Uster Technologies Ltd | Annual Report 2011 Uster ... · yarn clearer and substantial increases in...

Uster Technologies Ltd | Annual Report 2011

Uster Technologies AG | Geschäftsbericht 2011

Think USTER – Think Quality

Milestones

1875 Establishment of an aerial telegraphy

workshop in Uster.

1927 Production of auxiliary weaving mill

machines started.

1944 Initiation of operations in the textile

electronics business.

1957 First publishing of USTER® STATISTICS.

1982 Cooperation with the Chinese textile

industry.

2003 Buyout from Zellweger Luwa by the

Management and two private-equity

investment companies.

2005 Development and assembly established

in China.

Sale of the one millionth USTER®

QuAnTum clearer.

2006 Uster Technologies Ltd was sold to its Man-

agement and funds advised by Alpha Be-

teiligungsberatung GmbH & Co. KG via a

secondary buyout.

2007 Listing on the main segment of SIX Swiss

Exchange.

2008 Introduction of new product groups

specifically targeting the mid-market

segment.

2009 Acquisition of ZWEIGLE® product range.

Broadening of existing shareholder base

with new strategic investor Toyota

Industries Corporation.

2010 Launch of ground-breaking third gen-

eration of USTER® QUANTUM clearer.

Meilensteine

1875 Gründung eines Betriebes für oberirdi-

sche Telegrafie in Uster.

1927 Start der Produktion von Hilfsmaschinen

für Webereibetriebe.

1944 Beginn der Aktivitäten im Bereich Tex-

tilelektronik.

1957 Erste Veröffentlichung der USTER®

STATISTICS.

1982 Zusammenarbeit mit der chinesischen

Textilindustrie.

2003 Buy-out aus der Zellweger Luwa Gruppe

durch das Management und zwei Pri -

vate-Equity-Gesellschaften.

2005 Aufbau eines Entwicklungs- und Mon-

tagestandortes in China.

1 Million USTER® QuAnTum Reiniger

verkauft.

2006 Uster Technologies AG wird im Rahmen

eines zweiten Buy-outs an das Manage-

ment sowie an durch die Alpha Beteili-

gungsberatung GmbH & Co. KG vertre-

tene Fonds verkauft.

2007 Kotierung am Hauptsegment der SIX

Swiss Exchange.

2008 Einführung von neuen, speziell auf die

Bedürfnisse des mittleren Marktsegments

ausgerichteten Produkten.

2009 Übernahme des Produktsortiments von

Zweigle.

Erweiterung des Aktionärskreises durch

den neuen strategischen Investor To-

yota Industries Corporation.

2010 Lancierung der wegweisenden dritten

Generation des USTER® QUANTUM

Garnreinigers.

Gross Sales

in CHF 1,000

2011 192,510

2010 132,841

2009 100,763

2008 154,893

2007 186,666

Net Result

in CHF 1,000 in percent of gross sales

2011 36,237

2010 20,763

2009 1,078

2008 5,316

2007 3,587

EBITA


2011 56,635

2010 34,602

2009 22,709

2008 34,168

2007 52,384

Free Cash Flow


2011 49,182

2010 39,011

2009 11,278

2008 29,409

2007 37,084

Achievements 2011

• 44.9% sales growth with strong EBITA margin of

29.4%.

• Excellent net result of CHF 36.2 million with further

reduction of net debt to CHF 40.7 million, demon-

strating the Company’s strong cash generation

ability and resulting in a strong balance sheet.

• Increased investments in R&D in order to further

strengthen product pipeline and to secure sustain-

able long-term growth.

• Significant sales growth in all product groups, in-

cluding record sales of the new USTER® QUANTUM 3

yarn clearer and substantial increases in labora-

tory fiber and yarn testing instruments.

• Rapid ramp-up of new automated production fa-

cilities, enhancing USTER’s flexible business mod-

el and allowing fast market penetration of new

products, with high levels of quality and reliability.

• Demonstrated market leadership at Shanghaitex

in China and ITMA 2011 in Barcelona, Spain.

• Introduction of the USTER Total Testing approach

enabling textile producers to improve the sustain-

ability of their business performance under the

slogan “From Uncertain Results to Predictable

Profits”.

Höhepunkte 2011

• Umsatzwachstum von 44.9% mit hoher EBITA-

Marge von 29.4%.

• Ausgezeichnetes Nettoergebnis in Höhe von CHF

36.2 Mio. und weiterer Abbau der Nettoschulden

auf CHF 40.7 Mio. Sie demonstrieren die ausgepräg-

te Fähigkeit des Unternehmens, liquide Mittel zu

generieren, und stärken die solide Bilanz weiter.

• Höhere Investitionen in F&E-Projekte zur Sicherung

eines nachhaltigen Wachstums.

• Markantes Umsatzwachstum in allen Produktgrup-

pen, einschliesslich des Rekordumsatzes mit dem

neuen USTER® QUANTUM 3 Garnreiniger und

deutlicher Steigerungen bei Faser- und Garnprüf-

systemen für Labors.

• Neue, automatisierte Fertigungsanlagen stärken

das flexible Geschäftsmodell von USTER und er-

möglichen eine schnellere Marktdurchdringung

neuer Produkte mit hoher Qualität und Zuverläs-

sigkeit.

• Demonstration der Marktführerschaft auf der

Shanghaitex in China und der ITMA 2011 in Barce-

lona, Spanien.

• Einführung des USTER Total Testing-Konzepts. Es

ermöglicht Textilherstellern, nachhaltige Erträge

zu erzielen – „From Uncertain Results to Predicta-

ble Profits“.

22.5 %

11.2 %

29.4%

26.0 %

25.5%

29.1 %

22.1 %

19.0 %

28.1 %

19.9 %1.9 %

3.4 %

18.8%

15.6 %

1.1 %

After Sales Services and Textile Technology

i i i i i i

Textile Production Process “Fiber to Fabric”

Process Step

USTER® Products

USTER® Complementary Products and Services

Products and Services

Ginning and cotton classing

Fiber testing Yarn testing Yarn clearing Fabric quality assurance

Intelligent sourcing

• INTELLIGIN® • HVI® Systems

• HVI® Systems • AFIS® PRO• LVI ®

• TESTER • TENSoRAPID® • TENSOjET® • CLASSIMAT® • SLIVERGUARD® • ZWEIGLE®

• QUANTUM • STATISTICS • CLASSIMAT® • TENSoRAPID® • TENSOjET® • ZWEIGLE®

• USTERIzED®

• INTELLIGENT SOURCING®

• Quality Profiles

USTER® STATISTICS and USTERIzED®

Integrated Data and Expert Systems

Portrait

The Uster Group is the leading high technolo gy

instrument manufacturer of products for qual-

ity measurement and certification for the textile

industry. The Group provides testing and

monitoring instruments, systems and services

that allow optimization and certification of qual-

ity through each individual stage of textile pro-

duction; from the raw textile fiber, such as cot-

ton, wool or synthetic filament yarns, to the

final finished fabric. The Uster Group provides

benchmarks that are the basis for the trading of

textile products at assured levels of quality across

global markets.

Uster Technologies Ltd was established in 1875

as an aerial telegraphy workshop in Uster (Swit-

zerland) and became an independent company

in 2003 following the acquisition of the zellwe-

ger Uster division of Zellweger Luwa by the Man-

agement and funds advised by two private-eq-

uity investment companies. In 2006 Uster

Technologies Ltd was acquired by its Management

and funds advised by Alpha Beteiligungsberatung

GmbH & Co. KG. In 2007 Uster Technologies Ltd

became a public company by listing its shares

on the SIX Swiss Exchange.

Kurzportrait

Uster Technologies AG ist der weltweit führen-

de Hersteller von Hightech-Produkten für die

Qualitätsprüfung und Zertifizierungen in der

Textilindustrie. Das Unternehmen bietet tech-

nologisch anspruchsvolle Systeme und Dienst-

leistungen an, welche die Herstellung von Pro-

dukten in optimaler Qualität auf jeder Stufe der

Textilverarbeitung gewährleisten; von der rohen

Textilfaser wie Baumwolle, Wolle oder synthe-

tischen Garnen bis zum fertigen Gewebe. Die

Uster Gruppe legt Qualitätsstandards fest, die als

Grundlage für den globalen Handel mit Textil-

produkten dienen.

Uster Technologies AG wurde 1875 als Betrieb

für oberirdische Telegrafie in Uster (Schweiz)

gegründet. Seine Selbständigkeit erlangte das

Unternehmen nach der Übernahme der Divisi-

on Zellweger Uster der Zellweger Luwa Gruppe

durch das Management sowie durch von zwei

Private-Equity-Gesellschaften vertretene Fonds.

2006 wurde Uster Technologies AG durch ihr

Management sowie durch von der Alpha Betei-

ligungsberatung GmbH & Co. KG betreute Fonds

erworben. Im Jahr 2007 wurde das Unternehmen

durch die Kotierung seiner Aktien an der SIX

Swiss Exchange zu einer Publikumsgesellschaft.

Knoxville, USA Charlotte, USA

Technology Centers

Regional Service Centers

Representative Offices

São Paulo, Brazil

Worldwide Sales and Support Network

The Group is headquartered in Uster, Switzer-

land, and operates through a worldwide Market

Organization complemented by Technology

Centers. It has sales and service subsidiaries in

the major textile markets and Technology Centers

in Uster (Switzerland), in Knoxville (USA) and in

Suzhou (China). The Swiss, American, and Chinese

facilities are certified according to the ISo 9001

standard. The Uster facility is focused on products

for yarn testing and on fabric quality assurance

whereas the Knoxville facility is focused on prod-

ucts for fiber testing and gin process control. The

Suzhou facility was set up in 2005 and is focused

on low-cost development and assembly opera-

tions as well as allowing the Group to establish a

local supply chain network to complement its

global supply chain management activities.

Weltweites Vertriebs- und Servicenetz

Die Uster-Gruppe hat ihren Hauptsitz in Uster in

der Schweiz und ist mit ihren Technologie-

zentren in Uster (Schweiz), Knoxville (USA) und

Suzhou (China) sowie einer ausgedehnten

Vertriebs- und Serviceorganisation weltweit in

den wichtigsten Textilmärkten vertreten. Die

Technologiezentren in der Schweiz, den USA

und in China sind nach der Norm ISo 9001 zerti-

fiziert. Das Werk in Uster ist auf Produkte für die

Garnprüfung und zur Qualitätssicherung von

Geweben spezialisiert, während sich Knoxville

auf Produkte zur Faserprüfung und Steuerung

des Entkörnungsprozesses konzentriert. Das

Werk in Suzhou wurde 2005 gegründet und kon-

zentriert sich auf kostengünstige Produktent-

wicklungen und Montage. Ausserdem ermög-

licht das Technologie zentrum in Suzhou der

Gruppe die Errichtung eines lokalen Lieferan-

tennetzes, das die weltweiten Aktivitäten im Be-

reich Supply Chain Management ergänzt.

