.Other intangible assetsLicences, trademarks and similar rights as well as other intangible assets have a definite useful life and are carriedat historical cost less amortisation. Amortisation is calculated using the straight-line method to allocate the costover estimated useful lives, ranging between five and twelve years.Reliably measurable costs for licences, trademarks and similar rights as well as for product development arerecognised only if it is probable that the expected future economic benefits attributable to each asset will flow toVon Roll.Financial assetsFinancial assets comprise business-related investments in securities and long-term loans to associated companiesand 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 atamortised cost less any impairment. Derivatives are categorised as financial assets valued at fair value throughprofit 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 are subsequently measuredusing the equity method. Von Roll’s investment in associated companies includes goodwill (net of any accumulatedimpairment loss) identified at acquisition.Impairment of tangible and intangible assets without goodwillTangible and intangible assets without goodwill are reviewed for impairment at least annually or whenever events orchanges in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognisedwith an impact on income for the amount by which the asset’s carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. The valuein use is based on future expected discounted cash flows. For the purposes of assessing impairment, assets aregrouped at the lowest level for which there are separately identifiable cash flows (cash-generating units). If the reasonfor an impairment that was previously recognised no longer applies, it is reversed.Share capitalBearer shares are classified as share capital. Issuing proceeds which exceed the nominal value (premium) arereported in the item capital reserves under Group reserves.Share-based paymentsEquity-settled share-based payments to employees are measured at the fair value of the equity instruments at thegrant date. Details regarding the determination of the fair value of equity-settled share-based transactions are setout in Note 30. The fair value determined at the grant date of the equity-settled share-based payments is expensedon a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventuallyvest. At each balance sheet date, Von Roll revises its estimates of the number of equity instruments expectedto vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remainingvesting period, with a corresponding adjustment to the equity-settled employee benefits reserve, which is allocatedto the retained earnings.

Financial Reporting 2009 – Consolidated Financial Statements 49The policy described above is applied to all equity-settled share-based payments that were granted after November7, 2002 that vested after January 1, 2005. No amount has been recognised in the financial statements in respectof other equity-settled share-based payments.Financial liabilitiesFinancial liabilities are recognised initially at fair value, net of transaction costs incurred. Financial liabilities aresubsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemptionvalue is recognised in the income statement over the period of the liability using the effective interestmethod.All increases or decreases in financial liabilities are accounted for as of the trade date.ProvisionsProvisions for environmental restoration, contingencies and commitments, announced restructurings and legalclaims are only recognised if Von Roll has an existing legal or constructive obligation resulting from past events, ifit is more likely than not that an outflow of resources will be required to settle the obligation, or if the amount can bereliably estimated. Restructuring provisions comprise employee termination payments, lease termination penaltiesand other costs. Provisions are not recognised for future operating losses. The creation and dissolution ofrestructuring provisions is reported in other operating income.Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement isdetermined by considering the class of obligations as a whole.Other short-term liabilities and deferred incomeOther short-term liabilities comprise payables to social security institutions and other non-operating payables tothird parties due within one year. Furthermore, this item includes deferred income from customers and accruedexpenses 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 Rollhas both defined benefit and defined contribution plans. The defined benefit obligation is calculated annually byindependent, qualified actuaries using the projected unit credit method. This applies in particular for Swiss pensionplans.Current pension claims are recognised in the income statement in the period in which they accrue. Retrospectiveimprovements to benefits resulting from changes to plans are recognised on a straight-line basis over the averageperiod until they vest through profit or loss. If entitlements to pensions vest immediately, they are recognised in theincome statement immediately.Differences between the actual trends and anticipated trends lead to actuarial gains and losses. Applying the optionfor recognising actuarial gains and losses of this kind, Von Roll recognises them directly in equity in the othercomprehensive income. Since the deviations can be material, this can have a considerable effect on the Group’sequity.The recognised assets are determined in accordance with the interpretation IFRIC 14 “The Limit on a Defined BenefitAsset, Minimum Funding Requirements and their Interaction”.For defined contribution plans, Von Roll pays contributions to publicly or privately administered pension plans ona mandatory, contractual or voluntary basis. Von Roll has no further payment obligations once the contributions havebeen paid.(b) Other long-term employee benefits and post-employment obligationsSome Von Roll companies provide other long-term employee benefits or post-employment benefits. The entitlementto these benefits is usually dependent on years of service. The expected costs of these benefits are recognised inthe income statement in the period in which they arise and are also calculated for material plans using the projectedunit credit method in the same way as defined benefit plans. Changes in actuarial assumptions are immediatelyrecognised in the income statement. These obligations are valued annually by independent, qualified actuaries.

50 Financial Reporting 2009 – Consolidated Financial Statements(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 forsocial security, payroll taxes, health insurances and similar. Accruals for staff-related costs comprise accruals forcontractual and anniversary bonuses, unclaimed annual leave entitlement, flexitime balances and similar. Von Rollrecognises accruals where contractually obliged or where there is a past practice that has created a constructiveobligation.Income taxesIncome taxes include all taxes based upon the taxable profit of Von Roll. Other taxes not based on income, suchas 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 arisingbetween the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by thebalance sheet date and that are expected to apply when the related deferred income tax asset is realised or thedeferred income tax liability is settled.Deferred income tax assets for temporary differences and unused tax losses are recognised to the extent that it isprobable that future taxable profit will be available against which the temporary differences can be utilised andrealisable temporary differences can be expected.Deferred income tax on temporary differences arising on investments in subsidiaries and associated companies isprovided, except where the timing of the reversal of the temporary difference is controlled by Von Roll and it isprobable that the temporary difference will not reverse in the foreseeable future.LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classifiedas operating leases. Payments made under operating leases (net of any incentives received from the lessor) arecharged to the income statement on a straight-line basis over the period of the lease.Business segmentsReportable business segments are determined on the basis of the management approach. External segmentreporting is then carried out on the basis of the internal Group organisation and management structure as well asinternal financial reporting to the chief operating decision maker. At Von Roll, this position is held by the Board ofDirectors of Von Roll Holding AG.The primary segmentation is by business segment, and the secondary is by geographical segment. A businesssegment is a group of assets and operations engaged in providing products or services that are subject to risks andreturns which are different from those of other business segments. A geographical segment is engaged in providingproducts and services within a particular economic environment that are subject to risks and returns which aredifferent from those of segments operating in other economic environments.Intra-segment transfers and transactions are entered into under normal commercial terms and conditions thatwould 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 riskand price risk), credit risk, liquidity risk and cash flow risk. Von Roll’s overall risk management programme focuseson the unpredictability of financial markets and seeks to minimise potential adverse effects on Von Roll’s financialperformance. 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 Directorsand the Executive Management. Risk management is monitored by Corporate Finance and Auditing and continuouslyreconciled with each operational entity (please refer to Von Roll Holding AG – annual financial statements compiledin accordance with the Swiss Commercial Code: Note 10). It covers identified financial risk factors as describedin the previous paragraph.

Financial Reporting 2009 – Consolidated Financial Statements 51(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, Israeli shekel and 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 fromrecognised assets and liabilities and investments carried out in foreign currencies.To manage its foreign exchange risk, Von Roll uses, wherever necessary, forward contracts. These are exclusivelyfair value hedges from which a loss of TCHF 61 was incurred in the reporting period. Foreign exchange risk ariseswhen commercial transactions of an operation are not denominated in the presentation currency CHF, but insteadin another currency. There are significant currency risks with respect to the euro and US dollar, to the amount ofCHF 37.8 million and CHF 35.7 million respectively. Taken together all other currencies account for a foreign exchangerisk of CHF 37.7 million. A change in all foreign currency exchange rates of 1 % would impact the pre-tax resultof the Group by around CHF 1.1 million, while a change in all foreign currency exchange rates of 5 % would have animpact of approximately CHF 11.6 million on the equity. This impact results from positions in cash and cash equivalents,accounts receivable, financial liabilities and accounts payable.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.Von Roll holds up to USD 100 of million derivative financial instruments as open foreign currency items which areautomatically closed in the event of depreciation of more than 4 %. Von Roll has granted a restraint on disposal oncash and cash equivalents to safeguard a derivative financial instrument.Price riskVon Roll is exposed to commodity risk relating to copper. To minimise this risk, the determination of sales prices isbased on prevailing copper prices at the time of the transaction. Copper in stock, for which there are no client orders,is also hedged in significant cases by means of derivatives. These are exclusively fair value hedges from whicha loss of TCHF 577 was incurred in the reporting period. This compared with profits of TCHF 514 from revaluation ofunderlying transactions.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 ofproducts are made to customers with an appropriate credit history. Management defines credit limits for each customerthat are continually monitored and adjusted. Additionally, the outstanding balances of certain customers arecovered by credit insurance facilities. The nominal value of accounts receivable less valuation allowances is seen asan approximation of their fair value. Von Roll takes account of the risk of default by a counterparty by only investingwith 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 daysor 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 havebeen drawn up on the basis of undiscounted cash flows of financial liabilities based on the earliest date on whichthe Group can be required to pay. The tables solely include repayments because Von Roll is currently not drawingthe long-term loans at its disposal because of its positive net liquidity and to optimise its financing structure. Futureinterest payments are expected to be immaterial.

52 Financial Reporting 2009 – Consolidated Financial StatementsThe due dates are as follows as of December 31, 2009:in CHF 1,000 Within 1 year 1 to 5 year More than 5 years TotalNon-current financial liabilities – 71 16 87Trade accounts payable 40,352 – – 40,352Current financial liabilities 654 – – 654Total liabilities without derivatives 41,006 71 16 41,093Derivatives (cash inflow) – 86,425 – – – 86,425Derivatives (cash outflow) 87,000 – – 87,000Total derivatives 575 – – 575Total financial liabilities 41,581 71 16 41,668The due dates as of December 31, 2008 had the following structure:in CHF 1,000 Within 1 year 1 to 5 year More than 5 years TotalNon-current financial liabilities – 580 33 613Trade accounts payable 58,184 – – 58,184Current financial liabilities 1,871 – – 1,871Total 60,055 580 33 60,668(d) Cash flow and fair value interest rate riskThe only significant interest-bearing asset of the Von Roll Group is the cash and cash equivalents position. Theseare subject to interest rate risk. An increase of 1 % in the interest rate would increase interest income by aroundCHF 0.6 million, while a 1 % decrease would reduce interest income by around CHF 0.6 million.Von Roll’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose Von Rollto the risks of higher interest expenses in future. Borrowings issued at fixed rates expose Von Roll to a balance sheetvaluation risk. Further details on interest rates 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 whilemaximising returns through the optimisation of the debt and equity balance. The equity ratio increased slightly from69 % as of the end of 2008 to 72 % as of 31 December 2009. At the end of both 2008 and 2009 the Group’s financialposition was positive: net liquidity amounts to CHF 61 million (2008: CHF 98 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. Derivatives are generally classified as either(1) hedges of fair value of recognised assets, liabilities or a firm commitment (fair value hedge); (2) hedges of highlyprobable forecast transactions (cash flow hedges); or (3) hedges of investments in foreign subsidiaries. Currently allchanges in the fair value of any derivative instruments that do not qualify for hedge accounting or cash flow hedgingare recognised immediately in the income statement. Changes in the fair value of hedging transactions that qualifyfor hedge accounting are reported in the same item of the income statement as the corresponding change in fairvalue of the underlying transaction. Results from ineffective hedging transactions are reported in the financialresult.Assumption and use of estimatesVon Roll’s principal accounting policies are set out in this section of the consolidated financial statements and arebased on the International Financial Reporting Standards (IFRS). Significant judgements and estimates are used inthe preparation of the consolidated financial statements, which to the extent that actual outcomes and results maydiffer from these assumptions and estimates, could affect the accounting in the areas described. The estimates andunderlying assumptions are based on historical experience and various other factors that are believed to be reasonableunder the given circumstances. Subsequent outcomes may deviate from these estimates. The estimates andunderlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary ifthere are changes in the circumstances on which the estimate was based, or as a result of new information or more