Uster, Switzerland

Adana, Turkey

Bangkok, Thailand

Coimbatore, India

Suzhou, ChinaShanghai, China

São Paulo, Brazil

Osaka, Japan

Table of ContentsInhaltsverzeichnis

Foreword / Vorwort ........................................................................................................................................ 3

Operational Review / Operativer Rückblick ................................................................................................. 10

Outlook / Ausblick ....................................................................................................................................... 18

Corporate Governance ................................................................................................................................ 22

Comment on the Consolidated Financial Statements ................................................................................ 52

USTER Group – Consolidated Financial Statements .................................................................................. 54

USTER Group – Notes to the Consolidated Financial Statements .............................................................. 59

Report of the Statutory Auditor on the Consolidated Financial Statements ............................................. 102

Uster Technologies Ltd – Financial Statements ......................................................................................... 105

Uster Technologies Ltd – Notes to the Financial Statements ..................................................................... 107

Report of the Statutory Auditor on the Financial Statements ................................................................... 113

Information for Investors ........................................................................................................................... 115

Foreword | Vorwort 3

ForewordVorwort

Dear Fellow Shareholders

The theme of this year’s annual report is dedicated to

Uster Technologies Ltd’s approach to its business

typified by the slogan “Think USTER – Think Quality”.

This is credited for the exceptional 2011 results driven

by the Company’s leading position in a high-tech niche

market, steadfast customer orientation and high in-

novation power, underlined by the success of the

newest yarn clearer generation USTER® QUANTUM 3.

Further insight into each of these fundamental

drivers is presented on the image pages separating

the following chapters of this report.

Record Performance on All Levels

In the financial year 2011, Uster Technologies Ltd

achieved excellent performance levels surpassing the

previous highest sales achieved in 2007 before the

combined textile and financial market crisis. Sales of

products and services in all markets, both for textile

laboratories and manufacturing processes, contrib-

uted to these positive developments. New record sales

came from the combined excellent performance of

the new third generation of USTER® yarn clearers and

substantial increases in demand for laboratory yarn

and fiber testing instruments. USTER® QUANTUM 3,

sold through textile machinery manufacturers, meets

the need of textile producers’ to maximize the utiliza-

tion of highly priced cotton by efficiently manufac-

turing yarns with optimal and consistent quality

levels. Exemplary promotional campaigns and train-

ing programs accompanying the product’s introduc-

tion and culminating in the high-profile presentation

to a broad audience at the important ITMA 2011 trade

fair in Barcelona in September fueled strong sales

growth.

Sehr geehrte Aktionärinnen und Aktionäre

Das Thema unseres diesjährigen Geschäftsberichts

ist dem Leitmotiv von Uster Technologies AG gewid-

met, welches durch das Motto „Think USTER – Think

Quality“ verkörpert wird. Damit würdigen wir das

herausragende Geschäftsergebnis 2011. Es basiert auf

der führenden Position des Unternehmens in einem

Hightech-Nischenmarkt, der konsequenten Kunden-

orientierung und der hohen Innovationskraft. Letztere

wird von dem Erfolg der neuesten Garnreiniger-

Generation USTER® QUANTUM 3 zusätzlich unter-

strichen. Weitere Einblicke in diese zentralen Erfolgs-

faktoren vermitteln die Bildseiten zwischen den

einzelnen Kapiteln dieses Geschäftsberichts.

Bestleistung auf allen Ebenen

Im Geschäftsjahr 2011 erzielte Uster Technologies AG

ein ausgezeichnetes Ergebnis. Es übertraf die bishe-

rige Umsatzhöchstmarke aus dem Jahr 2007 vor der

kombinierten Textil- und Finanzmarktkrise. Zu die-

ser positiven Entwicklung trug der Absatz von Pro-

dukten und Dienstleistungen in allen Märkten bei –

sowohl für Textillabors als auch Textilhersteller. Der

neue Umsatzrekord ist auf den grossen Erfolg der

neuen dritten Generation von USTER® Garnreinigern

und den starken Nachfrageanstieg bei Garn- und Fa-

serprüfsystemen für Labors zurückzuführen. Der über

Textilmaschinenhersteller vertriebene USTER® QUAN-

TUM 3 erfüllt die Bedürfnisse von Textilherstellern,

die hochpreisige Baumwolle möglichst optimal zur

effizienten Produktion von Garn konstanter Qualität

einzusetzen. Vorbildliche Werbekampagnen und

Schulungsprogramme, welche die Produkteinführung

begleiteten, fanden ihren Höhepunkt im Auftritt des

Unternehmens vor einem breiten Publikum an der

wichtigen Fachmesse ITMA 2011 im September in

Barcelona. Der erfolgreiche Messeauftritt unterstütz-

te das kräftige Umsatzwachstum weiter.

4 Uster Technologies Ltd | Annual Report 2011

Ongoing Focus on Quality Improvements and

Process Automation

The positive market developments already seen in the

first half of financial year 2011 continued. Demand

for quality measurement and certification products

around the world was maintained at a high level. In

China and India, as well as in additional Asian markets,

the textile industry makes a significant contribution

to gross domestic product (GDP) and therefore con-

tinues to be a beneficiary of well-directed government

programs. Furthermore, the shift to automated pro-

duction in China gained further momentum due to

rising labor costs and in order to optimally use high-

priced raw materials. Producers generally put greater

emphasis on quality aspects as a means of achieving

adequate prices relative to the corresponding quality

and to minimize waste. In the cotton classing market,

the China Fiber Inspection Bureau (CFIB) and United

States Department of Agriculture (USDA) further

accomplished their ongoing expansion and replace-

ment plans.

To the Dawn of a New Era

In November 2011, Toyota Industries Corporation

announced an agreement to buy the remaining shares

of the private equity fund Alpha, thereby reaching

a controlling 50.34% stake in Uster Technologies Ltd’s

share capital. As stipulated by Swiss law and the

Company’s articles of association, Toyota Industries

Corporation shall make a mandatory takeover offer

at an offer price of CHF 44.00 per share for all pub-

Kontinuierlicher Fokus auf Qualitätsverbesserun-

gen und Prozessautomatisierung

Die positiven Marktentwicklungen, die bereits im ers-

ten Halbjahr des Geschäftsjahres 2011 zu beobachten

waren, setzten sich fort. Die Nachfrage nach Quali-

tätsprüfungs- und Zertifizierungssystemen zeigte

sich weltweit ungebrochen hoch. In China und Indien

und weiteren asiatischen Ländern leistet die Textil-

industrie einen wichtigen Beitrag zum Bruttoinland-

produkt (BIP) und wird deshalb durch gezielte staatli-

che Programme gefördert. In China beschleunigten

steigende Lohnkosten und das Bestreben einer opti-

malen Nutzung der teuren Rohstoffe den Automati-

sierungsprozess in der Produktion zusätzlich. Die

Hersteller setzten im Allgemeinen stärker auf Quali-

tätsaspekte, um adäquate Preise für die gewünschte

Qualität zu erzielen und den Ausschuss zu minimie-

ren. Im Bereich der Baumwollklassierung führten

die chinesische Behörde für Faserprüfung (CFIB)

und das US-Landwirtschaftsministerium (USDA) die

Realisierung ihrer laufenden Erweiterungs- und

Austauschpläne fort.

An der Schwelle zu einer neuen Ära

Toyota Industries Corporation gab im November 2011

bekannt, dass sie eine Vereinbarung zum Kauf des

restlichen Aktienpakets des Private Equity-Fonds

Alpha getroffen hat und somit eine Kontrollmehrheit

von 50.34% an der Uster Technologies AG erlangt.

Wie das Schweizer Recht und die Gesellschaftssta-

tuten vorschreiben, wird Toyota Industries Corpo-

ration ein Pflichtangebot zur Übernahme aller aus-

stehenden Namenaktien von Uster Technologies AG

in Höhe von CHF 44.00 pro Aktie vorlegen. Zudem

wird Toyota Industries Corporation als Mehrheits-

aktionär einer Dividende von CHF 2.50 pro Aktie

zustimmen, welche nicht vom Angebotspreis in

Abzug gebracht wird. Der somit angebotene Gesamt-

preis von CHF 46.50 pro Aktie impliziert einen

Eigenkapitalwert von CHF 393 Mio.

Die Textilmaschinen-Division von Toyota Industries

Corporation und Uster Technologies AG sind höchst

erfolgreiche Unternehmen. Sie nehmen führende

Positionen in komplementären Märkten ein. Durch

Max-Ulrich Zellweger, Geoffrey Scott


licly held registered shares of Uster Technologies

Ltd. In addition, as a majority shareholder of USTER,

Toyota Industries Corporation will vote in favour of

a dividend payment of CHF 2.50 per USTER share

and such dividend will not be deducted from the of-

fer price. Thus the total consideration offered to the

shareholders of USTER in the amount of CHF 46.50

per share implies a total equity value for Uster of

CHF 393 million.

The Textile Machinery Division of Toyota Industries

Corporation and Uster Technologies Ltd are highly

successful companies with leading positions in

complementary markets. Thanks to the merger with

Toyota Industries Corporation, Uster Technologies

Ltd will have access to new technologies and market

segments, thereby strengthening its position as the

leader in textile certification and quality control

whilst broadening its coverage of the textile manu-

facturing market.

The Board of Uster Technologies Ltd believes that

the offered total consideration of CHF 46.50 per share

for all publicly held registered shares of Uster Tech-

nologies Ltd, CHF 8.50 above the price initially in-

dicated in November, is fair and in the interests of

both companies and their respective shareholders.

Therefore, the Board of Directors recommends that

shareholders of Uster Technologies Ltd accept the

offer of Toyota Industries Corporation. The combi-

nation of the two companies’ unique portfolios in

terms of technology and market expertise offers great

potential for joint business development opportuni-

ties, from which all stakeholders, including existing

and new customers, business partners and the highly

skilled staff of USTER, are likely to benefit.

den Zusammenschluss mit Toyota Industries Corpo-

ration wird Uster Technologies AG Zugang zu neuen

Technologien und Marktsegmenten erlangen. Dadurch

kann USTER ihre Position als Marktführerin bei

Zertifizierungs– und Qualitätsprüfungssysteme für

die Textilindustrie festigen und ausbauen.

Der Verwaltungsrat von Uster Technologies AG ist

der Ansicht, dass das Angebot in Höhe von insgesamt

CHF 46.50 pro Aktie für alle ausstehenden Namen-

aktien von Uster Technologies AG angemessen ist.