Financial Reporting 2009 – Consolidated Financial Statements 53experience. Such changes are recognised in the period in which the estimate is revised. The key assumptions aredescribed 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 havebeen transferred to the customer. The management believes that the total accruals and provisions for these itemsare adequate, based on the currently available information.Property, plant and equipment and intangible assets, including goodwillProperty, plant and equipment and intangible assets, including goodwill are reviewed at least annually for impairment.To assess if any impairment exists, estimates are made of future cash flows expected to result from use of theasset and its eventual disposal.Income taxSignificant estimates are required in determining current and deferred assets and liabilities for income taxes. Someof these estimates are based on interpretations of existing tax laws or regulations. The management believes thatthe estimates are reasonable and that the recognised assets and liabilities for income tax-related uncertainties areadequately recognised. This applies in particular for the capitalisation of tax loss carryforwards, which is based onexpected future gains.Pensions and other post-employment benefitsMost Von Roll employees participate in post-employment defined benefit plans. The calculations of the recognisedassets and liabilities from such plans are based upon statistical and actuarial calculations. Where the calculationsdiffer from the actuarial assumptions and are approved by the management, these can impact the assets or liabilitiesrecognised in the balance sheet in future periods.Legal provisionsSeveral Von Roll companies are party to various legal proceedings. Based on current knowledge, the managementhas made assumptions of the possible impact of these open legal claims and has made corresponding pro visions.Environmental provisionsManagement believes that total provisions for environmental matters are adequate based upon the informationcurrently available.Retrospective change to previous year’s figures (restatement)A pension fund and a fund for other long-term employee benefits were recognised retrospectively as of 1 January2008. Corrections are made in accordance with IAS 8 and IAS 1, whereby an additional balance sheet is presentedat the beginning of the comparative period. Overall, this resulted in the following changes to equity as of 1 January2008.in CHF 1,000Increase in post-employment benefit obligations (Note 38) – 3,001Increase in non-current provisions (Note 32) – 709Increase in deferred tax assets 1,175Decrease in equity (retained earnings) – 2,535There was a negative effect of TCHF 156 on the net income for the period. This is made up of the following items:» Increase in administrative expense of TCHF 63,» Increase in financial expense of TCHF 172 and» Reduction in tax expense of TCHF 79.There was a positive effect of TCHF 124 on the other items of the total comprehensive income for the period, leadingto a reduction overall of TCHF 32. All corrections relate to subsidiaries excluding minority interests. The effect on thebasic earnings and diluted earnings per share is CHF – 0.001.

54 Financial Reporting 2009 – Consolidated Financial StatementsChanges to equity as of 31 December 2008 are made up of the following items:in CHF 1,000Increase in post-employment benefit obligations – 3,043Increase in non-current provisions – 715Increase in deferred tax assets 1,191Decrease in equity (retained earnings) – 2,567Furthermore, within the Group reserves, TCHF 1,098 of retained earnings have been reclassified as currency translationadjustments, as minority interests in the 2008 currency translation adjustments recognised in equity wereincluded in retained earnings instead of currency translation adjustments. Minority interests as of 31 December2008 were also increased by TCHF 459 to the detriment of retained earnings, as part of the premium paid in byVon Roll was transferred to minority interests.On balance, there was no effect on the cash flow statement for financial year 2008 as a result of restatements.Only minor restatements were made in cash flow from operating activities. These related to the profit before tax,financial result and changes in non-current provisions items.

Financial Reporting 2009 – Consolidated Financial Statements 552.| Changes in the scope of consolidationVon Roll Transformers Ltd.On 25 September 2008, Von Roll purchased Von Roll Transformers Ltd. (previously Enerco Enterprises) based inRamat Ha’Sharon, Israel, in its entirety and received 80 % of the shares immediately. The remaining 20 % of the shareswere transferred as of 31 December 2009.The purchase prices for 100 % of the shares, which was paid in cash, amounts to TCHF 76,915. The Group also acquiredfinancial liabilities of TCHF 19,990. The cash outflow reported last year in connection with the purchase priceamounted to TCHF 78,373. In the reporting year further payments to the amount of TCHF 168 were made for acquisitioncosts. In the first six months of 2009 Von Roll received a repayment on the purchase price on the basis oftargets being met to the amount of TCHF 1,626, resulting in a net capital inflow of TCHF 1,458 in financial year 2009.This repayment has no effect on the recognised goodwill because it was already included in the 2008 financialstatements as accruals. There may be further adjustments to the purchase price in financial year 2010 on the basisof targets being met.The process of determining fair values for Von Roll Transformers Ltd.’s identifiable assets, liabilities and contingentliabilities was completed in financial year 2009. In addition to the figures published in last year’s Annual Report,intangible assets of TCHF 24,243 were identified. Goodwill decreased accordingly. The calculation of final net assetsand goodwill is shown below:in CHF 1,000Book valueFair ValueadjustmentFair ValueCash and cash equivalents 268 268Trade accounts receivable 14,816 14,816Inventories 53,085 53,085Current assets 3,311 3,311Tangible and other non-current assets 5,706 5,706Intangible assets – 32,399 32,399Deferred tax assets 3,124 – 2,121 1,003Total assets 80,310 30,278 110,588Trade accounts payable – 15,921 – 15,921Financial liabilities – 19,990 – 19,990Other liabilities and deferred income – 8,606 – 8,606Post-employment benefit obligations – 1,675 42 – 1,633Deferred tax liabilities – 744 – 744Total liabilities – 46,936 42 – 46,894Net assets 33,374 30,320 63,694Goodwill 23,574Total purchase consideration 87,268Accrued purchase consideration 10,353Consideration paid in cash 76,915Financial liability taken-over 19,990Cash and cash equivalents acquired – 268Net cash outflow 96,637The intangible asset already identified represents an agreement prohibiting competition with the vendor of thecompany to the amount of TCHF 8,156 and client relationship capital of TCHF 24,243. The useful life of the recognisedrelationship is assessed as extremely stable and with no time limit on the basis of its long history and contractuallyagreed supply relationship and conditions. It is, therefore, reviewed for recoverability at least annually using avaluation of the discounted cash flows. The goodwill arising from this transaction encompasses, most notably, theexpected potential for synergies and market entry, the workforce and all other intangible assets which could not beseparately identified.

56 Financial Reporting 2009 – Consolidated Financial StatementsShenzhen Mica GroupThe acquisition costs of TCHF 84 for the Shenzhen Mica Group, which were outstanding as at 31 December 2008,were paid in 2009.Bank Von Roll AG (formerly Von Roll Finanz AG)Following a resolution by the Extraordinary General Meeting on 19 January 2009, Von Roll Finanz AG was renamedBank von Roll AG. The Extraordinary General Meeting of the Shareholders of Bank Von Roll on 19 January 2009 approvedthe increase in the ordinary nominal share capital of CHF 17.9 million to CHF 18.0 million by issuing 35,800new registered shares each with a nominal value of CHF 500. Following this capital increase, shareholders inVon Roll Holding AG were offered shares in Bank Von Roll AG in proportion to their existing holding in Von RollHolding AG.Von Roll Holding AG waived its right to subscribe to the new registered shares; however, it has acquired a 3 % holdingin Bank Von Roll AG because of its holding of treasury shares. No significant effects on the result arose due to thedeconsolidation and there was a cash outflow of TCHF 62.Von Roll Isola Winding Systems GmbH i.L.The liquidation of Von Roll Isola Winding Systems GmbH was completed in December. The company was deletedfrom the commercial register on 22 December 2009. No significant effects on the result arose due to the deconsolidation.The cash outflow to the non-controlling interests amounted to TCHF 36.Von Roll Insulation & Composites Holding AGVon Roll Immobillien AG was renamed Von Roll Insulation & Composites Holding AG as per its entry in the commercialregister on 22 December 2009. At the same time there was a change in purpose to acquisition, disposal andmanagement of investments.SummaryThe following table provides a summary of the cash flows resulting from changes in the scope of consolidation inthe financial year:in CHF 1,000 2009Von Roll Transformers Ltd. 1,458Shenzhen Mica Group – 84Cash inflow from acquisitions 1,374Von Roll Finanz AG – 62Von Roll Winding Systems GmbH i.L. – 36Cash outflow from deconsolidation – 98

Financial Reporting 2009 – Consolidated Financial Statements 573.| Foreign currenciesThe following exchange rates were used for the translation into Swiss francs (CHF):2009 2008Average rates applied forthe consolidated income statement1 EUR 1.510 1.5881 USD 1.087 1.0831 GBP 1.696 2.0011 ILS 0.277 0.3071 INR 0.023 0.0251 BRL 0.548 0.6001 CNY 0.159 0.156Period end rates applied forthe consolidated balance sheet1 EUR 1.491 1.5021 USD 1.035 1.0581 GBP 1.654 1.5551 ILS 0.273 0.2711 INR 0.022 0.0221 BRL 0.589 0.4451 CNY 0.152 0.1544.| Gross salesIn the reporting year, gross sales changed compared with the previous year as follows:in CHF 1,000 2009 in % 2008 in %Due to volume and prices – 205,024 – 28.6 % 71,713 11.3 %Thereof copper – 64,352 – 9.0 % – 3,300 – 0.5 %Due to acquisition 67,342 9.4 % 46,359 7.3 %Due to currency changes – 24,249 – 3.4 % – 38,741 – 6.1 %Total – 161,931 – 22.6 % 79,331 12.4 %

58 Financial Reporting 2009 – Consolidated Financial Statements5.| Segment informationA breakdown by business segment in financial year 2009 is shown below:in CHF 1,000Von RollTotal net sales 570,144 364,658 113,440 92,046 –Thereof sales to other segments – 20,715 – 9,334 – 11,381 – –Net sales to third parties 549,429 355,324 102,059 92,046 –Operating expenses – 538,853 – 338,053 – 105,591 – 82,571 – 12,638EBITDA 10,576 17,271 – 3,532 9,475 – 12,638Depreciation – 15,220 – 10,081 – 3,682 – 972 – 485Amortization – 3,847 – 2,366 – 29 – 1,420 – 32EBIT – 8,491 4,824 – 7, 243 7,083 – 13,155Financial result – 3,813Income tax 962Net income for the period – 11,342Von RollInsulationVon RollCompositesVon RollTransformersOtheractivitiesCapital expenditures 21,224 9,571 3,624 4,653 3,376Impairment – – – – –Number of employees 2,953 1,365 1,288 246 54Assets 520,251 235,157 82,205 125,680 77,209Liabilities 147,556 65,458 26,676 29,013 26,409A breakdown by business segment in 2008 (restated) is shown below:in CHF 1,000Von RollVon RollInsulationVon RollCompositesVon RollTransformersOtheractivitiesTotal net sales 738,375 538,695 176,607 23,073 –Thereof sales to other segments – 28,320 – 12,466 – 15,854 – –Net sales to third parties 710,055 526,229 160,753 23,073 –Operating expenses – 647,340 – 468,454 – 140,402 – 21,324 – 17,160EBITDA 62,715 57,775 20,350 1,749 – 17,160Depreciation – 10,256 – 6,466 – 3,263 – 232 – 295Amortization – 2,389 – 1,982 – 27 – 380 –EBIT 50,070 49,327 17,060 1,137 – 17,455Financial result – 8,918Income tax – 11,397Net income for the period 29,755Capital expenditures 27,046 13,958 9,508 507 3,073Reversal of impairment 2,599 2,599 – – –Number of employees 3,448 1,527 1,628 235 58Assets 607,227 273,930 97,996 121,475 113,826Liabilities 185,971 90,128 34,280 28,939 32,624

Financial Reporting 2009 – Consolidated Financial Statements 59Reportable business segments are determined on the basis of the management approach. External segmentreporting is then carried out on the basis of the internal Group organisation and management structure as well asinternal financial reporting to the chief operating decision maker. At Von Roll, this position is held by the Board ofDirectors of Von Roll Holding AG.Description of segmentsThe operating activities of Von Roll are divided into the Von Roll Insulation, Von Roll Composites and Von Roll Transformersbusiness units. These units are organised in accordance with business applications for clients and form thebasis of Von Roll’s primary segment information.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 and cable protection materials.Von Roll Transformers – production and supply of energy transmission and distribution solutions.For further information on the business units, please refer to the image section of this Annual Report.Other activities include income and expense of companies not categorised as part of the operating business, andnet income from investment properties and holding companies.The table below shows a breakdown of Group net sales by geographical market, irrespective of the origin of thegoods and services:Geographical information by location of customerin CHF 1,000 2009 in % 2008 in % VariationEMEA 291,892 53 % 394,333 55 % – 26 %America 149,758 27 % 176,426 25 % – 15 %Asia 107,779 20 % 139,296 20 % – 23 %Von Roll 549,429 100 % 710,055 100 % – 23 %Information on gross sales generated with external clients in Switzerland is not available and the costs of compilingit would be excessively high.Information on major clientsThere is no significant dependency on one client either within a segment or across segments. Von Roll does notgenerate more than 10 % of Group turnover with any one client.The following table shows a geographical breakdown by location of assets:Geographical information by location of assetsin CHF 1,000 2009Von Roll EMEA America Asia2008(restated) 20092008(restated) 20092008(restated) 2009 2008Net sales to third parties 549,429 710,055 364,727 443,197 101,462 158,948 83,240 107,910Assets 520,251 608,419 338,158 426,900 90,943 91,127 91,150 90,392Capital expenditures 21,224 27,046 17,240 18,757 3,236 2,562 748 5,727Number of employees 2,953 3,448 1,366 1,450 380 438 1,207 1,560Allocation of goodwillThe goodwill allocated to the Insulation segment amounts to TCHF 15,345 (2008: TCHF 15,641) and the goodwill ofthe Composites segment to TCHF 2,566 (2008: 2,482). Goodwill to the amount of TCHF 22,020 (2008: TCHF 20,744)is allocated to the Transformer segment, comprising solely of Von Roll Transformer Ltd. The Transformer segmentalso includes intangible assets with an indefinite life. Both items are described in Note 2 to Changes in the Scope ofConsolidation.