Das Angebot, welches CHF 8.50 pro Aktie über dem

im November ursprünglich gebotenen Preis liegt, ist

fair und wird den Interessen beider Unternehmen und

ihrer jeweiligen Aktionäre gerecht. Deshalb empfiehlt

der Verwaltungsrat den Aktionären von Uster Tech-

nologies AG, das Angebot von Toyota Industries Cor-

poration anzunehmen. Die Kombination der

Portfolios der beiden Unternehmen mit ihren einzig-

artigen Technologien und ihrer Marktexpertise bietet

enormes Potenzial für neue, gemeinsame Geschäfts-

entwicklungsmöglichkeiten. Davon dürften alle

Beteiligten bestehende und neue Kunden, Geschäfts-

partner und die hoch qualifizierten Mitarbeitenden

von USTER gleichermassen profitieren.


Thanks

On behalf of the Board of Directors and the Executive

Committee, we thank all our employees for their strong

commitment and efforts, which allowed the Com-

pany to take advantage of new opportunities and to

leverage and expand the Group’s business activities

worldwide. Special thanks go to Richard Furter (Head

of Textile Technology) who retired after 44 years of

outstanding dedication and service to the Company.

He was a highly respected colleague and friend to many

people in the Company and we wish him all the very

best in his retirement. Harald Rönn (Vice-Chairman

of the Board of Directors), and Thomas Dressendörfer

(CFO), both resigned from their positions during the

course of the reporting period; we thank them for their

contribution to the Company’s current strength and

performance. At the same time we welcome our new

colleagues Thomas Nasiou (Head of Textile Technol-

ogy) and Peter Huber (CFO) to the Group’s Executive

Committee.

We also thank our customers, business partners and

suppliers for their excellent collaboration with our

teams. Finally, we express our thanks to Shareholders

for their confidence and support of the Company in

the past years.

Yours sincerely,

Max-Ulrich Zellweger

Chairman of the Board of Directors

Dank

Im Namen des Verwaltungsrates und der Konzern-

leitung danken wir allen Mitarbeitenden für ihren

grossen Einsatz. Mit ihrem Engagement ermöglichten

sie es dem Unternehmen, neue Chancen zu ergreifen

und die weltweiten Aktivitäten der Gruppe weiter aus-

zubauen. Ein besonderer Dank geht an Richard Furter

(Leiter Textile Technology). Er ist nach 44 Jahren en-

gagierter Tätigkeit und grossen Verdiensten für das

Unternehmen in den Ruhestand getreten. Er ist für

viele im Unternehmen ein äusserst geschätzter Kolle-

ge und Freund, wir wünschen ihm alles Gute in seinem

neuen Lebensabschnitt. Besonders danken möchten

wir auch Harald Rönn (Vizepräsident des Verwaltungs-

rates) und Thomas Dressendörfer (CFO). Beide sind

während des Geschäftsjahres aus dem Unternehmen

ausgeschieden. Sie haben wertvolle Beiträge zur

heutigen Stärke und Leistungsfähigkeit von Uster

Technologies AG geleistet. Gleichzeitig heissen wir

unsere neuen Kollegen Thomas Nasiou (Leiter Textile

Technology) und Peter Huber (CFO) in der Konzern-

leitung herzlich willkommen.

Des Weiteren danken wir unseren Kunden, Geschäfts-

partnern und Lieferanten für die ausgezeichnete Zu-

sammenarbeit mit unseren Teams. Nicht zuletzt

danken wir unseren Aktionären für ihr Vertrauen und

ihre Unterstützung des Unternehmens in den vergan-

genen Jahren.

Mit freundlichen Grüssen

Dr. Geoffrey Scott

Chief Executive Officer

We are the leading high-technology instrument manufacturer of products for quality measurement and certification for the textile industry

Uster Technologies Ltd serves the world’s

textile market, the third-largest market

in the global economy. This dynamic

industry relies on the Company’s offering

for testing and quality control instruments.

Since consumers are becoming more

demanding about the quality of the textile

products they use, manufacturers have

a vested interest in measuring and

monitoring all production processes

throughout every stage of the textile

industry value chain.

Comprehensive expertise and a constant

quest for precision and perfection position

Uster Technologies Ltd as the unrivalled

market leader. USTER offers producers

unique know-how and expertise in

meeting current and future industry

requirements as well as in applying state-

of-the-art technology that enhances

production efficiency, quality excellence

and competitiveness.


2011 reagierten alle wichtigen Märkte positiv auf die

besseren wirtschaftlichen Rahmenbedingungen. Dies

führte zu einer Marktbelebung, wenn auch der Aus-

blick durch die sich in der zweiten Hälfte der Berichts-

periode verschärfende Schuldenkrise eingetrübt

wurde. Sie belastete zunehmend wichtige Volkswirt-

schaften. Diese Entwicklungen nährten neue Ängste

vor einem Inflationsanstieg und dämpften den pri-

vaten Konsum.

Die internationalen Textilmärkte blieben von diesen

Tendenzen unberührt und setzten ihr Wachstum fort.

Die Hersteller stärkten ihren Fokus auf konstant hohe

Qualität der betrieblichen Abläufe und hergestellten

Produkte, um ihre Effizienz zu steigern und den Aus-

schuss zu minimieren und dadurch ihre Gewinne zu

maximieren. Die Märkte in China und Indien verzeich-

neten hohe Zuwachsraten und gaben die Richtung in

der Branche vor. Parallel dazu förderten steigende

Lohnkosten die Umstellung von manuellen Systemen

auf hoch automatisierte und integrierte Produktions-

verfahren. Dies steigerte die Nachfrage nach automa-

tisierter Produktionstechnologie, insbesondere au-

tomatischen Spulmaschinen, und damit auch die

Nachfrage nach Qualitätsmess- und -prüfsystemen.

Auch die lokalen Märkte in China und anderen asia-

tischen Ländern wie Vietnam, Kambodscha und In-

donesien wuchsen weit über dem Branchendurch-

schnitt. Als Reaktion auf die Bedürfnisse dieser

aufstrebenden Märkte baute Uster Technologies AG

ihr Produkt- und Dienstleistungsangebot im mittle-

ren Marktsegment aus und führte neue Qualitätsprüf-

systeme ein. Sie basieren auf den neusten Technolo-

gien und dem grossen Know-how von USTER®.

Neue Rekordumsätze

Uster Technologies AG erzielte im Geschäftsjahr 2011

ein ausgezeichnetes Geschäftsergebnis mit neuen

Rekordumsätzen. Der Bruttoumsatz der Gruppe er-

höhte sich gegenüber dem Vorjahr um 44.9 % auf

CHF 192.5 Mio. (2010: CHF 132.8 Mio.). Insgesamt trugen

die asiatischen Länder 67.6 % zum Gesamtbrutto umsatz

bei (2010: 67.3 %); auf Europa und Amerika entfielen

24.1 % bzw. 8.3 % (2010: 21.7 % bzw. 11.0 %). Das operati-

ve Ergebnis (EBITA) erhöhte sich auf CHF 56.6 Mio.

Operational ReviewOperativer Rückblick

In 2011 all major markets responded positively to the

improving economic environment, leading to increased

levels of business, even though the outlook was blurred

by the intensifying debt crisis affecting major econ-

omies in the second half of the reporting period. These

developments renewed fears of an upcoming inflation

cycle and started to depress consumer spending.

Textile markets worldwide were not yet affected by

these trends and continued to grow. Producers inten-

sified their focus on improving both the level of, and

consistency of quality in their operations and manu-

factured products in order to maximize earnings by

enhancing efficiency and minimizing waste. China

and India performed strongly and set the course

within the industry. In parallel, rising labor costs drove

a switch from manual systems to highly automated

and integrated production processes. The result was

increased demand for automated production machin-

ery, including automatic winding machines, further

boosting the demand for the associated quality mea-

suring and control instruments.

Furthermore, local markets in China and in other Asian

countries such as Vietnam, Cambodia and Indonesia

grew well above the average industry rates. In response

to the needs of these emerging markets Uster Tech-

nologies Ltd expanded its offering and services to the

mid-market segment with new quality control systems

featuring the latest USTER® state-of-the-art technol-

ogy and expertise.

New Record Sales

In the financial year 2011, Uster Technologies Ltd

posted strong performance levels and achieved new

record sales. The Group’s gross sales grew to CHF 192.5

million, an increase of 44.9 % compared to the previ-

ous year result of CHF 132.8 million. Overall sales in

the Asian markets contributed 67.6 % to total gross

sales (2010: 67.3 %); Europe and Americas generated

24.1 % and 8.3 % of total sales (2010: 21.7 % and 11.0 %).

EBITA increased to CHF 56.6 million, 63.7 % above the

CHF 34.6 million reported in financial year 2010. The

EBITA margin improved to the high level of 29.4 %

compared to 26.0 % in 2010 and the net result amount-

ed to CHF 36.2 million, 74.5 % above the CHF 20.8 mil-

Operational Review | Operativer Rückblick 11

und lag damit um 63.7 % über dem Vorjahreswert von

CHF 34.6 Mio. Die EBITA-Marge konnte ebenfalls auf

das hohe Niveau von 29.4 % (2010: 26.0 %) verbessert

werden. Das Nettoergebnis stieg um 74.5 % von

CHF 20.8 Mio. im Jahr 2010 auf CHF 36.2 Mio. im Jahr

2011. Dieses Wachstum ist hauptsächlich auf die Vor-

teile zurückzuführen, die der Gruppe aus ihrer schlan-

ken Organisationsstruktur erwachsen. Der Cashflow

aus operativer Tätigkeit wurde grösstenteils zum

weiteren Abbau der Schulden auf CHF 70.0 Mio. ver-

wendet. Dies unterstreicht die ausgeprägte Fähigkeit

der Gruppe, liquide Mittel zu generieren.

Die Geschäftsleitung hat sich das Ziel gesetzt, weiter-

hin rund 10 % des Gesamtumsatzes in F&E zu investie-

ren, um das nachhaltige Wachstum des Unternehmens

zu sichern. 2011 beliefen sich die F&E-Aufwendungen

auf CHF 18.2 Mio. Dies entspricht einem Umsatzanteil

von 9.4 % (2010: CHF 14.9 Mio.; 11.2 %).

Alle Produktgruppen über den Vorjahres-

ergebnissen

Die höheren Umsätze aller Produktgruppen trugen

zu dem soliden Ergebnis im Geschäftsjahr 2011 bei.

Sie lagen alle deutlich über dem Vorjahresniveau. Der

Absatz an Textilmaschinenhersteller und Produzen-

ten automatischer Spulmaschinen profitierte stark

von der Lancierung der neuen dritten Garnreiniger-

Generation USTER® QUANTUM 3. Das innovative

System kam zu einem günstigen Zeitpunkt auf den

Markt, als die Textilindustrie zu Wachstum zurück-

fand und die Maschinenhersteller und Textilprodu-

zenten wieder in Qualität zu investieren begannen.

Zur Bewältigung der hohen Nachfrage stellten die

USTER-Teams erfolgreich sicher, dass alle verfügba-

ren Ressourcen effizient genutzt wurden. Hierzu

gehörten die Inbetriebnahme und der schnelle Produk-

tionsanlauf neuer automatisierter Fertigungsanlagen.

Sie verbesserten die betrieblichen Abläufe und ermög-

lichten einen erheblichen Produktivitäts- und Flexi-

bilitätsgewinn. Hinzu kamen weitere Verbesserungen

in Bezug auf Qualität, Qualitätskonstanz, Leistung

und Zuverlässigkeit der Produkte. Basierend auf dem

schlanken, flexiblen Geschäftsmodell von USTER,

wirkten sich weiter das kompetente Supply Chain

lion achieved in 2010. This growth was mainly driven

by improved operational leverage based on the Group’s

lean organization. The cash flow from operational

activities was mainly used to pay down debt to

CHF 70.0 million, underlining the Group’s strong

cash generation ability.

Management remains committed to investing around

10 % of total sales in R&D, thereby ensuring continued

sustainable growth of the organization’s operations.

In 2011 expenses for R&D amounted to CHF 18.2 mil-

lion, which corresponds to 9.4 % of total sales (2010:

CHF 14.9 million; 11.2 %).

All Product Groups Above Previous Year Results

Increased sales of all product groups contributed to

the solid results in the financial year 2011 and clearly

exceeded the levels achieved in the prior year. Sales

to textile machinery manufacturers and producers

of automated winding machines were strong thanks

to the launch of the new third generation of USTER®

QUANTUM 3 clearer. This innovative device hit the

markets at a favorable time when the textile industry

was shifting back into a growth gear and new invest-

ments in quality returned to the focus of textile ma-

chinery manufacturers as well as textile producers.

In order to meet the high demand, the USTER teams

successfully organized an efficient use of all available

resources. This included the commissioning and fast

ramp-up of new automated manufacturing systems,

a major step forward in our operations that allows for

significant improvements in productivity and flex-

ibility, along with assuring yet further improvements

in the level and consistency of quality, performance

and reliability of our own products. A further positive

impact arising from the Group’s lean and flexible busi-

ness model is an inherent expertise in supply chain

management and working with outsourcing partners.

Our specialists managed to rapidly build up a com-

pletely new supply chain as well as tooling and qual-

ity processes for the new product group. This was

achieved in spite of some challenges early in the year

with the supply of electronic components resulting

from ‘empty supply streams’ after the crisis along with

some disruptions following the Tsunami in Japan.


Management und die gute Zusammenarbeit mit

Outsourcing-Partnern positiv aus. Die USTER-Spe-

zialisten bauten innerhalb kürzester Zeit eine völlig

neue Lieferkette und die entsprechenden Tooling- und

Qualitätsprozesse für die neue Produktgruppe auf.

Dabei waren sie mit einigen Lieferengpässen und

Unterbrechungen bei elektronischen Bauelementen

Anfang des Jahres nach dem Tsunami in Japan kon-

frontiert. Die Fertigungs- und Supply-Chain-Teams

nahmen diese Herausforderungen an und bemühten

sich akribisch und systematisch, Probleme zu lösen

und die Auswirkungen auf die Produktlieferungen

an die Kunden zu minimieren. Sie verdienen beson-

dere Anerkennung für diesen herausragenden Einsatz.

In den Kundenmärkten stimulierten die hohen Roh-

stoffpreise die Nachfrage nach Qualitätsprüfungs- und

Zertifizierungssystemen. Im Bereich der Baumwoll-

klassierung unterstützte USTER die Erweiterungs- und

Austauschprogramme des US-Landwirtschaftsmi-

nisteriums (USDA) und der chinesischen Behörde für

Faserprüfung (CFIB). Neben diesen Initiativen in den

wichtigen US-amerikanischen und chinesischen

Märkten gewannen die Teams auch Aufträge aus an-

deren Baumwollregionen wie Indien, Afrika und Zen-

tralafrika. Sie trugen zu einer Diversifizierung der

Kundenbasis bei und bestätigen das Vertrauen in

USTER als führendes Unternehmen in der Baumwoll-

klassierung.

Die Nachfrage nach Prüfsystemen, sowohl für Tex-

tillabors als auch für Textilproduzenten, stieg im

Berichtszeitraum weiter an. Die Textilhersteller er-

kannten die Vorteile aus einer effizienten Produktion

in optimaler und konstanter Qualität.

Im Kundenservice stärkte die Uster-Gruppe ihre Be-

ziehungen zu breiten Kreisen von Textilhändlern und

förderte deren Interesse an verschiedenen wertstei-

gernden Dienstleistungen, wie zum Beispiel Intelligent

Sourcing, dem USTERIZED®-Label und den USTER®

STATISTICS. Das After-Sales-Geschäft entwickelte sich

parallel zum Umsatz mit den Prüfsystemen.

These challenges were mitigated through the dili-

gent and systematic focus of our manufacturing and

supply chain teams to resolve issues and to ensure

minimal impact on the supply of products to our cus-

tomers. They deserve special congratulations for their

outstanding efforts.

In our customer markets, high raw material prices

supported demand for quality measurement and cer-

tification products. In the classing business, USTER

further intensified its dedicated support to the expan-

sion and replacement programs of the United States

Department of Agriculture (USDA) and China Fiber

Inspection Bureau (CFIB). Besides these efforts in the

important US and Chinese markets, our teams secured

additional business in further cotton growing markets

such as India, Africa and Central Asia, thereby diver-

sifying the customer base and confirming the trust

in USTER as the authority in cotton classing.

The demand for testing systems, both in textile labo-

ratories and in the manufacturing process, continued

to increase during the reporting period as textile pro-

ducers expressed a need for efficient manufacturing

at optimal and consistent quality levels.

In the customer service business, the Uster Group

strengthened its strong relationships with its wide

textile retailer base, enhancing interest in a number

of value-adding services, including Intelligent Sour-

cing, USTERIZED® certification and USTER® STATIS-

TICS. The after-sales service business was maintained

in line with instrumentation sales.


Demonstration der Marktführerschaft

Uster Technologies AG führte die umfangreichen

Marketing- und Schulungsprogramme für ihre Pro-

duktgruppen fort. Diese Programme wurden speziell

entwickelt, um Kunden einen besseren Einblick in

die Steuerung der Qualität, Produktivität und Ren-

tabilität mit Hilfe von USTER®-Systemen, USTER®

Best Practices und USTER® STATISTICS zu geben. Das

Unternehmen intensivierte auch seine Beziehungen

zu grossen Textilhochschulen in China und veröffent-

lichte ein von Richard Furter verfasstes Fachbuch mit

dem Titel „Textile Measuring Technology and Qua-

lity Control”. Das Buch bringt die allseits anerkannten

Kenntnisse und die grosse Fachkompetenz von Richard

Furter zum Ausdruck.

Uster Technologies AG war 2011 auf zwei bedeutenden

Fachmessen vertreten: der Shanghaitex in China und

der wichtigen ITMA 2011 in Barcelona, Spanien. Die

Marketing- und Technologieexperten von USTER

nutzten die Gelegenheit, das hochkarätige Branchen-

publikum anzusprechen und auf den Mehrwert des

USTER® Produkt- und Dienstleistungsangebots auf-

merksam zu machen. Im Mittelpunkt des Auftritts

an der ITMA 2011 stand die Einführung des neuen

USTER® „Total Testing“-Konzepts unter dem Motto

„From Uncertain Results to Predictable Profits“. Die

Vorteile, die aus dem Total Testing-Ansatz erwachsen,

beruhen auf einer Kombination von Laborprüfung,

Prozessüberwachung und Know-how, die den Tex-

tilunternehmen einzigartige Möglichkeiten zur Op-

timierung ihrer betrieblichen Abläufe und Sicherung

einer nachhaltigen Geschäftsentwicklung eröffnen.

Textilhersteller müssen heute in allen operativen Be-

langen Spitzenleistung erbringen, um kontinuierli-

ches Wachstum und nachhaltige Ergebnisse zu er-

wirtschaften. Dies gelingt nur mit dem richtigen

Gleichgewicht zwischen einer Minimierung der Kos-

ten und konstanter Erfüllung der geforderten Quali-

tät – was eine genaue Kontrolle der Garnqualität er-

fordert.

Demonstrated Leadership

Uster Technologies Ltd continued to offer extensive

promotional and educational programs for its prod-

ucts groups. These programs have been specifically

designed to enhance customers’ understanding of

how to manage quality, productivity and profitabil-

ity with the help of USTER® instruments, USTER®

best practices and USTER® STATISTICS. The Com-

pany also intensified its relationships with major

textile Universities in China, along with publishing

a textbook entitled “Textile Measuring Technology

and Quality Control” written by Richard Furter. This

will represent a proud legacy recognizing his acknowl-

edged know-how and expertise.

Uster Technologies Ltd was present at both important

trade fairs in 2011, the industry fair Shanghaitex in

China and the important ITMA 2011 in Barcelona, Spain.

USTER marketing and technology experts took ad-

vantage of the chance to address high-level industry

audiences and highlight the added value that its prod-

uct and service portfolio offers to customers. At ITMA

2011, the central theme of the Group’s presence was

dedicated to the introduction of the new USTER® To-

tal Testing approach, under the banner “From Uncer-

tain Results to Predictable Profits”. Total Testing is

based on a unique combination of laboratory testing,

process monitoring and know-how and it provides

textile companies with unique possibilities to trans-

form their operations and give the opportunity to

assure the sustainability of their business. Today,

textile producers must excel in all areas of their op-

erations in order to achieve sustainable growth and

results. The essential need is to strike the right balance

between minimizing costs and consistently achieving

the required quality – which demands proper control

of yarn quality.


Am 22. September, zeitgleich mit der Eröffnung der

Fachmesse ITMA 2011, lancierte Uster Technologies

AG ihre neue Unternehmenswebsite. Sie informiert

die Kunden, Branchen- und Geschäftspartner ebenso

wie die Mitarbeitenden und Anleger über die Aktivi-

täten des Unternehmens. Insbesondere vermittelt die

Website den Lesern einen verständlichen Einblick in

das Angebot der Gruppe. Die neue Website wurde von

den verschiedenen Zielgruppen sehr gut aufgenom-

men. Sie alle schätzen die Bemühungen von USTER®

für einen laufenden Dialog und regelmässigen Infor-

mationsaustausch mit dem Ziel, den Mehrwert der

USTER® Produkte und Dienstleistungen weiter zu

optimieren.