60 Financial Reporting 2009 – Consolidated Financial StatementsThe method applied for the impairment tests is described in Note 19 relating to goodwill, Note 20 relating to immaterialassets and Note 18 relating to property, plant and equipment. The discount rates applied for the discountedcash flow method for the Insulation segment vary between 6.9 % and 11.4 %. Discount rates of between 6.9 % and11.4 % are applied for the Composites segment. In the Transformer segment, the discount rate is 8.4 %.6.| Expense by type and functionin CHF 1,000 20092008(restated)Expense by typeRaw materials and consumables – 232,829 – 334,287Energy cost – 20,098 – 23,753Employee benefit expenses (Note 7) – 148,572 – 153,502Regular depreciation oftangible assets (Notes 9 and 18) – 15,077 – 12,742Changes in inventory – 9,983 – 5,684Other expenses – 121,333 – 128,741Total – 547,892 – 658,709Expense by functionCost of goods sold – 441,490 – 545,392Business development – 12,226 – 11,872Sales and distribution expenses – 35,484 – 47,134Administrative expenses – 58,692 – 54,311Total – 547,892 – 658,7097.| Employee benefit expensesin CHF 1,000 20092008(restated)Wages and salaries – 117,506 – 122,439Post-employment benefit costs (Note 38) – 5,420 – 4,539Other social security costs – 25,646 – 26,524Total – 148,572 – 153,502In the consolidated income statement, employee benefit expenses are included in the corresponding functionalcosts.

Financial Reporting 2009 – Consolidated Financial Statements 618.| Number of employeesNumber 2009 2008Production 2,421 2,821Research and development 54 71Sales and distribution 240 302Administration 238 254Employees at year end 2,953 3,448Average for the year 3,109 2,8759.| Depreciation, amortisation and impairmentin CHF 1,000 2009 2008Land and buildings (Note 6 and 18) – 2,538 – 2,247Technical installations and machinery (Note 6 and 18) – 11,232 – 8,979Plant and office equipment (Note 6 and 18) – 1,307 – 1,516Total regular depreciation on PPE – 15,077 – 12,742Investment property (Note 12 and 21) – 143 – 112Intangible assets (Note 11 and 20) – 3,847 – 2,389Regular depreciation – 19,067 – 15, 243Land and buildings (Note 18) – 932Technical installations and machinery (Note 18) – 1,609Plant and office equipment (Note 18) – 58Reversal of impairment – 2,599Total depreciation and reversal of impairment – 19,067 – 12,644In financial year 2009, there were no impairments in addition to regular depreciation.10.| Restructuring costsThe objective of the restructuring programme was to adjust business operations to the altered framework conditionsthat have emerged in the wake of the global economic crisis and increase the competitiveness of Von Roll.By streamlining processes and structures, merging separate production areas and eliminating unprofitable productlines, costs for restructuring in 2009 amounted to TCHF 8,621.11.| Other operating expensein CHF 1,000 2009 2008Loss from the sale of non-current assets – – 1 1Amortization on intangible assets (Note 9 and 20) – 3,847 – 2,389Other operating expense – 3,969 – 9,629Total – 7,816 – 12,029In essence, other operating expense comprises expenses in connection with legal disputes and consulting servicesthat were not incurred in connection with Von Roll’s core business.

62 Financial Reporting 2009 – Consolidated Financial Statements12.| Income / loss from investment propertyin CHF 1,000 2009 2008Income from investment property 2,704 1,621Expense for investment property – 659 – 901Depreciation on investment property (Notes 9 and 21) – 143 – 112Result from the sale of investment property – – 198Total 1,902 41013.| Other operating incomein CHF 1,000 2009 2008Profit from the sale of non-current assets 85 –Reversal of impairment – 2,599Other operating income 4,422 7,744Total 4,507 10,343In essence, other operating income contains licence fees, income from insurance claims, income from leasing itemsof equipment, and income from the release of provisions and income from other services which was not generatedin connection with Von Roll’s core business.14.| Financial incomein CHF 1,000 2009 2008Interest received 417 4,762Gain from financial hedging activities 200 –Foreign exchange gains 13,856 8,840Total 14,473 13,60215.| Financial expensein CHF 1,000 20092008(restated)Interest expense on bank debts – 188 – 1,206Interest expense on pension funds (at balance sheet) – 926 – 909Bank charges – 1,191 – 703Interest expense on loans and other financial liabilities – 150 – 474Foreign exchange losses – 13,502 – 18,369Loss from derivatives – 1,664 –Loss from financial hedging activities – 261 – 852Loss from operative hedging activities – 404 –Value adjustments on financial assets and securities – – 7Total – 18, 286 – 22,520The loss from operating hedging transactions contains the ineffective part of hedging transactions for the copperstock. As of 31 December 2009, there are no outstanding hedging activities.To increase transparency, bank charges are shown separately from interest expense on bank debts for the financialyear 2009. The previous year was restated accordingly.

Financial Reporting 2009 – Consolidated Financial Statements 6316.| Income taxin CHF 1,000 20092008(restated)Profit before tax – 12,304 41,152Average tax rate 10.5 % 35.9 %Expected tax income/expense 1,297 – 14,772Non-tax-deductible expenses – 2,642 – 5,368Non-taxable income 1,058 2,144Increase in unrecognised tax losses – 1,731 – 438Utilisation of unrecognised tax losses 1,215 6,687Capitalisation of expected usage of tax loss carry forward 4,255 1,048Valuation allowance on deferred tax assets – 2,541 – 1,001Taxes relating to prior periods and other items 51 303Effective tax income/expense 962 – 11,397Tax income/expense is as follows:Current tax – 1,861 – 5,747Deferred tax 2,823 – 5,650Total tax income/expense 962 – 11,397Taxes paid 2,675 3,942Variations in the average tax rate depend on the breakdown of results among the various entities and tax jurisdictions.The average tax rate decreased in comparison with the previous year, on the one hand because of changesin the results reported by the various subsidiaries, and on the other hand because no or not all tax loss carryforwardswere capitalised in certain companies.Based on the expected future earnings in certain companies, further tax loss carryforwards of TCHF 4,255(2008: TCHF 1,048) were capitalised.Deferred taxes arising from timing differences between the tax base and their carrying amounts consisted of thefollowing items:in CHF 1,000 2009 2009Assets Liabilities Assets Liabilities2008(restated) 2008Current assets 2,649 327 1,203 765Non-current assets 1,909 9,101 2,277 7,658Short-term liabilities 1,981 605 2,321 198Long-term liabilities 3,438 26 3,418 63Tax loss 31,502 – 30,793 –Valuation allowance on deferred tax assetsand tax losses – 19,784 – – 21,738 –Deferred taxes (gross) 21,695 10,059 18,274 8,684

64 Financial Reporting 2009 – Consolidated Financial StatementsThe above amounts are included in the following balance sheet items:in CHF 1,000 20092008(restated)Deferred tax assets 20,787 18,734Deferred tax liabilities – 9,151 – 9,144Net deferred tax assets 11,636 9,590Current tax is included in the balance sheet as follows:in CHF 1,000 2009 2008Taxes receivables 2,396 564Taxes payable – 1,310 – 3,409Net current tax receivable (+) / payable (–) 1,086 – 2,845Movements in tax losses carried forward are as follows:in CHF 1,000 2009 2008At 1 January 256,593 472,195Translation effects 455 – 10,262Changes in the scope of consolidation – 368Adjustments of previous year‘s values 5,314 6Increase in tax losses 11,990 1,514Tax losses expired – 101,356 – 12,298Capitalized and provided tax losses utilized – 8,911 – 194,930Tax losses carried forward at 31 December 164,085 256,593Expiry dates for tax losses carried forward are as follows:in CHF 1,000 2009 2008In 1 year 60,492 101,356In 2 years 35,619 60,492In 3 years – 39,479In 4 years and more 67,974 55,266Total 164,085 256,593Deferred tax assets for the carryforward of unused tax losses are recognised to the extent that it is probable thatfuture taxable profits will be available. Cumulative tax losses of TCHF 68,766 (2008: TCHF 161,842) relate to tax lossesin tax privileged holding companies.

Financial Reporting 2009 – Consolidated Financial Statements 6517.| Earnings per shareBasic earnings per shareNet income attributable to shareholders in CHF 1,000 – 10,864 28,482Average number of shares outstanding in shares 178,362,251 182,534,818Basic earnings per share in CHF – 0.061 0.15620092008(restated)Diluted earnings per shareNet income attributable to shareholders in CHF 1,000 – 10,864 28,482Average number of diluted shares outstanding in shares 178,362,251 182,534,818Diluted earnings per share in CHF – 0.061 0.156The calculation of diluted earnings per share is based on the following data:Average number of shares outstanding in shares 178,362,251 182,534,818Effect of dilutive share options in share-equivalent – –Average number of dilutive shares outstanding in shares 178,362,251 182,534,818

66 Financial Reporting 2009 – Consolidated Financial Statements18.| Property, plant and equipmentin CHF 1,000LandandbuildingsTechnicalinstallationand machineryPlant andofficeequipmentCostBalance at 1 January 2008 121,710 319,524 34,023 475,257Additions 710 21,083 2,716 24,509Disposals 85 – 12,824 – 4,027 – 16,766Changes in the scope of consolidation (Note 2) 7,376 60,419 7,145 74,940Currency translation – 7,368 – 23,972 – 4,814 – 36,154Reclassifications 1,926 – 2,550 151 – 473Balance at 31 December 2008 124,439 361,680 35,194 521,313TotalBalance at 1 January 2009 124,439 361,680 35,194 521,313Additions 1,323 16,480 621 18,424Disposals – 865 – 5,453 – 4,004 – 10,322Changes in the scope of consolidation (Note 2) – – 513 – 6 – 519Currency translation 240 1,582 551 2,373Reclassifications 2,649 – 3,783 241 – 893Balance at 31 December 2009 127,786 369,993 32,597 530,376Accumulated depreciationBalance at 1 January 2008 – 100,843 – 260,102 – 30,078 – 391,023Depreciation (Note 9) – 2,247 – 8,979 – 1,516 – 12,742Disposals – 38 12,556 3,983 16,501Impairments 932 1,609 58 2,599Changes in the scope of consolidation (Note 2) – 4,100 – 54,374 – 6,906 – 65,380Currency translation 5,366 19,351 4,302 29,019Reclassifications – 62 165 – 4 99Balance at 31 December 2008 – 100,992 – 289,774 – 30,161 – 420,927Balance at 1 January 2009 – 100,992 – 289,774 – 30,161 – 420,927Depreciation (Note 9) – 2,538 – 11,232 – 1,307 – 15,077Disposals 860 5,377 3,875 10,112Changes in the scope of consolidation (Note 2) – 81 6 87Currency translation – 423 – 1,134 – 487 – 2,044Reclassifications – 744 – 6 738Balance at 31 December 2009 – 103,093 – 295,938 – 28,080 – 427,111Net carrying amounts at 31 December 2008 23,447 71,906 5,033 100,386Net carrying amounts at 31 December 2009 24,693 74,055 4,517 103,265Technical installations and equipment includes an amount of TCHF 7,065 (2008: TCHF 12,125) relating to property,plant and equipment under construction.The changes in the scope of consolidation reflect the liquidation of Von Roll Isola Winding Systems GmbH i.L. andthe deconsolidation of Von Roll Finanz AG.Property, plant and equipment is reviewed for impairment at least annually. The impairment tests have been determinedusing the discounted cash flow method applying discount rates of 6.9 % to 11.4 %. The management estimatesdiscount rates that reflect current market assessments of the time value of money and the risks specific to the cashgeneratingunits.