On September 22, the same day that the ITMA 2011

trade fair opened its doors, Uster Technologies Ltd

launched its new corporate website. It offers clients,

industry and business partners as well as employees

and investors comprehensive information on the

Company’s activities. In particular, the site provides

readers with an insight into the Group’s offering in a

reader-friendly style. The new website has been re-

ceived very well by the various target groups, all of

which have expressed their appreciation of the Com-

pany’s effort to maintain an ongoing dialogue and

regular exchange of information to optimize the

added value resulting from USTER® products and

services.

We are committed to a comprehensive understanding of all aspects of our customers’ needs.

In today’s challenging textile markets,

companies can no longer rely on just a

few basic skills. To achieve sustainable

results by generating added value for

their customers, they must excel in all

areas of their operation.

The essential need is to strike the right

balance between minimizing costs

and consistently achieving the required

quality. This demands effective and

efficient control of yarn quality.

USTER has developed an unique ap-

proach to this challenge through the

combination of laboratory testing, process

monitoring and know-how. This approach

is called “Total Testing”. It helps textile

companies to transform their business by

turning uncertain results to predictable

profits – thanks to a shift from random

sampling to continuous testing and the

change from varying to consistent and

subjective to objective quality control

throughout the entire textile value chain

from fiber to fabric.


Uster Technologies AG geht gegenwärtig davon aus,

dass die Nachfrage nach Qualitätsprüfungs- und Zer-

tifizierungssystemen zur Sicherung der erreichten

Profitabilität von Textilherstellern anhalten wird.

Ausserdem wird der Fokus auf Prozessoptimierung

sowie Modernisierung und Automatisierung der

Textilproduktion in China als Wachstumstreiber an-

halten. Die Textilindustrie ist bekanntlich eine zyk-

lische Branche und die Lieferanten dieser Industrie

sind sich einig, dass 2012 ein Abschwung im Zyklus

einsetzen wird. Es wird allerdings eine „weichere

Landung“ als in der Krise 2008/2009 erwartet. Die

Geschäftsleitung von USTER schliesst sich dieser

Auffassung an, unter der Annahme, dass es keine

weitere Finanzkrise oder grössere Konjunkturrück-

schläge geben wird. Wie es die Vergangenheit zeigte,

gehört Uster Technologies AG jeweils zu den Letzten,

die von dem Zyklus erfasst werden, und zu den Ersten,

die sich nach dem Tiefpunkt wieder erholen. Die

Geschäftsleitung erwartet 2012 daher einen Umsatz-

rückgang, jedoch unter Aufrechterhaltung der hohen

Profitabilität. Diese Einschätzung wird durch die

Erfahrung der letzten Jahre und die starken finan-

ziellen Ergebnisse untermauert.

Unter der Annahme, dass das Übernahmeangebot

von Toyota Industries Corporation von den Aktionä-

ren von Uster Technologies AG angenommen wird,

dürfte die strategische Zusammenarbeit zwischen

den beiden Unternehmen weiter intensiviert werden.

Die 2009 eingeleiteten Geschäftsentwicklungspro-

jekte zielen darauf ab, Synergien aus den einzigartigen

Technologie-Portfolios und den ausgezeichneten

Marktpositionen in komplementären Branchen-

segmenten zu realisieren und versprechen in naher

Zukunft weiteres Wachstumspotenzial.

Uster Technologies AG ist bestrebt, Textilherstellern

auch künftig einzigartiges Know-how und Fachwis-

sen anzubieten, um die heutigen und künftigen An-

forderungen der Industrie zu erfüllen. Die USTER®

State-of-the-Art-Technologien ermöglichen den Kun-

den, ihrer Produktionseffizienz und Qualitätsstandards

zu verbessern und damit ihre Wettbewerbsfähigkeit

zu stärken.

OutlookAusblick

Uster Technologies Ltd is currently expecting that

the demand for quality measurement and certification

products as a means to sustained profitability for

textile producers will continue. In addition, the focus

on process optimization and the trend for moderniza-

tion and automation of textile production equipment

in China will remain as a driver of growth. The textile

industry is known to be cyclical and the consensus

among the suppliers to the industry is that we will

see a downturn in the cycle in 2012, but more of a soft

landing rather than the crisis that was seen in 2008

– 2009. The management of USTER supports this view,

under the assumption that there is not a further fi-

nancial crisis or major economic disruption. But as

the Company has demonstrated in the past, we will

be one of the last to go into the cycle and one of the

first to come out after recovery. As a result, manage-

ment expects to see a decline in sales in 2012, but strong

profitability will be maintained. Experience gained

over the past years along with a proven track record

of delivering strong financial performance underpins

this view.

Assuming the takeover offer of Toyota Industries Cor-

poration is supported by Uster Technologies Ltd’s

shareholders, it is likely that the strategic collaboration

between the two companies will be further intensified.

The joint business development projects already

initiated in 2009 are targeting synergies arising from

both companies’ unique technology portfolios and

excellent market positions in complementary indus-

try segments and are expected to yield further growth

potential in the near future.

In the future, Uster Technologies Ltd seeks to offer

textile producers unique know-how and expertise in

meeting current and future industry requirements

as well as in applying state-of-the-art technology that

enhances customers’ production efficiency, quality

excellence and competitiveness.

Outlook | Ausblick 19

We strive for innovations that make a difference to our customers.

USTER® QUANTUM 3 represents a new

generation of yarn clearers that calculates

and proposes state-of-the-art settings for

optimal yarn clearing. The new system

bases on the know-how and experience of

the Company’s leadership in the market.

USTER pursued a courageous and

ambitious path in its quest to provide

markets with a major technological

advance. Group’s zero tolerance policy

requested automatic setting in order to

ensure reliable and most efficient yarn

clearing. This set the stage for one of

USTER’s biggest innovations yet – the

illustration of each yarn body based on

data collected by powerful sensors.

The new capacitive and optical sensor

technology visualizes all disturbing

defects, thereby enabling manufacturers to

efficiently sort out all major yarn quality

deviations.


Corporate Governance

The information disclosed in this section follows the Directive on Information Relating to Corporate Governance

issued by the SIX Swiss Exchange and complies largely with the Swiss Code of Best Practice for Corporate Gov-

ernance issued by Economiesuisse. Uster Technologies Ltd (the Company) has implemented these principles

of good corporate governance in its articles of association, its organizational rules and its code of conduct.

All information shown in this section applies to the balance sheet date if not indicated otherwise. Significant

changes between the balance sheet date and the copy deadline of the annual report are listed under “10 Material

Changes since the Balance Sheet Date” at the end of this section.

Further information on Corporate Governance can be found by visiting Uster Technologies Ltd’s website at

www.uster.com/investors

1 Group Structure and Shareholders

1.1 Group Structure

1.1.1 Operational Structure

The operational structure of the Uster Group is illustrated below:

Board of Directors

4 members

Chairman Max-Ulrich Zellweger

Executive Committee

9 membersCEO Geoffrey Scott

Marketing and Business

Development

Reine Wasner

Sales and Service

Harold Hoke

Textile Technology

Thomas Nasiou

Research and Innovation

Rafael Storz

U.S. Operations

Hossein Ghorashi

Asian Operations

Naiming Wei

Order Fulfi llment

Renato Murk

Finance and Support

CFO Thomas F. Dressendörfer(until October 31, 2011)

Peter Huber(starting from January 1, 2012)

Corporate Governance 23

1.1.2 Listed Companies within the Group

Uster Technologies Ltd, Uster, Switzerland, is the parent company of the Uster Group and has been listed

according to the Main Standard of the SIX Swiss Exchange since October 19, 2007. It is the sole listed com-

pany within the Group.

Market capitalization CHF 348,552,000

SIX Swiss Exchange Ticker Symbol USTN

Swiss Security Number 3433153

ISIN CH0034331535

1.1.3 Non-Listed Companies within the Group

The table below shows an overview of the non-listed companies of the Uster Group as of December 31, 2011:

Company Purpose % Capital Shareholdings

Dec 31, 2011

Share Capital in 1,000

Uster Technologies de Mexico S.A. de C.V.(Tlalnepantla, MX) D 100 % MXN 6,250

Uster Technologies GmbH(Neuss, DE) D 100 % EUR 26

Uster Technologies (India) Pvt. Ltd(Bangalore, IN) SC 100 % INR 4,950

Uster Technologies (India) Marketing Pvt. Ltd(Bangalore, IN) S 100 % INR 100

Uster Technologies K.K.(Osaka-fu, JP) SC 100 % JPY 10,000

Uster Technologies (Shanghai) Trading Co. Ltd(Shanghai, CN) S 100 % CNY 5,654

Uster Technologies (Suzhou) Co. Ltd

(Suzhou, CN) TC 100 % CNY 20,185

Uster Technologies Sulamericana Ltda.(Alphaville-Barueri SP, BR) SC 100 % BRL 523

Uster Technologies (Thailand) Ltd(Bangkok, TH) SC 100 % THB 6,000

Uster Technologies Holding (Thailand) Ltd(Bangkok, TH) H 100 % THB 1,000

Uster Technologies, Inc.(Knoxville, US) TC 100 % USD 100

Uster Teknoloji Ticaret A.S.(Istanbul, TR) SC 100 % TRY 50

TC: Technology Center

SC: Service Center

S: Sales Office

H: Holding

D: Dormant


1.2 Significant Shareholders

As of December 31, 2011, 819 shareholders (2010: 880) were registered in the share register of Uster Tech-

nologies Ltd. In the course of 2011 the following disclosure announcements were made according to article

20 et seq. of the Swiss Federal Stock Exchange and Securities Trading Act (SESTA):

• Balfidor Fondsleitung, CH-Basel, informed that its stake in the Company’s share capital decreased to below

3.0 % (published on January 19, 2011).

• Marc Philipp Bär, CH-Zurich, informed that his stake in the Company’s share capital went to below 3.0 %

(published on January 29, 2011).

• The shareholders group around Geoffrey Scott holding 8.1 % of the Company’s share capital changed its

composition (published on February 4, 2011), now including Max-Ulrich Zellweger, CH-Meggen; Barry

James Mulady, UK-East Sussex; Geoffrey Scott, CH-Erlenbach; Thomas F. Dressendörfer, CH-Stäfa; Hos-

sein Ghorashi, US-Knoxville Tennessee; Naiming Wei, CN-Shanghai; Richard Furter, CH-Zug; Rafael Storz,

CH-Kreuzlingen; Deniz Bütüner, CH-Fällanden; Harold R. Hoke, US-Charleston, South Carolina; Renato

Murk, CH-Egg; Reine Wasner, S-Stockholm.

• Balfidor Fondsleitung, CH-Basel, announced that its stake in the Company’s share capital increased to

3.04 % (published on April 7, 2011).

• T. Rowe Price International Inc. informed that its stake in the Company’s share capital decreased to below

3.0 % (published on May 21, 2011).

• Balfidor Fondsleitung, CH-Basel, informed that its stake in the Company’s share capital decreased to below

3.0 % (published on June 7, 2011).

• Toyota Industries Corporation announced that its stake in the Company’s share capital increased to 28.46 %

(published on September 15, 2011).

• Alcide Ltd informed that its stake in the Company’s share capital decreased to 21.88 % (published on Sep-

tember 17, 2011).

• Toyota Industries Corporation announced that its stake in the Company’s share capital increased to 50.34 %

(published on November 9, 2011). The date of transfer of the equity securities is subject to fulfillment or

waiver of closing conditions.

• Alcide Ltd informed that its stake in the Company’s share capital decreased to below 3.0 % (published on

November 12, 2011). The date of transfer of the equity securities is subject to fulfillment or waiver of closing

conditions.

• The shareholders group around Geoffrey Scott holding 8.41 % of the Company’s share capital changed its

composition (published on December 8, 2011), now including Max-Ulrich Zellweger, CH-Meggen; Barry

James Mulady, UK-East Sussex; Geoffrey Scott, CH-Erlenbach; Thomas Nasiou, CH-Uster; Hossein Ghorashi,

US-Knoxville Tennessee; Naiming Wei, CN-Shanghai; Richard Furter, CH-Zug; Rafael Storz, CH-Kreuzlin-

gen; Deniz Bütüner, CH-Fällanden; Harold R. Hoke, US-Charleston, South Carolina; Renato Murk, CH-Egg;

Reine Wasner, S-Stockholm.


The following major shareholders owned more than 3.0 % of the share capital of Uster Technologies Ltd as

of December 31, 2011:

• Toyota Industries Corporation 50.3 % 1)

• Board and Management Group 2) 8.4 %

1) The date of transfer of the equity securities is subject to fulfillment or waiver of closing conditions, not

fulfilled at the balance sheet date.2) Part of Board and Management formed a Group for purchase and sale of shares

1.3 Cross-Shareholdings

Uster Technologies Ltd does not have any cross-shareholdings with other companies.

2 Capital Structure

2.1 Ordinary Share Capital

The ordinary share capital of Uster Technologies Ltd as of December 31, 2011, amounted to CHF 79,524,000

and was fully paid up. It consisted of 8,460,000 registered shares with a nominal value of CHF 9.40 each.

The authorized share capital of Uster Technologies Ltd as of December 31, 2011, amounted to CHF 17,860,000

(details see below, 2.2).

The conditional share capital of Uster Technologies Ltd as of December 31, 2011, amounted to CHF 7,708,000

(details see below, 2.2).

2.2 Authorized and Conditional Share Capital

As of December 31, 2011, Uster Technologies Ltd had an authorized share capital of CHF 17,860,000. Accord-

ing to the articles of association of Uster Technologies Ltd, the Board of Directors is authorized, at any time

until March 30, 2012, to increase the share capital by an amount not to exceed CHF 17,860,000 through the

issuance of up to 1,900,000 fully paid registered shares with a nominal value of CHF 9.40 each. An increase

in partial amounts is permitted.

The Board of Directors determines the issue price, the type of payment, the date of issue of new shares, the

conditions for the exercise of pre-emptive rights and the beginning date for the dividend entitlement. In this

regard, the Board of Directors may issue new shares by means of a firm underwriting through a banking

institution, a syndicate or another third party with a subsequent offer of these shares to the current share-

holders (unless the pre-emptive rights of current shareholders are excluded). The Board of Directors may

permit pre-emptive rights that have not been exercised to expire or it may place these rights and/or shares

as to which pre-emptive rights have been granted but not exercised, at market conditions or use them for

other purposes in the interest of Uster Technologies Ltd.

The subscription and acquisition of the new shares, as well as each subsequent transfer of the shares, shall

be subject to the restrictions mentioned under “2.6 Limitations on Transferability and Nominee Registra-

tions”. The Board of Directors is authorized to restrict or exclude the pre-emptive rights of shareholders and

allocate such rights to third parties if the shares are to be used (a) for the acquisition of enterprises, parts of

an enterprise or participations, or for new investments, or, in case of a share placement, for the financing

or refinancing of such transactions; or (b) for the purpose of the participation of strategic partners (includ-

ing in the event of a public tender offer) or for the purpose of an expansion of the shareholder constituency

in certain investor markets or in connection with the listing of the shares at domestic or foreign exchanges,

including for the purpose of the delivery of shares to the involved banks in case of the over-allotment option.


As of December 31, 2011, Uster Technologies Ltd had a conditional share capital, pursuant to which the

share capital may be increased by a maximum aggregate amount of CHF 7,708,000 through the issuance

of a maximum of 820,000 fully paid registered shares with a nominal value of CHF 9.40 each by the

exercise of option rights which the employees, the Management or Directors of Uster Technologies Ltd

or another Group company may be granted in the future pursuant to one or several regulations of the

Board of Directors. The pre-emptive rights of the shareholders are excluded.

The acquisition of registered shares through the exercise of option rights and the subsequent transfer

of the registered shares are subject to the transfer restrictions mentioned under “2.6 Limitations on

Transferability and Nominee Registrations”.

2.3 Changes in Share Capital

March 29, 2011 The conditional share capital was increased from CHF 3,008,000 to CHF 7,708,000 by

amending article 3b of the articles of association.

March 30, 2010 New authorized share capital was created in the amount of CHF 17,860,000 including

the authorization to increase the share capital until March 30, 2012 by amending article

3a of the articles of association.

November 2, 2009 The ordinary share capital was increased from CHF 61,664,000 to CHF 79,524,000 by

the issuance of 1,900,000 registered shares with a nominal value of CHF 9.40 each. The

new shares were issued from the Company’s authorized share capital to Toyota Indus-

tries Corporation at a price of CHF 23.09 per share, representing a premium of 10 % over

the volume-weighted average share price of the last 30 trading days prior to the capital

increase.

March 31, 2009 New authorized share capital was created in the amount of CHF 17,860,000 with the

authorization to increase the share capital until March 31, 2011 by amending article 3a

of the articles of association.

2.4 Shares and Participation Certificates

2.4.1 Shares

Each of Uster Technologies Ltd’s 8,460,000 registered shares has a nominal value of CHF 9.40 and each share

recorded and registered under a shareholder’s name in the share register of Uster Technologies Ltd is entitled

to one vote. There are no preferential rights for individual shareholders and all shareholders are entitled to

equal dividends.

On January 1, 2009, the new Swiss Federal Act on Intermediated Securities (FISA) became effective. Uster

Technologies Ltd created the uncertificated securities book (Wertrechtebuch) pursuant to Art. 973c of the

Swiss Code of Obligations. In addition the shares of Uster Technologies Ltd are registered with the SIX

SIS AG and qualify as intermediated securities in accordance with the FISA.


2.4.2 Participation Certificates

Uster Technologies Ltd has not issued any participation certificates.

2.5 Profit Sharing Certificates

Uster Technologies Ltd has not issued any profit sharing certificates.

2.6 Limitations on Transferability and Nominee Registrations

2.6.1 Limitations on Transferability

Acquirers of registered shares will be recorded in the share register as shareholders with the right to vote,

provided they explicitly declare to have acquired these registered shares in their own name and for their own

account.

2.6.2. Nominee Registrations

Nominees are persons or entities who do not expressly declare in the application form to hold the shares for their

own account and with whom the Board of Directors has entered into the according contractual agreements.

According to the articles of association, the Board of Directors may record nominees in the share register

with voting rights for shares up to a maximum of 3.0 % of the outstanding nominal share capital. Shares held

by a nominee that exceed this limit are only registered in the share register with voting rights if such nomi-

nee declares in writing to disclose name, address and shareholding of any person or legal entity for whose

account it is holding 1.0 % or more of the outstanding share capital.

Legal entities and associations or other partnerships or communities of joint owners that are linked by

capital, voting power, management or in other manner as well as all persons, legal entities and partnerships

that are acting in concert with a view to circumvent the restrictions on nominee registration (especially as

a syndicate) are deemed to be one nominee.

2.7. Convertible Bonds and Warrants/Options

Uster Technologies Ltd has not issued any convertible bonds, warrants or options. Uster Technologies Ltd

has a Restricted Stock Unit (RSU) plan, the essentials of which are set forth under “5 Compensation, Share-

holdings and Loans”.


Board of Directors

Members of the Board of Directors

Max-Ulrich Zellweger

1941, Swiss

Chairman

Elected in 2003

Elected until 2013

Barry James Mulady

1947, British

Member

Elected in 2003

Elected until 2012


3 Board of Directors

3.1 Members of the Board of Directors

The following information sets forth the name, year of birth, function, election and directorship term of

each Member of the Board of Directors, all of whom except for Geoffrey Scott are non-executive directors,

followed by a short description of each Member’s business experience, education and activities.

Max-Ulrich Zellweger, Chairman of the Board of Directors

Max-Ulrich Zellweger has been a Member of the Board of Directors of Uster Technologies Ltd since 2003 and

is elected until 2013. Between 1987 and 1992 he was Area Manager Asia Pacific of Schindler Elevators Co. and

in this function responsible for the subsidiaries and joint ventures of Schindler in China, Japan, India, Hong

Kong and other Asian countries. He is now Managing Partner of Pacific Consult Ltd, a Zurich and Shanghai

based business consultant specialized on business development in Asia, established in 1992 by Max-Ulrich

Zellweger with some partners. He frequently lectures on Asia-related topics at universities and Executive

MBA courses. Furthermore, he is Chairman of the Board of Directors of Fr. Sauter Holding AG and a Member

of the Board of Directors of Fr. Sauter AG, Bartec GmbH (Germany) and Pacific Consult Ltd. Max-Ulrich

Zellweger holds a Master’s degree in Mechanical Engineering of the Swiss Institute of Technology (ETH) in

Zurich. He was born in 1941 and is a Swiss citizen.

Dr. Barry James Mulady, Member of the Board of Directors

Barry James Mulady has been a Member of the Board of Directors of Uster Technologies Ltd since 2003 and is

elected until 2012. He has been Chairman of PageOne Communications Ltd, London, England, since 2000 and

is Chairman of ipTEST Ltd, Guildford, England. From 2000 to 2006, he served as a non-executive Director of

Tellermate plc, Newport, Wales and Sensima Ltd, London. From 1996 to 1999 he was CEO of Airtech plc,

Aylesbury, England. Prior to that he served as President of Fisons Instruments Europe and CEO of VG Instru-

ments plc. He has broad experience in general management, mergers and acquisitions and business develop-

ment. Barry James Mulady earned a First Class Honours Degree in Physics and a PhD in Nuclear Magnetic

Resonance from the University of Nottingham. He was born in 1947 and is a British citizen.