Financial Reporting 2009 – Consolidated Financial Statements 67Von Roll prepares cash flow forecasts derived from the most recent financial budget 2010 approved by the managementand the Board of Directors and extrapolates cash flows for 2011 to 2013 and following years based on the anticipatedgrowth rates for the business model. In setting the planning parameters, sufficient allowance was made forgrowth based on corporate targets and the difficult global economic conditions.19.| Goodwillin CHF 1,000Balance at 1 January 2008 10,686Additions 58,986Restatement purchase price allocation – 24,243Currency translation – 6,562Balance at 31 December 2008 (restated) 38,867Balance at 1 January 2009 38,867Additions 168Currency translation 897Balance at 31 December 2009 39,932The reduction in goodwill in financial year 2008 reflects the completion of the process to determine the fair valuesof identifiable assets, liabilities and contingent liabilities from the acquisition of Von Roll Transformers Ltd. and isdescribed in more detail in Note 2. The increase in financial year 2009 contains acquisition costs that can be allocatedto the purchase of Von Roll Transformers Ltd.In accordance with IFRS 3, goodwill is tested annually for impairment.The impairment tests have been determined using the discounted cash flow model, applying discount rates of 6.9 %to 11.4 %. The management estimates discount rates using rates that reflect current market assessments of the timevalue of money and the risks specific to the cash-generating units. An increase in the discount rates of 1 % would notlead to any further impairments.Von Roll prepares cash flow forecasts derived from the 2010 financial budget approved by the management and theBoard of Directors and extrapolates cash flows for 2011 to 2013 and the following years based on anticipated growthrates for the business model. In setting the planning parameters, sufficient allowance was made for growth basedon corporate targets and the difficult global economic conditions.Impairment tests in 2009 did not show any need for impairments. Goodwill is mainly allocated to John C. DolphCompany, Von Roll Austral Inc., Pearl Insulations Pvt. Ltd, Pearl Metal Products (Bangalore) Pvt. Ltd, the ShenzhenMica Group companies and Von Roll Transformers Ltd.

68 Financial Reporting 2009 – Consolidated Financial Statements20.| Intangible assetsin CHF 1,000Trademarks,licenses andsimilar rightsOtherintangibleassetsCostBalance at 1 January 2008 9,095 15,364 24,459Additions 1,088 1,449 2,537Disposals – 198 – 248 – 446Changes in the scope of consolidation 255 39,499 39,754Currency translation – 7 – 4,841 – 4,848Reclassifications – 56 – – 56Balance at 31 December 2008 (restated) 10,177 51,223 61,400TotalBalance at 1 January 2009 10,177 51,223 61,400Additions 2,804 10 2,814Disposals – – 86 – 86Changes in the scope of consolidation (Note 2) – – 1,366 – 1,366Currency translation – 10 10 –Balance at 31 December 2009 12,971 49,791 62,762Accumulated depreciationBalance at 1 January 2008 – 3,143 – 7,287 – 10,430Amortisation (Notes 9 and 11) – 1,259 – 1,130 – 2,389Disposals 22 248 270Currency translation 17 653 670Reclassifications 27 – 27Balance at 31 December 2008 – 4,336 – 7,516 – 11,852Balance at 1 January 2009 – 4,336 – 7,516 – 11,852Amortisation (Notes 9 and 11) – 1,440 – 2,407 – 3,847Disposals – 86 86Currency translation 3 186 189Balance at 31 December 2009 – 5,773 – 9,651 – 15,424Net carrying amounts at 31 December 2008 5,841 43,707 49,548Net carrying amounts at 31 December 2009 7,198 40,140 47,338In financial year 2009, internally generated intangible assets to the amount of TCHF 1,082 (2008: TCHF 0) werecapitalised.Intangible assets are reviewed for impairment at least annually. The impairment tests have been determined usingthe discounted cash flow method, applying discount rates of 6.9 % to 11.4 %. The management estimates discountrates using rates that reflect current market assessments of the time value of money and the risks specific to thecash-generating units.Von Roll prepares cash flow forecasts derived from the 2010 financial budget approved by the management and theBoard of Directors and extrapolates cash flows for 2011 to 2013 and the following years based on anticipated growthrates for the business model. In setting the planning parameters, sufficient allowance was made for growth basedon corporate targets and the difficult global economic conditions.In 2009, impairment tests did not give rise to any depreciation.

Financial Reporting 2009 – Consolidated Financial Statements 6921.| Investment propertyin CHF 1,000CostBalance at 1 January 2008 39,159Disposals – 946Reclassifications 211Balance at 31 December 2008 38,424Balance at 1 January 2009 38,424Reclassifications 198Balance at 31 December 2009 38,622Accumulated depreciationBalance at 1 January 2008 – 33,371Depreciation (Note 9) – 112Reclassifications – 52Balance at 31 December 2008 – 33,534Balance at 1 January 2009 – 33,534Depreciation (Note 9) – 143Reclassifications – 43Balance at 31 December 2009 – 33,720Net carrying amounts at 31 December 2008 4,890Net carrying amounts at 31 December 2009 4,902Total fair values of investment property amount to TCHF 23,401 (2008: TCHF 18,595) before tax. Fair values for buildingshave been determined using the discounted cash flow model, applying discount rates on rental revenuesranging from 5.5 % to 9.5 %. Fair values for unimproved land (held for capital appreciation) have been determined onthe basis of current prices on active markets. Fair values are periodically determined by independent and qualifiedexperts. The latest valuations were performed in December 2009.

70 Financial Reporting 2009 – Consolidated Financial Statements22.| Financial assetsin CHF 1,000Balance at 1 January 2008 1,833Additions 839Disposals/repayments – 213Value adjustments 23Changes in consolidation scope 360Translation effects – 409Other changes – 45Balance at 31 December 2008 2,388Of which short-term –Of which long-term 2,388Balance at 1 January 2009 2,388Additions 1,428Disposals/repayments – 439Translation effects 264Balance at 31 December 2009 3,641Of which short-term 170Of which long-term 3,471The short-term financial assets contain derivative financial instruments. The long-term financial assets include variousloans. A 20 % holding in Transalpina GmbH, Vienna is also included in financial assets. This is not shown separatelyin the balance sheet as it is considered immaterial. In 2009 and 2008, no earnings were received from TransalpinaGmbH as an associated company.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 tothe observability of valuation bases.» Level 1 Valuations at fair value are based on quoted prices (unadjusted) in an active market for identical assetsand liabilities.» Level 2 Valuations at fair value are based on data other than the prices quoted in level 1. The factors used for thevaluation 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 thatare based upon non-observable market data (unobservable inputs).The derivative financial instruments are the only financial assets held in the Von Roll Group that are valued at fairvalue. In the fair value hierarchy within the meaning of IFRS 7 they are to be allocated to Level 2.

Financial Reporting 2009 – Consolidated Financial Statements 7123.| List of subsidiariesDetails of Von Roll’s significant consolidated subsidiaries as of December 31, 2009 are as follows:Name and registered officeEMEAPercentage ofshareholdingCountrySharecapitalcurrencyShare capitalamount (in 1,000)Von Roll Schweiz AG, Breitenbach 99.99 % CH CHF 16,000 Prod. and salesVon Roll Transformers Ltd., Ramat Ha‘Sharon 100.00 % IL ILS 7,200 Prod. and salesVon Roll Management AG, Au 100.00 % CH CHF 1,500 ManagementPrincipalactivityVon Roll Insulation & Composites Holding AG,Breitenbach 1 100.00 % CH CHF 1,000 HoldingVon Roll Solar AG, Breitenbach 51.00 % CH CHF 100 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, Munich 100.00 % DE EUR 25 ManagementVon 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, Bradford 2 100.00 % GB GBP 4,000 Prod. and salesVon Roll Italia SpA, Ghisalba 100.00 % IT EUR 1,300 Prod. and salesOOO Von Roll, Moscow 100.00 % RU RUB 10 SalesAmericasVon 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/NewJersey 100.00 % US USD 434 Prod. and salesVon Roll USA Holding, Inc., Wilmington/Delaware 100.00 % US USD 0 HoldingAsiaPearl Insulations Pvt. Ltd, Bangalore 100.00 % IN INR 23,126 Prod. and salesPearl Metal Products (Bangalore) Pvt. Ltd,Bangalore 100.00 % IN INR 26,828 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 salesShenzhen Shengbida Electrical Material Co., Ltd.,Shenzhen 100.00 % CN CNY 2,000 Prod. and salesTongcheng Xinyu Mica Products Co., Ltd.,Tongcheng 100.00 % CN CNY 3,500 Prod. and sales1Name and purpose of the Von Roll Immobilien AG changed as of December 22, 20092Of which TGBP 3,750 is paid-in

72 Financial Reporting 2009 – Consolidated Financial Statements24.| LeasingThe carrying amounts of leased property, plant and equipment (financial leases) by category as of December 31 areas follows:in CHF 1,000 2009 2008Technical installations and machinery – 374Plant and office equipment – 86Total net carrying amount of leased assets – 460The maturities of the obligations for financial lease agreements and non-cancellable operating lease agreements asof December 31 are as follows:in CHF 1,000 2009 2008Financial LeasingWithin 1 year – 34In 2 to 5 years – –More than 5 years – –Net present value of future minimum lease payments – 34Interest component – –Total future minimum lease payments – 34Operating LeasingWithin 1 year 3,289 4,609In 2 to 5 years 9,233 12,726More than 5 years 3,907 4,788Total lease commitments of future minimum lease payments 16,429 22,123Operating lease agreements relate mainly to office and facility rental commitments, cars, machinery and equipmentrentals.An amount of TCHF 2,337 (2008: TCHF 5,278), relating exclusively to operating lease payments, has been expensedto the income statement.

Financial Reporting 2009 – Consolidated Financial Statements 7325.| Inventoriesin CHF 1,000 2009 2008Raw materials and supplies 37,128 46,667Work in progress and semi-finished goods 24,091 30,051Finished goods 33,051 42,615Amounts due from customers under construction contracts 13,215 9,844Inventory obsolescence provision – 8,246 – 7,124Total 99,239 122,053In the reporting period, inventories amounting to TCHF 3,697 (2008: TCHF 4,108) were valued at their lower netrealisable value.The management estimated the need for the inventory obsolescence provision based on inventory turnover.26.| Construction contractsin CHF 1,000 2009 2008Construction costs incurred plus recognised profits less recognised losses to date 22,560 10,398Less progress billings – 9,345 – 965Total 13,215 9,434Recognised and included in the financial statements as amounts due:From customers under construction contracts (note 25) 13,215 9,844To customers under construction contracts (note 34) – – 410Total 13,215 9,434The construction contracts are attributable to Von Roll Transformer Ltd., which was acquired on 25 September, 2008.As of 31 December 2009, clients’ security deposits for construction contracts stood at TCHF 0 (2008: TCHF 0).Advance payments by clients for construction contracts amounted to TCHF 0 (2008: TCHF 410).