Akira Onishi

1958, Japanese

Member

Elected in 2010

Elected until 2013

Geoffrey Scott

1954, British

Member

Elected in 2003

Elected until 2013

Board of Directors

Members of the Board of Directors


Akira Onishi, Member of the Board of Directors

Akira Onishi has been elected a Member of the Board of Directors of Uster Technologies Ltd in 2010 for a

period of three years until 2013 and acts as representative of Toyota Industries Corporation. He started his

carrier as sales and marketing manager in the textile machinery division of Toyota Industries Corporation

in 1981. Later he was active in various management functions mainly in Corporate Planning. Akira Onishi

currently holds the positions of Senior Managing Director, Member of the Board, Corporate Planning and

Head of Textile Machinery Business Unit. Akira Onishi earned a degree in law from Nagoya University, Japan.

He was born in 1958 and is a Japanese citizen.

Dr. Geoffrey Scott, Member of the Board of Directors and Chief Executive Officer

Geoffrey Scott has been a Member of the Board of Directors and CEO of Uster Technologies Ltd since 2003

and is elected until 2013. He was Chief Executive Officer of the Zellweger Uster Division of Zellweger Luwa,

Uster, Switzerland, from 1999 to 2003. Prior to that he held Senior Management positions at Kevex Instru-

ments, Fisons plc (Scientific Instruments Division) and Beckman Instruments. He has broad experience of

strategy and business development, sales, marketing and after-sales, product development and general

management. He was a Member of the Board of Directors of Maillefer SA until January 12, 2011. Geoffrey Scott

earned a BSc Honours degree in Biochemistry from the University of Liverpool, and a PhD in Biochemistry

from the University of Nottingham. He was born in 1954 and is a British citizen.

During the reporting period, Harald Rönn, member of the Board of Directors of the Uster Technologies Ltd

since 2006 and representative of the private equity fund Alpha, resigned from the Board as per June 30, 2011

to prevent any potential conflicts of interest following Alpha’s announcement to acquire the parent com-

pany of a competitor of Uster Technologies Ltd.

3.2 Independence of the Board of Directors

None of the non-executive Members of the Board of Directors has been a Member of the Executive Commit-

tee of Uster Technologies Ltd or its subsidiaries during the past three years and there are no significant

business connections between Uster Technologies Ltd and its subsidiaries and the non-executive Members

of the Board of Directors.

In his function of a Managing Partner of Pacific Consult Ltd Max-Ulrich Zellweger advises the Company on

certain business issues related to China. Also, Barry James Mulady sometimes delivers consulting services

to the Company. However, the scope of these consultancy services is not significant.

The Members of the Board of Directors do not have any activities and functions outside Uster Technologies

Ltd that would compromise their independence.


3.3 Elections and Terms of Office

The articles of association of Uster Technologies Ltd provide that the Board of Directors may consist of a

minimum of three Members and a maximum of nine Members. Members of the Board of Directors are ap-

pointed and removed exclusively by shareholders’ resolution. The elections are held individually. Their

maximum term of office is three years, re-election is allowed.

3.4 Internal Organization

3.4.1 Duties and Operating Principles of the Board of Directors

The Board of Directors is entrusted with the ultimate direction of Uster Technologies Ltd and the supervision

of the Executive Committee. The Board of Directors’ non-transferable and irrevocable duties include the

following:

• The ultimate direction of the Company and the Group and the issuance of the necessary directives;

• The determination of the organization of the Company, including the adoption and revision of the or-

ganizational rules;

• The organization of the accounting system, the financial control as well as the financial planning;

• The appointment and dismissal of the persons entrusted with the management of the Company as well as

the determination of the signatory power;

• The ultimate supervision of the persons entrusted with the management of the Company, specifically, in

view of their compliance with the law, the articles of association, organizational rules and directives;

• The preparation of the annual report and the Shareholders’ meeting as well as the implementation of the

resolutions adopted by the meeting of Shareholders;

• The passing of resolutions regarding the supplementary contribution for shares not fully paid up and of

the corresponding amendments to the articles of incorporation;

• The passing of resolutions concerning an increase in share capital to the extent that such power is vested

in the Board of Directors and of resolutions concerning the confirmation of capital increases and cor-

responding amendments to the articles of incorporation as well as making the required report on the

capital increase;

• The non-delegable and inalienable duties and powers of the Board of Directors pursuant to the Merger Act

and any other law;

• The notification of the judge in case of over-indebtedness of the Company;

• The adoption of, and any amendments or modifications to, any equity incentive plan, stock option agree-

ment, restricted stock purchase agreement, etc.;

• The decision regarding entering into any financing arrangement in excess of CHF 10.0 million including

loan agreements, credit lines, letters of credit or capitalized leases;

• The issuance of convertible debentures with option rights or other financial market instruments;

• The approval of the business strategy and the approval and adoption of the budget of the Company;

• The approval of any transaction exceeding the amount of CHF 10.0 million which is not in accordance with

the budget.


According to the current organizational rules enacted by the Board of Directors, the Board of Directors meets

at the invitation of the Chairman, or in the Chairman’s absence, the Vice-Chairman or the Secretary on their

behalf. In addition, any other Member of the Board of Directors can by stating the reasons and the items to

be placed on the agenda, request the Chairman in writing, to convene a meeting. The Board of Directors meets

regularly and as often as the Company’s business requires a meeting but in any event at least six times per

calendar year. Resolutions of the Board of Directors are passed by way of simple majority of the vote cast. In

the case of a tie the Chairman has a casting vote. To pass a resolution validly, the majority of the Members of

the Board of Directors have to attend the meeting.

The Chairman, after consultation with the Chief Executive Officer, determines the agenda for the Board

meetings. Any Member of the Board of Directors may request the inclusion of further items of business in

the agenda. All Members of the Board receive written information on the agenda items before the meeting

in order to be well prepared. The Board of Directors consults external experts where necessary when discuss-

ing specific topics.

In 2011 the Board of Directors held the following meetings:

Number of meetings: 7

Average meeting time (hours): 3

Attendance of Members of the Board of Directors (Meetings):

Max-Ulrich Zellweger 7

Barry James Mulady 7

Akira Onishi 5

Harald Rönn 1) 3

Geoffrey Scott 7

1) Stepped down from his function as of June 30, 2011


3.4.2 Committees of the Board of Directors

The Board of Directors has established two committees to further strengthen the corporate governance

structure. The Members of these committees are appointed, as a rule, for the entire duration of their mandate

as Director and are re-eligible. The committees constitute themselves each year at the first meeting after the

annual meeting of shareholders. In discharging their responsibilities the committees have unrestricted ac-

cess to the Company’s and the Management’s books and records.

Audit Committee

According to the Board regulations, the Audit Committee must be composed of two non-executive and in-

dependent Directors. It currently consists of Max-Ulrich Zellweger and Barry James Mulady and meets as

often as necessary. Usually there will be at least two meetings a year, one for the review of the budget and

one for the review of the year-end closing. Furthermore, the audit scope, the audit plan and the audit focus

points for the year-end closing are presented in such meetings. The audit committee asks the auditors to

present their findings of the year-end closing. Other audit findings either by an external consultant or by

the internal audit team are presented on a case by case basis.

In 2011 the Audit Committee held the following meetings:



Attendance of Members of the Audit Committee (Meetings):


Barry James Mulady 1) 1

Harald Rönn 2) 1

1) Elected to the Committee as of December 15, 20112) Resigned from the Board as of June 30, 2011


The Audit Committee assists the Board of Directors in fulfilling its duties of supervision of the Executive

Committee. It has the following powers and duties:

• To review and assess the effectiveness of the statutory auditors, in particular their independence from the

Company;

• To review and assess the scope and plan of the audit, the examination process and the results of the audit

and to examine whether the recommendations issued by the auditors have been implemented;

• To review the auditors’ reports and to discuss their contents with the auditors and with the Executive Com-

mittee;

• To assess the risk assessment established by the Executive Committee and the proposed measures to reduce

risks;

• To assess the state of compliance with norms within the Company;

• To review in cooperation with the auditors, the CEO and the CFO whether the accounting principles and

the financial control mechanism of the Company and its subsidiaries are appropriate in view of the size

and complexity of the Group;

• To review the annual and interim statutory and consolidated financial statements intended for publication.

It should discuss these with the CEO, the CFO and with the head of the external audit;

• The Audit Committee regularly reports to the Board of Directors on its findings and proposes appropriate

actions.

Nomination and Compensation Committee

According to the Board Regulations, the Nomination and Compensation Committee must be composed of

non-executive and independent Directors. It currently consists of Max-Ulrich Zellweger and Barry James

Mulady and meets as often as necessary.

In 2011 the Nomination and Compensation Committee held the following meetings:



Attendance of Members of the Compensation Committee (Meetings):


Barry James Mulady 2

Harald Rönn 1) 1

1) Resigned from the Board as of June 30, 2011


The Nomination and Compensation Committee assists the Board of Directors in fulfilling its duties of su-

pervision of the Executive Committee. It has the following powers and duties:

• To assure the long-term planning of appropriate appointments to the position of the CEO and to the Board

of Directors;

• To nominate candidates to fill the vacancies on the Board of Directors or the position of the CEO;

• To make recommendations on the composition and balance of the Board of Directors;

• To review and assess on a regular basis the remuneration system of the Company and the Group (including

the management incentive plans) and to make a proposal to the Board of Directors;

• To recommend the terms of employment, in particular the remuneration package of the CEO, and to make

proposals in relation to the remuneration of the Members of the Board of Directors;

• To recommend upon proposal of the CEO the terms of employment, in particular the remuneration pack-

age, of employees reporting directly to the CEO as well as review matters related to the compensation of

other top managers as well as the general employee compensation and human resource practices of the

Company;

• To make recommendations on the grant of options or other securities under any management incentive

plan of the Company.

The Nomination and Compensation Committee regularly reports to the Board of Directors on its findings

and proposes appropriate actions.

3.5 Areas of Responsibilities

In accordance with the law, the articles of incorporation and the organizational rules the Board of Directors

has delegated the Company’s operational management to Geoffrey Scott, the CEO of Uster Technologies Ltd.

Together with the Executive Committee he is responsible for the overall management of the Uster Group.

The CEO has all the powers and duties that are not explicitly reserved to the Board of Directors or a Board

Committee as mentioned above. In particular, the CEO has the following powers and duties:

• The provision of all information and documents necessary to the Board of Directors;

• The implementation of the resolutions passed by the Board of Directors;

• The organization, management and control of the day-to-day business of the Company;

• The proposal to the Board of Directors for the approval of transactions to be resolved by the Board of

Directors;

• The proposal to the Board of Directors for the appointment and dismissal of Members of the Executive

Committee;

• The organization of the Executive Committee and the preparation, calling and presiding the meetings of

the Executive Committee.