74 Financial Reporting 2009 – Consolidated Financial Statements27.| Trade accounts receivablein CHF 1,000 2009 2008Receivables (gross) 93,041 118,010Bad debt allowance – 3,021 – 1,473Total 90,020 116,537The bad debt allowances are based on specific allowances for bad debts and actual experience regarding theageing structure at Von Roll.The following table shows movements in bad debt allowances:in CHF 1,000 2009 2008At 1 January – 1,473 – 1,526Currency translation adjustments 10 138Changes in the scope of consolidation – – 478Bad debt losses – 1,660 – 261Usage of bad debt allowance 215 534Addition (–) / reversal (+) of bad debt allowance – 113 120Bad debt allowance at 31 December – 3,021 – 1,473The book values of trade accounts receivable are equal to the maximum settlement risk.The trade accounts receivable have the following ageing structure:in CHF 1,000 2009 2008Not past due 73,970 91,598Less than 1 month past due 10,361 16,550Between 1 month and 3 months past due 4,171 6,313Between 3 months and 12 months past due 2,979 2,946More than 1 year past due 1,560 603Bad debt allowance – 3,021 – 1,473Total 90,020 116,537The trade accounts receivable and financial assets which are not past due have the following due dates:in CHF 1,000 2009 2008Accounts receivable, not past due 73,970 91,598Financial assets (Note 22) 3,641 2,388Less investment in associate – 36 – 36Total 77,575 93,950Thereof due in:Less than 1 month 43,356 54,462Between 1 month and 3 months 29,443 36,439Between 3 months and 12 months 1,324 1,037More than 1 year 3,452 2,012Total 77,575 93,950

Financial Reporting 2009 – Consolidated Financial Statements 75Trade accounts receivable include amounts denominated in the following major currencies:in CHF 1,000 2009 2008CHF 3,031 4,185EUR 38,427 58,432GBP 3,009 4,049USD 22,985 24,786CNY 9,549 10,179INR 7,977 6,918ILS 3,260 7,200Other currencies 1,782 788Total 90,020 116,53728.| Other accounts receivable and prepaid expensesin CHF 1,000 2009 2008Receivables from employees 352 444VAT receivables 11,108 9,037Downpayments to supplier 1,888 15,971Other receivables 9,765 10,937Prepaid expense and deferred income 5,327 6,514Total 28,440 42,90329.| Cash and cash equivalentsin CHF 1,000 2009 2008CHF 7,936 27,691EUR 14,339 43,817GBP 1,035 775USD 22,525 18,384Other 16,581 9,802Total 62,416 100,469Cash and cash equivalents include cash held at banks and other financial institutions. They bear interest at between0 % and 8.15 %. Cash is only deposited with financial institutions whose credit rating is outstanding.Cash and cash equivalents held in USD include restricted cash. This sum amounts to 10 % of the maximum contractvolume (see Note 1 – Foreign Exchange Risk). The restriction on disposal can be lifted at any time without due notice.

76 Financial Reporting 2009 – Consolidated Financial Statements30.| Share capitalShare capitalThe share capital as of 31 December 2009 consists of 184,778,889 bearer shares, unchanged from 31 December2008. The par value per share is CHF 0.10. No authorised or conditional capital is outstanding.Treasury sharesAs of 31 December 2009 Von Roll held 7,038,464 (2008: 6,261,249) treasury shares, which were acquired for anaverage stock price of CHF 10.63 (2008: CHF 11.19). This represents a shareholding of 3.8 % (2008: 3.4 %) of the sharecapital issued.Numberof shares in CHF 1,000Numberof shares in CHF 1,000Share Capital 2009 2009 2008 2008At 1 January 184,778,889 18,479 184,778,889 18,479At 31 December 184,778,889 18,479 184,778,889 18,479Treasury sharesAt 1 January 6,261,249 69,446 1,080,000 8,673Purchase/sale of treasury shares 777,215 2,846 5,181,249 60,773At 31 December 7,038,464 72,291 6,261,249 69,446Composition of the major shareholdersThe composition of the major shareholders is presented in the notes to the financial statements of Von Roll HoldingAG.Stock option plan for the Executive ManagementIn 2007, a stock option plan was introduced for the Executive Management. Non-transferable stock options may beissued to the Executive Management each year; however, there is no obligation to grant any options. The optionsmay be exercised at any time for a period of three years for a price determined at the grant date, if at the timeof exercise, the executive officer is still employed by the company. A maximum of 50 % of the options granted maybe exercised each year. The options can only be settled in shares (equity settlement). The potential commitmentto provide shares for options will be covered solely by the purchase of shares on the stock exchange.a) 2007 TrancheIn 2007, 500,000 options to acquire 500,000 shares were granted to the Executive Management. The exercise pricewas fixed at CHF 20. The issued options may be exercised from the grant date until 31 December 2010; however, only50 % may be exercised in 2007 and 2008, and 50 % in 2009.The options granted at that time are valued on the basis of the Black-Scholes option pricing model and have anaverage fair value of CHF 1.05. The volatility rate of 46 % is based on historically observed stock prices. The risk-freeinterest rate of 3.25 % is based on Swiss government bonds with similar maturities. The underlying dividend yield isexpected to be 1.06 %.b) 2009 TrancheIn the reporting period, options to acquire 500,000 shares were granted to the Executive Management. The exerciseprice was fixed at CHF 12. The issued options may be exercised from the grant date until 31 December 2012; however,only 50 % may be exercised in 2009 and 2010, and 50 % in 2011.The options granted are valued on the basis of the Black-Scholes option pricing model and have an average fairvalue of CHF 0.95. The volatility rate of 43 % is based on historically observed stock prices. The risk-free interest rateof 2.32 % is based on Swiss government bonds with similar maturities. The underlying dividend yield is expected tobe 1.56 %.

Financial Reporting 2009 – Consolidated Financial Statements 77In the reporting period, corresponding personnel expenses were recognised to the amount of TCHF 350 (2008:TCHF 194). Social security contributions related to options are chargeable only as of the exercise date. Taxes are tobe borne by the option holder.No options were exercised in the reporting period, neither have any lapsed.Stock option plan for senior and middle managementIn 2008, a stock option plan was introduced for senior and middle management. Non-transferable stock options maybe issued to these managers each year; however, there is no obligation to grant any options. The options may beexercised 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 is still employed by the company.The corresponding personnel expenses recognised in 2009 amount to TCHF 785 (2008: TCHF 341). These expensesare accordingly offset in equity. Social security contributions related to options are chargeable only as of the exercisedate. Taxes are to be borne by the option holder.a) 2008 TrancheThe first 33⅓ % of the options granted may be exercised from 1 February 2009. An additional 33⅓ % may be exercisedon the same date in both 2010 and 2011. The options can only be settled in shares (equity settlement). The potentialcommitment to provide shares for options will be covered solely by the purchase of shares on the stock exchange.In 2008, 475,000 options to acquire 475,000 shares were granted to members of senior and middle management.The exercise price was fixed at CHF 10. The options issued under this tranche may be exercised from the date ofgrant until 31 January 2013.The options granted are valued on the basis of the Black-Scholes option pricing model and have an average fairvalue of CHF 2.62. The volatility rate of 52 % is based on historically observed stock prices. The risk-free interest rateof 2.82 % is based on Swiss government bonds with similar maturities. An underlying dividend yield of 1.17 % andfluctuation of 10 % per year are expected.No options were exercised in the reporting period. As of 31 December 2009, 141,000 options of the tranche issuedin 2008 had lapsed.b) 2009 TrancheThe first 33⅓ % of the options granted may be exercised from 1 February 2010. An additional 33⅓ % may be exercisedon the same date in both 2011 and 2012. The options can only be settled in shares (equity settlement). The potentialcommitment to provide shares for options will be covered solely by the purchase of shares on the stock exchange.In 2009, 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 options issued under this tranche may be exercised from the date ofgrant until 31 January 2014.The options granted are valued on the basis of the Black-Scholes option pricing model and have an average fairvalue of CHF 1.25. The volatility rate of 43 % is based on historically observed stock prices. The risk-free interest rateof 2.32 % is based on Swiss government bonds with similar maturities. An underlying dividend yield of 1.56 % andfluctuation of 10 % per year are expected.No options were exercised in the reporting period. As of 31 December 2009, 100,200 options of the tranche issuedin 2009 had lapsed.

78 Financial Reporting 2009 – Consolidated Financial Statements31.| Financial liabilitiesFair ValuesBook valuesin CHF 1,000 2009 2008 2009 2008Short-term bank debts 241 1,799 241 1,799Short-term leasing liabilities – 54 – 54Short-term portion of loans 413 18 413 18Derivatives 575 – 575 –Short-term financial liabilities 1,229 1,871 1,229 1,871Long-term bank debts – 380 – 381Loans and other financial liabilities 87 232 87 232Long-term financial liabilities 87 612 87 613Financial liabilities 1,316 2,483 1,316 2,484Of which secured (Note 37)Bank debts 232 1,413Loans 395 763On July 11, 2007, Von Roll signed a CHF 100 million syndicated loan agreement with Credit Suisse as prime underwriterin order to optimise the cost of financing. The loan includes as a financial covenant a leverage ratio on theoperating income and equity. Both were met as of December 31, 2009. The syndicated loan was not drawn down onthe balance sheet date.The derivative financial instruments as of the balance sheet date are open transactions which are automaticallyclosed in the event of depreciation of more than 4 %.The following table shows the due dates for the company’s financial liabilities compared to the previous year:in CHF 1,000 2009 2008Within 1 year 1,229 1,871In 2 years 17 526In 3 years 18 18In 4 years 18 18In 5 years 18 18More than 5 years 16 33Total 1,316 2,484On 31 December 2009, Von Roll had TCHF 105,130 (2008: TCHF 105,293) in unused credit facilities available. Thesemainly relate to the syndicated loan lent to Von Roll Holding AG.Financial liabilities were denominated in the following currencies as of December 31, 2009:in 1,000 CHF EUR Other TotalBank debts – 3 238 241Loans and other financial liabilities – 500 – 500Derivatives – – 575 575Total – 503 813 1,316Financial liabilities were denominated in the following currencies as of December 31, 2008:in 1,000 CHF EUR Other TotalBank debts – 768 1,413 2,181Loans and other financial liabilities 127 122 – 249Derivatives 54 – – 54Total 181 890 1,413 2,484

Financial Reporting 2009 – Consolidated Financial Statements 79Most of the financial liabilities are outstanding in the local currency of the subsidiaries. Risks from currency translationoccur only if the transactions of a subsidiary are denominated in a different currency from the presentationcurrency CHF or in a currency other than the respective local currency. To manage the foreign exchange risk fromfuture commercial transactions, Von Roll uses forward contracts whenever necessary.Interest rates for financial year 2009 were as follows:Average interest rate in % CHF EUROthercurrenciesBank debts – – 12.3 %Loans and other financial liabilities – 2.0 % –Interest rates for financial year 2008 were as follows:Average interest rate in % CHF EUROthercurrenciesBank debts – 6.1 % –Loans and other financial liabilities 3.0 % – –Borrowings issued at variable rates expose Von Roll to interest rate risks and may result in higher interest rate expensein future. Financial liabilities with a fixed interest rate include the risk of fluctuations in value. The correspondingfair values are shown above. The financial liabilities of Von Roll are almost entirely based on variable interestrates and are not hedged. As a result of the Group’s positive net cash position, the interest rate risk is immaterial.We have therefore not provided a sensitivity analysis.32.| Provisionsin CHF 1,000StaffrelatedEnvironmentalrestorationContingency& commitmentsBalance at 1 January 2008 (published) 2,067 8,566 2,478 2,042 691 1,223 17,067Restatement 1 709 – – – – – 709Balance at 1 January 2008 (restated) 2,776 8,566 2,478 2,042 691 1,223 17,776Additions 537 – 322 855 1 47 1,762Unused – – 462 – 1,492 – 166 – 197 – 140 – 2,457Utilized – 842 – 368 – 319 – 1,172 – 316 – 233 – 3,250Currency translation – 181 – 38 – 42 – 136 – 2 – 65 – 464Balance at 31 December 2008 (restated) 2,290 7,698 947 1,423 177 832 13,367Of which short-term – – 290 539 177 170 1,176Of which long-term 2,290 7,698 657 884 – 662 12,191LegalclaimsRestructuringOther TotalBalance at 1 January 2009 2,290 7,698 947 1,423 177 832 13,367Additions 379 – 1,242 671 8,621 99 11,012Unused – – – 12 – 122 – – 2 – 136Utilized – 477 – – 371 – 1,047 – 6,261 – 40 – 8,196Changes in the scope of consolidation – – – – – – 168 – 168Currency translation – 10 – – 8 17 – 135 – 4 – 140Reclassifications – – 106 – 106 – – –Balance at 31 December 2009 2,182 7,698 1,904 836 2,402 717 15,739Of which short-term – – 1,150 617 2,123 – 3,890Of which long-term 2,182 7,698 754 219 279 717 11,8491Details in note 1

80 Financial Reporting 2009 – Consolidated Financial StatementsStaff-relatedStaff-related provisions mainly include contributions to employee anniversary awards and pension plans.Environmental restorationFuture requirements for Von Roll to take action to correct the environmental impact of sediments and emissions ofchemical substances, in accordance with local laws and directives are inherently difficult to estimate. The materialcomponents of environmental provisions are the costs of completely cleaning and restoring contaminated sites andof treating and containing contamination at sites where the environmental exposure is less severe. Von Roll believesthat 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 & commitmentsContingency & commitments consist mainly of provisions for customer claims, guarantees and warranties.Legal claimsLegal claims consist mainly of provisions for open legal claims.RestructuringRestructuring provisions as at 31 December 2009, contain TCHF 2,224 for the restructuring programme started in2009 and TCHF 177 for the restructuring programme announced in 2003 and now largely completed.The objective of the 2009 restructuring programme was to adjust business operations to the altered frameworkconditions that have emerged in the wake of the global economic crisis and increase the competitiveness of VonRoll. By streamlining processes and structures, merging separate production areas and eliminating unprofitableproduct lines, TCHF 8,621 were allocated to restructuring provisions in 2009. By the end of financial year 2009,TCHF 6,261 had been used.Other provisionsOther provisions consist of provisions which could not be allocated to any other categories, for example provisionsfor bobbins.

Financial Reporting 2009 – Consolidated Financial Statements 8133.| Trade accounts payableTrade accounts payable fall due as follows:in CHF 1,000 2009 2008Less than 1 month 21,435 42,430Between 1 month and 3 months 11,785 9,704Between 3 months and 12 months 7,132 6,050More than 1 year – –Total 40,352 58,184Trade accounts payable include amounts denominated in the following major currencies:in CHF 1,000 2009 2008CHF 5,208 7,690CNY 1,123 1,742EUR 14,489 28,881GBP 661 624ILS 7,059 4,323INR 888 678USD 9,443 13,790Other currencies 1,481 456Total 40,352 58,18434.| Other short-term liabilities and accrualsin CHF 1,000 2009 2008Advances from customers 7,912 24,865Amounts due to customers under construction contracts – 410Social securities payables 1,849 1,907Payables to employees 1,111 1,620Other deferred income and accruals 34,734 42,577Other accounts payable 10,735 8,797Total 56,341 80,176In 2009, other short-term liabilities and accruals mainly comprised provisions for personnel expenses, includingannual leave, overtime and bonuses of TCHF 13,404 (2008: TCHF 17,536) and accruals of TCHF 18,023 (2008:TCHF 22,193).

82 Financial Reporting 2009 – Consolidated Financial Statements35.| Contingent liabilities and commitmentsin CHF 1,000 2009 2008Guarantees 18,557 35,818Warranty obligations – 750Other non-recorded possible liabilities 5,847 22,326Total 24,404 58,894The decrease by CHF 34.5 million compared with 31 December 2008, can primarily be attributed to the declinein Von Roll’s traditional project business (CHF 16.5 million), the return of the final bank guarantee for the purchaseof the Shenzhen Mica Group (CHF 4.3 million) and the non-renewal of guarantees that expired in 2009 (CHF 14.1million).Von Roll Holding AG has issued letters of comfort to various subsidiaries for existing bank loans. None of these loanswas drawn down on 31 December 2009.36.| Purchase commitmentsin CHF 1,000 2009 2008For property, plant and equipment 2,311 6,001For intangible assets 25 –Minimum purchase commitments for goods 12,437 39,951Other non-recorded commitments 708 1,033Total 15,481 46,985The minimum purchase commitments for goods relate primarily to the purchase of copper commodities. Any excesscommitments may be traded on an active market. Von Roll has no further financial or contractual commitments fortangible and intangible assets.

Financial Reporting 2009 – Consolidated Financial Statements 8337.| Pledged assetsin CHF 1,000 2009 2008Accounts receivables 238 7,329Inventory 3,211 5,973Property, plant and equipment – 3,142Other pledged assets – 763Total 3,449 17,20738.| Employee benefitsThe Group operates a number of pension schemes for employees, who fulfil the relevant criteria for acceptance, inSwitzerland and abroad. They include both defined benefit and defined contribution plans, which mostly insure theGroup’s employees against death, invalidity and retirement. The Group also has plans covering anniversary paymentsor other benefits linked to time served, which qualify as plans for other employee benefits due in the futureor as post-employment plans.The pension schemes are based on pensionable years’ service, age, the insured wage and, in some cases, the capitalsaved. The assets of pension schemes with segregated assets are to be held in separate foundations or placedwith insurance companies and may not be returned to the employer.a) Pension schemesin CHF 1,000 20092008(restated)Balance sheet assets/obligations for:Post-employment benefit obligations 23,347 22,965Pension plan assets – 17,875 – 11,080Net obligation recognized in the balance sheet 5,472 11,885Income statement charge for post-employment benefits:Defined benefit plans – 2,981 – 1,928Defined contribution plans – 2,439 – 2,611Total post-employment benefit costs (Note 7) – 5,420 – 4,539The amounts recognised in the balance sheet are determined as follows:in CHF 1,000 20092008(restated)Present value of funded obligations 204,263 204,608Fair value of plan assets – 225,704 – 215,043Overfunding – 21,441 – 10,435Present value of unfunded obligations 16,213 16,740Assets not available to company 10,700 5,580Net liability in the balance sheet 5,472 11,885

84 Financial Reporting 2009 – Consolidated Financial StatementsThe amounts recognised in the financial statement are determined as follows:in CHF 1,000 20092008(restated)Current service cost – 5,747 – 5,946Interest cost – 7,729 – 7,645Expected return on plan assets 9,255 10,546Termination benefits – 436 –Plan amendments – 208Gains on curtailments and settlements 314 –Total costs for defined benefit plans – 4,343 – 2,837Allocation in the financial statements:Employee benefit expenses – 2,981 – 1,928Restructuring expense (Note 10) – 436 –Interest expense (Note 15) – 926 – 909Total – 4,343 – 2,837The following table shows changes in the cumulative actuarial gains and losses for the pension schemes recognisedin other income:in CHF 1,000 20092008(restated)Opening cumulative actuarial gains and losses – 7,537 1,473Exchange differences on foreign plans 62 14Actuarial gains on defined benefit plans 946 2,109Actuarial gains (+) / losses (–) on assets 8,651 – 34,314Variation of asset ceiling – 5,120 23,181Actuarial gain / loss on defined benefit plans recognised directly in equity 4,539 – 9,010Closing defined benefit obligation – 2,998 – 7,537Movements in the present value of the plan assets were as follows:in CHF 1,000 2009 2008Opening fair value of plan assets 215,043 245,936Exchange differences on foreign plans – 194 – 974Expected return on plan assets 9,255 10,546Actuarial gains (+) / losses (–) 8,651 – 34,314Assets assumed in business combinations – 1,074Change in scope 153 –Contributions from the employer 4,683 3,891Contributions from plan participants 3,112 2,470Benefits paid through plan assets – 14,999 – 13,586Closing fair value of plan assets 225,704 215,043

Financial Reporting 2009 – Consolidated Financial Statements 85The movements of the defined benefit obligations were as follows:in CHF 1,000 20092008(restated)Opening defined benefit obligation 221,351 223,105Exchange differences on foreign plans – 451 – 3,175Current service cost 5,747 5,946Interest cost 7,729 7,645Contribution from plan participants 3,112 2,470Actuarial gains (–) – 946 – 2,109Termination benefits 436 –Plan amendments – – 208Settlements and curtailments – 314 –Liabilities assumed in business combinations – 2,617Change in scope 262 –Benefits paid through plan assets – 14,999 – 13,586Benefits paid by employer – 1,448 – 1,354Closing defined benefit obligation 220,479 221,351The most important categories and the expected return as of the balance sheet date are:Fair value ofplan assetsExpectedreturnFair value ofplan assetsExpectedreturn2009 2009 2008 2008Equity instruments 84,383 6.86 % 63,331 7.00 %Debt instruments 113,554 2.85 % 105,972 3.00 %Property 10,285 4.50 % 10,244 4.50 %Other 17,482 2.65 % 35,496 2.50 %Weighted average expected return 225,704 4.40 % 215,043 4.20 %As of 31 December 2009, the pension assets include Group’s shares with a fair value of CHF 3.8 million (2008: none).The pension assets do not include any real estate used by the Group or any other assets either.Movements in experience adjustments were as follows:in CHF 1,000 20092008(restated)2007(restated) 2006 2005As of December 31:Present value of funded defined benefit obligations 220,479 221,351 223,105 214,900 192,074Fair value of plan assets – 225,704 – 215,043 – 245,936 – 245,308 – 226,741Surplus (–) / Obligation (+) – 5, 225 6,308 – 22,831 – 30,408 – 34,667Experience adjustmentson plan liabilities 2,601 – 3,959 – 1,245 – 6,993 – 389Experience adjustmentson plan assets 8,651 – 34,314 – 3,369 18,268 1,642

86 Financial Reporting 2009 – Consolidated Financial StatementsIn the next financial year, the Group plans to provide TCHF 4,600 for the defined benefit obligation.The principal weighted assumptions used were as follows:20092008(restated)Discount rate 3.57 % 3.61 %Expected return on plan assets 4.40 % 4.40 %Future salary increases 2.06 % 2.09 %Future pension increases 0.54 % 0.52 %Health care cost trend assumed for next year 8.20 % 8.20 %Rate to which the cost trend is assumed to decline 4.00 % 4.00 %Year this rate is reached 2097 2097Sensitivity of the assumed cost trends in the area of medical care:Increase of 1 % in costtrend rateDecrease of 1 % in costtrend rateEffects on service cost and interest cost 297 – 262Effects on the defined benefit obligation 39 – 34b) Other long-term employee benefitsMost of the other plans relate to anniversary payments. Changes in the net liabilities for these plans recognised instaff-related provisions can be summarised as follows:in CHF 1,000 2009 2008Opening net liability 1,077 1,063Entities annual expenditure 104 123Benefits paid by employer – 110 – 71Currency translation adjustments – 4 – 38Closing net liability 1,067 1,077c) Post-employment plansSome of the Group companies operate plans for post-employment benefits. The majority of these plans cover partialretirement schemes. The net liabilities of these plans recognised in staff-related provisions amounted to TCHF 245as of 31 December 2009 and TCHF 241 as of 31 December 2008.

Financial Reporting 2009 – Consolidated Financial Statements 8739.| Related party transactionsRelated companies and persons include associated companies and persons holding voting rights, either directly orindirectly who could exercise a decisive influence on company management and their closest relatives, Groupmanagers and their relatives and companies subject to uniform management or decisive influence by the citedpersons.Transactions with related parties are disclosed below:in CHF 1,000 2009 2008Compensation of the Board of Directors and key management personnelBenefits 3,580 4,014Post-employment benefits 411 427Benefits after retirement from key management 444 –Share-based payment 350 194Total 4,785 4,635No loans, advances or guarantee obligations were granted to members of the Board of Directors and/or ExecutiveManagement or major shareholders of Von Roll Holding AG. As of 31 December 2009 members of the Board ofDirectors, members of the management team and parties related to them held 469,267 shares in Von RollHolding AG (2008: 476,933). For detailed information please refer to the notes to the financial statements of Von RollHolding AG.40.| Significant events after the balance sheet dateOn 8 January 2010, Von Roll established Von Roll Water Holding AG, based in Breitenbach. The purpose of the entityis the acquisition, disposal and management of investments in existing and future industrial, commercial and financialcompanies of all types in Switzerland and abroad, in particular in the water, sewage and sludge sector aswell as in the field of renewable energy sources.Von Roll has signed an agreement with the owners of the BHU Umwelttechnik GmbH to acquire a full stake in thecompany. Headquartered in Bietigheim-Bissigen, Germany, BHU Umwelttechnik GmbH specializes in water andwastewater treatment and serves as part of the additional business segment “Von Roll Water”, both the industrialand the public water market. The company employs 22 employees and generated sales of around CHF 12 millionin 2009.No other events have occurred since the reporting date that could have had a significant effect on the 2009 consolidatedincome statement.41. | Authorisation of the consolidated financial statementsThese consolidated financial statements were authorised for issue by the Board of Directors on 12 March 2010 andwill be recommended for approval at the Annual General Meeting on 4 May 2010.

88 Financial Reporting 2009 – Consolidated Financial StatementsReport of the statutory auditorTo the General meeting ofVON ROLL HOLDING AG, BREITENBACHReport on the consolidated financial statementsAs 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 changesin equity and notes (page 38 to 87) for the year ended December 31, 2009.Board of Directors’ ResponsibilityThe Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. Thisresponsibility includes designing, implementing and maintaining an internal control system relevant to the preparationand fair presentation of consolidated financial statements that are free from material misstatement, whetherdue to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accountingpolicies 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 conductedour audit in accordance with Swiss law and Swiss Auditing Standards and International Standards on Auditing.Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidatedfinancial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on the auditor’s judgment, including the assessmentof the risks of material misstatement 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 preparationand fair presentation of the consolidated financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control system. An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidatedfinancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.OpinionIn our opinion, the consolidated financial statements for the year ended December 31, 2009 give a true and fairview of the financial position, the result of operation and the cash flows in accordance with International FinancialReporting Standards (IFRS) and comply with Swiss law.

Financial Reporting 2009 – Consolidated Financial Statements 89Report on other legal requirementsWe 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 internalcontrol system exists, which has been designed for the preparation of consolidated financial statements accordingto the instructions of the Board of Directors.We recommend that the consolidated financial statements submitted to you be approved.DELOITTE AGDaniel O. FlammerLicensed Audit ExpertAuditor in ChargeChristophe AebiLicensed Audit ExpertZurich, March 12, 2010

90 Financial Reporting 2009 – Statutory Financial Statements 2009Income statement of Von Roll Holding AG for the year 2009in CHF 1,000 Note 2009 2008Operating income 1 4,377 –Personnel expenses – 6,426 – 2,202Operating expense 2 – 12,316 – 18,173Net operating income – 14,365 – 20,374Income from investment 9,117 8,380Other financial income 5,427 3,822Other income – 171,000Other financial expense 5 – 10,057 – 21,849Net operating income before tax – 9,878 140,978Exceptional income 6 5,637Exceptional expense – 41 – 4Income before tax – 9,913 146,611Income tax – –Profit (+)/ loss (–) after tax – 9,913 146,611

Financial Reporting 2009 – Statutory Financial Statements 2009 91Balance sheet of Von Roll Holding AG at December 31, 2009Assetsin CHF 1,000 Note 2009 2008Long-term assetsLoans and long-term receivables with group companies 3 145,302 166,180Investments in group companies 4 379,167 379,403Long-term securities 1,350 270Treasury shares 5 45,046 47,961Total long-term assets 570,865 593,814Current assetsCash and cash equivalents 2,538 23,994Receivables from group companies 26,671 42,993Receivables from third parties 117 1,492Prepaid expense and accruals 450 1,642Total current assets 29,776 70,122Total assets 600,641 663,936Equity and liabilitiesin CHF 1,000 Note 2009 2008EquityShare capital 6 18,478 18,478Legal reserves 18,036 20,882Share premium 320,226 320,226Reserve for treasury shares 72,291 69,446Net profit shown in the balance sheet- Accumulated profit 152,349 41,441- Profit (+)/ loss (–) after tax – 9,913 146,611Total Equity 571,467 617,083LiabilitiesLong-term provisions 7,698 8,129Payables to group companies 8,668 23,561Payables to third parties 417 3,458Short-term provisions 89 78Accrual for purchase price consideration 10,353 10,577Deferred income and accruals 1,949 1,050Total liabilities 29,174 46,852Total equity and liabilities 600,641 663,936

92 Financial Reporting 2009 – Statutory Financial Statements 2009Notes to the statutory financial statements 2009of Von Roll Holding AG1.| Operating incomeThe operating income in 2009 consists solely of Group-internal invoicing.2.| Operating expensesThe operating expenses in 2009 consist mainly of Group-internal invoicing of CHF 8.5 million.3.| Loans and long-term receivables with Group companiesLoan receivables include a subordinated loan of CHF 1.1 million to Von Roll Solar AG.4.| List of subsidiariesName and registered officePercentage ofshareholdingCountrySharecapitalcurrencyShare capitalamount(in 1,000)Von Roll Schweiz AG, Breitenbach 99.99 % CH CHF 16,000 Prod. und VerkaufVon Roll Solar AG, Breitenbach 51.00 % CH CHF 100 Prod. and salesVon Roll Insulation & Composites Holding AG,Breitenbach 1 100.00 % CH CHF 1,000 HoldingVon Roll Management AG, Au/Wädenswil 100.00 % CH CHF 1,500 ManagementVon Roll Hong Kong Holding Ltd., Hong Kong 100.00 % CN HKD 10 HoldingVon Roll USA Holding Inc., Wilmington/Delaware 100.00 % US USD 0 HoldingVon Roll USA, Inc., Schenectady/New York 100.00 % US USD 250 Prod. and salesPearl Insulations Pvt. Ltd, Bangalore 36.75 % IN INR 23,126 Prod. and salesPearl Metal Products (Bangalore) Pvt. Ltd, Bangalore 36.75 % IN INR 26,828 Prod. and salesVon Roll Transformers Ltd., Ramat Ha’Sharon 100.00 % IL ILS 7,200 Prod. and salesPrincipalactivity1Name and purpose of the Von Roll Immobilien AG changed as of December 22, 2009The investment in Von Roll Solar AG was increased in 2009 by 20 % to 51 %. The investment in Bank von Roll AG(formerly Von Roll Finanz AG) was reduced from 100 % to 3 %.

Financial Reporting 2009 – Statutory Financial Statements 2009 935.| Treasury sharesAs of the reporting date, Von Roll Holding AG held 7,038,464 treasury shares (2008: 6,261,249), which were valued atthe balance sheet price of CHF 6.40 (2008: CHF 7.66). The valuation at the balance sheet price resulted in a loss ofTCHF 5,761 (2008: 21,484), which is included in other financial expense. In financial year 2009, Von Roll Holding AGacquired 1,714,792 (2008: 8,399,105) treasury shares at an average price of CHF 7.51 (2008: CHF 11.60). The highestprice for the purchased shares was CHF 8.75 (2008: CHF 13.00), while the lowest price at which treasury shares wereacquired was CHF 5.80 (2008: CHF 6.30). In 2009, 937,577 (2008: 3,217,856) treasury shares were sold at an averageprice of CHF 6.80 (2008: CHF 11.62). This figure includes sales at a high of CHF 8.54 (2008: CHF 12.19) and a low ofCHF 5.82 (2008: CHF 7.05).6.| Share capital2009 2008Number of issued shares 184,778,889 184,778,889Nominal value in CHF 0.10 0.10Share capital in CHF 18,477,889 18,477,889The share capital as of 31 December 2009 consists of 184,778,889 bearer shares. The par value per share isCHF 0.10. No authorised or conditional capital is outstanding.7.| Major shareholders(pursuant to Article 663c of the Swiss Code of Obligations)According to the latest available information, the major shareholders are:Shareholders 2009 2008August von Finck, Munich (Germany)Francine von Finck, Munich (Germany)August François von Finck, Freienbach (Switzerland)Maximilian von Finck, Freienbach (Switzerland)Maria Theresia von Finck, Munich (Germany)Von Roll Holding AG, Au/Wädenswil (Switzerland) 67.40 % 66.98 %The above-mentioned figure include:Von Roll Holding AG, Au/Wädenswil (Switzerland) 3.81 % 3.39 %8.| Contingent liabilities to third partiesin CHF 1,000 2009 2008Guarantees 5,032 23,962As of 31 December 2009, total guarantees amounted to CHF 5.0 million. The decrease compared with the previousyear can be attributed to the decline in Von Roll’s traditional project business and the physical return of the final bankguarantee for the purchase of the Shenzhen Mica Group (CHF 4.5 million).Von Roll Holding AG has issued letters of comfort to various subsidiaries for existing bank loans. None of these loanswas drawn down on 31 December 2009.

94 Financial Reporting 2009 – Statutory Financial Statements 20099.| Board of Directors and management remunerationBoard of Directors for 2009:in CHF 1,000BenefitsVice-Chairman Member Member Memberactive active active active totalFix benefits (incl. pension contributions) 158 100 105 105 468Other benefits – 8 16 1 25Total 158 108 121 106 493GuidoEgliGerdAmtstätterGerdPeskesPeterKalantzisBoard of Directors for 2008:in CHF 1,000BenefitsGuidoEgliGerdAmtstätterGerdPeskesPeterKalantzisVice-Chairman Member Member Memberactive active active active totalFix benefits (incl. pension contributions) 151 93 97 97 438Other benefits – 7 – – 7Total 151 100 97 97 445The compensation for the Chairman of the Board of Directors Thomas Limberger is included in the compensationfor the Management due to his dual function as Chairman of the Board of Directors and CEO.Management:ThomasLimbergerCEOKey managementtotalThomasLimbergerCEOKey managementtotalin CHF 1,000 2009 2009 2008 2008BenefitsFix benefits 1,496 2,595 1,496 2,836Variable benefits 180 312 296 521Shares/optionsOptions 210 350 128 194Other benefitsBenefits after retirement from key management – 444 – –Pension contributions 171 383 155 399Health and accident insurance contributions 3 11 3 13Other compensation 71 197 70 228Total 2,131 4,292 2,149 4,190Additional variable benefits for 2008 403 765Total 2,534 5,057 2,149 4,190

Financial Reporting 2009 – Statutory Financial Statements 2009 95Details of options held:Number 2009 2008Thomas LimbergerChairman of the Board and Chief Executive Officer 600,000 300,000Markus ScherbelChief Financial Officer 100,000 –Jürgen BremerChief Legal and HR Officer 100,000 100,000Andreas HartingChief Marketing Officer 200,000 100,000Total 1,000,000 500,000In 2007, a stock option plan for the Executive Management was introduced. Non-transferable stock options may begranted free of charge each year; however, there is no obligation to grant any options. The options may be exercisedat any time for a period of three years for a price determined at the grant date, if at the time of exercise, the executiveofficer is still employed by the company. A maximum of 50 % of the options granted may be exercised each year.The options can only be settled in shares (equity settlement). The potential commitment to provide shares for optionswill be covered solely by the purchase of shares on the stock exchange.In 2007, 500,000 options to acquire 500,000 shares were granted to the Executive Management. The exercise pricewas fixed at CHF 20. The issued options may be exercised from the grant date until 31 December 2010; however, only50 % may be exercised in 2007 and 2008, and 50 % in 2009.The options granted at that time are valued on the basis of the Black-Scholes option pricing model and have anaverage fair value of CHF 1.05. The volatility rate of 46 % is based on historically observed stock prices. The risk-freeinterest rate of 3.25 % is based on Swiss government bonds with similar maturities. The underlying dividend yield isexpected to be 1.06 %.In the reporting period, 500,000 options to acquire 500,000 shares were granted to the Executive Management. Theexercise price was fixed at CHF 12. The issued options may be exercised from the grant date until 31 December 2012;however, only 50 % may be exercised in 2009 and 2010, and 50 % in 2011.The options granted are valued on the basis of the Black-Scholes option pricing model and have an average fairvalue of CHF 0.95. The volatility rate of 43 % is based on historically observed stock prices. The risk-free interest rateof 2.32 % is based on Swiss government bonds with similar maturities. The underlying dividend yield is expected tobe 1.56 %.In the reporting period, corresponding personnel expenses were recognised to the amount of TCHF 350(2008: TCHF 194). Social security contributions related to options are chargeable only as of the exercise date. Taxesare to be borne by the option holder.No options were exercised in the reporting period, neither have any lapsed.

96 Financial Reporting 2009 – Statutory Financial Statements 2009On 31 December, members of the Board of Directors, members of the management team and parties related to themheld the following shares:Number 2009 2008Thomas LimbergerChairman of the Board andChief Executive Officer 100 100Guido EgliVice-Chairman of the Board of Directors 1,067 1,067Gerd AmtstätterMember of the Board of Directors 466,667 466,667Peter KalantzisMember of the Board of Directors 1,333 1,333Jürgen BremerChief Legal and HR Officer – 7,666Andreas HartingChief Marketing Officer 100 100Total 469,267 476,93310.| Risk assessmentThe Board of Directors and Executive Management attach a great deal of importance to dealing carefully with riskand extended their risk management systems in the reporting year. In addition to ensuring that comprehensive andeffective insurance cover is in place, risk management involves the systematic identification, assessment and reportingof 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 toExecutive Management on risk management every six months. The Board of Directors is immediately advised ofrisks 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. Risks were distinguished in accordance with theirsignificance in the key processes procurement, production and sales and in accordance with risks in support processessuch as IT, communications technology and Human Resources.The risk assessment carried out is based on information obtained in interviews with key staff. Risks are categorisedin accordance with the same framework as that used in the internal control system. For the top ten risks (includingthose which can lead to incorrect or fraudulent reporting), a detailed analysis of the probability of their occurringand their impact was carried out, which constitutes the basis for the introduction of a proportionate risk managementsystem.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.11. | Significant events after the balance sheet dateOn 8 January 2010, Von Roll established Von Roll Water Holding AG, based in Breitenbach. The purpose of the entityis the acquisition, disposal and management of investments in existing and future industrial, commercial and financialcompanies of all types in Switzerland and abroad, in particular in the water, sewage and sludge sector aswell as in the field of renewable energy sources.

Financial Reporting 2009 – Statutory Financial Statements 2009 97Proposal for the use of accumulated profitsThe Board of Directors’ proposal to the 187th Annual General Meeting to use accumulated profits is as follows:in CHF 1,000 2009 2008Profit carried forward from previous years 152,348 41,441Profit (+) / loss (–) after tax – 9,913 146,611Accumulated profit 142,435 188,052Proposal:Distribution of dividend (maximum) 18,478 35,704Profit carry forward 123,957 152,348The Board of Directors proposes the payment of a dividend of CHF 0.10 per share to a maximum of 184,778,889bearer shares.Shares owned by the company do not carry a dividend, which is why the dividend paid out may differ from themaximum figure shown.After the appropriation of the accumulated profit the equity reconciles as follows:in CHF 1,000 2009 2008Share capital 18,478 18,478Legal reserves 18,036 20,882Share premium 320,226 320,226Reserve for own shares 72,291 69,446Net income shown in the balance sheet 123,957 152,348Equity 552,988 581,379Breitenbach, March 12, 2010Von Roll Holding AGFor the Board of Directors:Thomas LimbergerChairman of the Board of Directors

98 Financial Reporting 2009 – Statutory Financial Statements 2009Report of the statutory auditorTo the General meeting ofVON ROLL HOLDING AG, BREITENBACHReport on the financial statementsAs statutory auditor, we have audited the accompanying financial statements of Von Roll Holding AG, which comprisethe income statement, balance sheet and notes (page 90 to 96) for the year ended December 31, 2009.Board of Directors’ ResponsibilityThe Board of Directors is responsible for the preparation of the financial statements in accordance with the requirementsof Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementingand maintaining an internal control system relevant to the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error. The Board of Directors is further responsible for selectingand 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 ouraudit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and performthe 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 financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers the internal control system relevant to the entity’s preparation of the financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriatenessof the accounting policies used and the reasonableness of accounting estimates made, as well as evaluatingthe overall presentation of the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion, the financial statements for the year ended December 31, 2009 comply with Swiss law and the company’sarticles of incorporation.

Financial Reporting 2009 – Statutory Financial Statements 2009 99Report on other legal requirementsWe confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) andindependence (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 internalcontrol system exists, which has been designed for the preparation of financial statements according to the instructionsof the Board of Directors.We further confirm that the proposed appropriation of accumulated profits (page 97) complies with Swiss law andthe company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.DELOITTE AGDaniel O. FlammerLicensed Audit ExpertAuditor in ChargeChristophe AebiLicensed Audit ExpertZurich, March 12, 2010

100 GlossaryProduct glossaryAdhesive tapeThe adhesive tapes used in electrical insulation are specialinsulating tapes that have specific heat resistanceand other properties. They generally contain no micaand are only used in low-voltage applications. Most areUL-certified (e.g. UL 20780 certification for Intertape®and UL E 315208 or UL E 315249).Alternating current (AC)Electrical current whose strength and direction changesperiodically.AmpereUnit of electrical current, named after the French physicianAndré-Marie Ampère (1775–1820).BaekelandLeo Hendrik Baekeland was a Belgian chemist who inventedBakelite, the thermosetting plastic based onphenol resin, in the early 20th century, thus laying thefoundation for the production of the first composites(sheets, tubes and moulded parts) by Von Roll a fewyears later.CompositeA combination of two or more materials which has differentproperties to its individual components. For fibrecomposites, glass or carbon fibres, for example, are embeddedin a matrix such as resin.DuroplastsDuroplasts, also called duromers, are plastics that canno longer be moulded after hardening. Duroplasts arehard, glass-like polymer materials that are linked in arigid 3-D structure by chemical primary valency bonds.The bonds are created when preliminary productschemically react with molecular chains through the applicationof heat or pressure, usually with the help ofcatalysts.Electrical generatorElectrical generator (from the Latin generare: to beget,produce) is an electrical machine that converts motionenergy or rotational energy to electrical energy and istherefore the reverse of the principle of the electric motorwhich converts electrical energy to motion energy.FilamentA single fibre or thread of any length used to make glassfabrics for laminates such as Vetronit ® .Direct current (DC)A flow of electrical current whose strength and directiondo not change. It is generated in galvanic solar or fuelcells or produced from alternating current by means ofa commutator, and is used in electronics, galvanisationand in the supply of energy to railway systems.High-voltage currentHigh-voltage current is used for regional and nationwideelectrical power transmission. The voltage level isdefined as between 60 and 150 kV, but the most commonis 110 kV. In contrast, rotating high-voltage machinessuch as motors and generators normally usebetween 1 and 30 kV.InsulationInsulation means the process of keeping two thingsseparate or isolating them. The verb isolate derivesfrom the French “isoler”. In electrical engineering, insulationis used to protect the live components againstcontact, short circuits and unwanted residual current.IodineA chemical element, often used as a catalyst in chemicalreactions such as polymerisation.LaminateA laminate (from the Latin lamina, or layer) is a multilayerduroplastic material made by compressing andsticking together layers of the same or different materials.Joining the materials can complement the propertiesof the individual constituents.Low-voltage currentUsed for local power supply. Defined as up to 1,000volts (1kV), but normally 230 to 400 volts.MicaOne of a group of sheet silicates whose propertiesmake them especially suitable for use in high-voltageinsulation, particularly the minerals muscovite andphlogopite. These have exceptionally high electrical,thermal and chemical resistance, and also prevent thecorona discharges that commonly occur in high-voltagemachines. The word mica comes from the Latin micare,to shine or glitter.MotorA motor (from the Latin motor, or mover) is a device thatperforms mechanical work by converting thermal,chemical, electrical or other forms of energy. Motorsnormally rotate a shaft which drives machines, tools andmeans of transport.PrepregShort for preimpregnated. A combination of mat, fabric,nonwoven material or roving with resin, usually cured tothe B-stage, ready for molding.Primary energyPrimary energy is an unconverted energy form that produceselectricity and heat. Examples include oil, coal,natural gas and hydroelectric power.

Glossary 101Quality assuranceIn today’s industrial companies, the quality of manufacturedproducts is guaranteed through quality assurancesystems and periodically checked using ISO certification(e.g. ISO 9001).Rotational energyRotational energy is the kinetic energy of a rigid bodysuch as a wind turbine rotating on a fixed axis. This energydepends on the body’s moment of inertia and angularvelocity. Wind turbine generators use rotationalenergy to produce electrical current in the stator coilsthrough electromagnetic induction.StatorA stator is the stationary part of a machine, e. g. in anelectric motor, generator, hydromotor or pump. It oftenalso serves as the housing, and in the case of electricmotors and generators consists primarily of sheet steeland the stator coils.Surface resistanceThe voltage required to cause a specific current to flowacross the surface of a material. This is an importantparameter for the surface leakage resistance and antistaticproperties of materials used to make printed circuits(soldering and assembly frames).Traction motorA traction motor is an electric motor that drives a vehiclethat runs on rails. It is usually housed in the chassisand connected to the wheel axle via a reduction gear.Underwriters Laboratories (UL)US organisation, founded over 100 years ago, that inspectsand certifies products for their usage propertiesand safety.VoltUnit of electromotive force named after the Italian physicistAlessandro Volta (1745 – 1827), the inventor of thebattery.XenonA chemical element and noble gas used in gas dischargelamps, for example in car headlights.YttriumA chemical element and rare-earth metal. It plays an importantrole in ceramic high-temperature superconductors.

102 GlossaryFinancial glossaryCash flowChange in cash and cash equivalentsCash flow from financing activitiesCash flow from equity contributions minus payments toowners plus cash flow from raising financial liabilitiesminus repayments of financial liabilities plus investingactivitiesCash flow from investing activitiesCash flow for investments and loans plus interest receivedand revenue from the disposal of fixed assetsCash flow from operating activitiesEBITDA less gains/losses on the disposal of fixed assets,changes in long-term provisions and changes inshort-term assets and liabilities plus income taxes paid.EBITEarnings before interest and taxesNet turnoverRevenue from the sale of products and/or services afterdeducting reductions in earnings and taxesOperating EBITOperating income less non-operational effectsPayout ratioRatio of total dividend to net incomePE ratioRatio of share price to earnings per shareReturn on invested capital (ROIC)Ratio of operating net income to invested capitalTrading volumeNumber of shares traded on the stock exchange in aspecific periodEBIT marginRatio of EBIT to salesEBITDAEarnings before interest, taxes, depreciation and amortisation(on property, plant and equipment and intangibleassets)EPS (earnings per share)Consolidated net income for the year divided by the averageweighted number of outstanding sharesEquity ratioPercentage share of equity to total capitalFree floatFreely tradable shares not owned by long-term investorsin the CompanyGross marginPercentage share of gross profit (sales less manufacturingcosts) to total salesMarket capitalisationShare price multiplied by the total number of sharesNet cash positionCash and cash equivalents less interest-bearing financialliabilitiesNet incomeOperating income less net financial result and taxes

Our product portfolioVon Roll is the sole full-range supplier of materials and systems for the insulationof electrical machines as well as high-performance products for various hightechindustries.MicaMica as a base material for high-voltage insulation. Von Roll’scommitment to mica is extensive and encompasses all stages in themanufacturing process.WiresInsulated round, flat and Litz wires for high-voltage, low-voltageand electronic applications.CablesMica tapes for fire-resistant cables. Von Roll provides a wide rangeof products that are ideally suited to all commonly used standards.LiquidsImpregnation resins for high and low voltage, potting resins, castingresins, as well as encapsulating and conformal coatings.FlexiblesInsulating flexible materials for low-voltage applications such asflexible laminates and adhesive tapes.CompositesEngineered materials made from a resin and a support structure withdistinct physical, thermal and electrical properties. They can bemolded, machined or semi-finished.TransformersHigh-performance transformers for power transmission and distribution,tailored solutions to all applications of today’s energy supplycompanies.BallisticsHigh-quality systems for armored defence based on thermoset/thermoplastic products in single use or tailored combinations.TestingVon Roll provides electrical, thermal and mechanical testing ofindividual materials as well as complete insulating systems. We areUL-certified.TrainingVon Roll Corporate University provides a training program in highandlow-voltage insulation to its customers.

Three-year overview(in CHF 1,000) 20092008(restated)2007(restated)Order intake (gross) 474,814 688,225 680,617Net sales 549,429 710,055 630,888Number of employees 2,953 3,448 2,086Depreciation, amortization and impairments – 19,067 – 12,644 – 13,690Operating income – 8,491 50,070 42,437Net cash flow from operating activities 29,470 44,696 29,388Capital expenditures 21,224 27,046 22,608Current assets 282,681 382,526 546,007Total assets 520,251 608,419 702,741Current liabilities 103,122 144,816 108,627Non-current liabilities 44,434 44,913 108,627Equity 372,695 418,690 74,265Equity ratio (%) 72 % 69 % 74 %Number of issued shares (bearer shares) 184,778,889 184,778,889 184,778,889Operating EBIT per share 1 0.00 0.30 0.32Operating cash flow per share 0.17 0.24 0.20Equity per share (CHF) 2.09 2.29 0.51Dividends per share (CHF) 2 0.10 0.20 0.101Operating EBIT/weighted average number of shares outstanding2Dividend 2009: proposal by the Board of Directors

Business addressVon Roll Holding AGSteinacherstrasse 1018804 Au / WädenswilSwitzerlandPhone +41 44 204 30 00Fax +41 44 204 30 10www.vonroll.comRegistered officePasswangstrasse 204226 Breitenbach SOStock exchange listingSIX Swiss Exchange (Symbol: ROL)Security number: 324.535ISIN: CH0003245351ImprintPublisher: Von Roll Holding AG, Au / WädenswilContent / text: Dynamics Group AG, Zurich, SwitzerlandDesign / artwork / print: Victor Hotz AG, Steinhausen, SwitzerlandFor publications and further information,please contactLuitpold WüsthofInvestor RelationsPhone +41 44 204 30 50Fax +41 44 204 30 08investor@vonroll.comSven OhligsCorporate CommunicationsPhone +41 44 204 30 34Fax +41 44 204 30 39press@vonroll.comCreated and printed in Switzerland© Von Roll Holding AG, 2010The report and the consolidated financial statements are originallyprepared in German and translated into English. In the event of anydiscrepancy, the printed German version prevails.The Annual Report is available on the Internet atwww.vonroll.com.Von Roll Holding AGSteinacherstrasse 1018804 Au / WädenswilSwitzerland

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

Annual Report 2009 - Von Roll

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