3.6 Information and Control Mechanisms

Board of Directors

The Board of Directors recognizes the importance of receiving sufficient information from the Executive

Committee to fulfill its supervisory duty and to make the decisions that are reserved to the Board of Direc-

tors. It has the following means to monitor the responsibilities it has delegated to the Executive Committee:

• The CEO of the Group is a Member of the Board of Directors and informs the Board in every meeting about

the current development of the business. Additionally, the CFO serves as the secretary of the Board and

also participates in every meeting. Other Members of the Executive Committee are invited to attend Board

meetings to report on their areas of responsibility as deemed necessary by the Board.

• The minutes of the Executive Committee Meetings are made available to the Chairman of the Board.

• Informal meetings are held as required between Board Members and the CEO.

• The Board of Directors receives on a monthly basis the consolidated income statement, balance sheet and

cash flow statement of the Uster Group together with a detailed comment on the course of the business.

The Board of Directors does not have direct access to the Management Information System of the Com-

pany, but is informed about the content and is entitled to request any kind of information at any time.

• Risk management and monitoring procedures are evaluated at regular intervals by the Board of Directors.

Risk management is part of the management process which is defined within the management handbook.

All risks / groups of risks are assigned to the process owners of the business processes containing the spe-

cific risk. Strategic risks are directly assigned to the Executive Management Team. The process owners

supervise the risks / group of risks and propose process changes if the risks take unexpected developments.

The process changes are approved by the Executive Management Team. The risk management process is

reviewed at least once a year by the Board of Directors.

Board Committees

The Board Committees, especially the Audit Committee, invite external consultants to review the business

and better understand the laws and policies impacting the Company. It also is in regular contact with the

internal audit team following its work and informing itself. In addition the CEO, the CFO and the represen-

tative of the external auditors will be invited to the meetings of the Audit Committee.


Executive Committee

Members of the Executive Committee

Geoffrey Scott

1954, British

Chief Executive Officer

Member since 2003

Peter Huber

1966, Swiss

Chief Financial Officer

Member since 2012


4 Executive Committee

4.1 Members of the Executive Committee

The following information sets forth the name, year of birth, nationality and function of each Member of

the Executive Committee, followed by a short description of each Member’s business experience, education

and activities.

Dr. Geoffrey Scott, Member of the Board of Directors and Chief Executive Officer

Geoffrey Scott has been a Member of the Board of Directors and CEO of Uster Technologies Ltd since 2003

and is elected until 2013. He was Chief Executive Officer of the Zellweger Uster Division of Zellweger Luwa,

Uster, Switzerland, from 1999 to 2003. Prior to that he held Senior Management positions at Kevex Instru-

ments, Fisons plc (Scientific Instruments Division) and Beckman Instruments. He has broad experience of

strategy and business development, sales, marketing and after-sales, product development and general

management. He was a Member of the Board of Directors of Maillefer SA until January 12, 2011. Geoffrey Scott

earned a BSc Honours degree in Biochemistry from the University of Liverpool, and a PhD in Biochemistry

from the University of Nottingham. He was born in 1954 and is a British citizen.

Thomas F. Dressendörfer, Chief Financial Officer, Finance and Support (until October 31, 2011)

Thomas F. Dressendörfer was appointed to the CFO position of Uster Technologies Ltd as of October 1, 2008.

He left the Company as of October 31, 2011 to pursue a new professional challenge. Thomas Dressendörfer

took responsibility to lead the Finance and Support Team in Uster, including IT, and reported as member of

the Executive Management Committee directly to the CEO. Prior to his tasks at Uster Technologies Ltd

Thomas F. Dressendörfer worked with Randstad, The Nielsen Company and Procter & Gamble, where he held

various key senior finance positions. He has extensive experience of leading high performing Finance teams

as well as experience of working with Finance groups internationally. Thomas F. Dressendörfer holds a

Master’s Degree in Business Administration and Economics from the University of Erlangen-Nuremberg

in Germany. He was born in 1958 and is a German citizen.

Peter Huber, Chief Financial Officer, Finance and Support (as of January 1, 2012)

Peter Huber has been appointed to the CFO position of Uster Technologies Ltd as of January 1, 2012. He takes

responsibility to lead the Finance and Support Team in Uster, including IT, and reports as member of the

Executive Management Committee directly to the CEO. Prior to joining the Company, he worked for Pago

International Ltd, a full-range supplier of labels and labeling technology, where he acted as Chief Financial

Officer and a member of the Group Executive Board. Peter Huber also held CFO positions with the Keystone

Group and with Landolt Group, a leading manufacturer of non-woven textile products. He started his profes-

sional career with KPMG Financial Advisory Services and UBS Commercial Banking. Peter Huber graduated

in Business Administration at the University of Zurich and holds an Executive Master in Corporate Finance

from Lucerne University. He was born in 1966 and is a Swiss citizen.


Naiming Wei

1962, German

Head of Asian Operations

Member since 2006

Executive Committee


Hossein Ghorashi

1945, American

Head of U.S. Operations

Member since 2003

Thomas Nasiou

1970, Greek

Head of Textile Technology

Member since 2011


Hossein Ghorashi, Head of U.S. Operations

Hossein Ghorashi has been Head of U.S. Operations since 2003. From 1990 through 2002 he held the positions

of Senior Vice President of R&D and Head of Zellweger Uster Inc. He was with Special Instruments Labora-

tory from 1969 through 1989 and was Vice President of R&D for the last 10 years. He holds a BS and a MS in

Electrical Engineering from the University of Tennessee, Knoxville TN, United States. He is a co-inventor of

18 fiber testing patents, author of numerous papers and presents the Company’s latest innovations in im-

portant international conferences. He is known and referred to as a cotton fiber testing expert worldwide.

Hossein Ghorashi was born in 1945 and is an American citizen.

Dr. Naiming Wei, Head of Asian Operations

Naiming Wei has been a Member of the Management and Head of Asian Operations of Uster Technologies

Ltd since 2006. From 2000 to 2005 he was General Manager at Shanghai Sachs Huizhong Shock Absorber Co.

Ltd, a joint venture company between the German automotive supplier ZF-Sachs Ltd and Shanghai Automo-

tive Industry Corporation. Prior to that, Naiming Wei worked as management consultant at Management

Engineers GmbH for large and middle size multinational clients in Germany, in the UK and in Switzerland.

From 1993 to 1997 he was Sales and Marketing Manager and Purchasing Manager at Siemens Ltd, Business

Division Private Communication Systems. Naiming Wei holds a Master’s degree (Dipl.-Ing.) and a PhD degree

(Dr.-Ing.) in Electrical Engineering from the University Erlangen-Nuremberg in Germany. He was born in

1962 and is a German citizen.

Richard Furter, Head of Textile Technology (until May 31, 2011)

Richard Furter was Head of Textile Technology of Uster Technologies Ltd since 2003. In spring 2011 he ex-

pressed his desire to take retirement at the end of 2011. Prior to his tasks at Uster Technologies Ltd he worked

for Zellweger Uster Ltd since 1967 where he was an electronic engineer in R&D and was particularly involved

in sensor technology and signal processing. In this role he filed various patents. Richard Furter graduated

as an electronic engineer (currently Lucerne University of Applied Sciences and Arts). He was born in 1943

and is a Swiss citizen.

Thomas Nasiou, Head of Textile Technology (as of June 1, 2011)

Thomas Nasiou has been appointed to the position as Head of Textile Technology of Uster Technologies Ltd

as of June 1, 2011. He joined Uster Technologies Ltd as a Textile Technologist in 2006 and held positions in

Product Management and Head of Marketing in China. He has extensive experience within the textile indus-

try, holding key senior management positions, including Mill Manager and Quality Control Manager at

Selected Textiles in Greece, as well as positions in R&D and Technical Support at Viochrom Dyestuffs SA in

Greece. Thomas Nasiou holds a Textile Technologist degree from the Technological Institute of Athens in

Greece and a Master of Business Administration (MBA) from the Hellenic Management Association (H.M.A.).

He was born in 1970 and is Greek citizen.


Executive Committee


Rafael Storz

1967, German

Head of Research and

Innovation

Member since 2006

Reine Wasner

1970, Swedish

Head of Marketing and

Business Development

Member since 2011


Dr. Rafael Storz, Head of Research and Innovation

Rafael Storz has been a Member of the Management since 2006. From 2001 to 2006 he was a Member of the

Management and Head of R&D of Leica Microsystems CMS GmbH, Wetzlar, Germany. From 1998 to 2001 he

was a project manager and deputy head of the R&D department at Leica Microsystems Heidelberg GmbH,

Germany. He is experienced within strategy and business development and product development. He is a

(co-)inventor of 72 patents in the field of measurement equipment and analysis tools. Rafael Storz earned a

PhD in Physics from the University of Konstanz, Germany. He was born in 1967 and is a German citizen.

Reine Wasner, Head of Marketing and Business Development

Reine Wasner has been appointed to the position as Vice-President of Marketing and Business Development

as of January 1, 2011. Prior to joining the company, he worked for more than ten years in management con-

sulting including Booz Allen Hamilton, Arthur D. Little and A. T. Kearney. He has experience in the areas of

strategy development, market and business development and innovation management across a wide range

of industries, including projects for Uster Technologies Ltd. Reine Wasner holds a Master of Science in

Mechanical Engineering from the Technical University of Lund, a Master of Business Administration from

the University of Lund as well as a three year research degree from the University of Linköping (all in Sweden)

in collaboration with MIT in Boston (USA). He was born in 1970 and is a Swedish citizen.


Harold R. Hoke

1954, American

Head of Sales and Service

Member since 2003

Executive Committee


Renato Murk

1956, Swiss

Head of Order Fulfillment

Member since 2003


Harold R. Hoke Jr., Head of Sales and Service

Harold Hoke has been Head of Sales and Service of Uster Technologies Ltd since 2003. He rejoined Uster

Technologies Ltd in 2002 after almost two years as CEO of Savio America. Harold Hoke originally joined

Zellweger Uster Ltd in 1980 in the U.S. operation. In 1996 he was based in the Company’s Swiss headquarters

and was initially responsible for Sales and Service Asia, later responsible for the companies’ worldwide sales

and service organization including all small subsidiary companies. Harold Hoke has experience in sales,

marketing, service, business development, production management and strategy development. Harold Hoke

holds a BS from Clemson University. He was born in 1954 and is an American citizen.

Renato Murk, Head of Order Fulfillment

Renato Murk has been Head of Order Fulfillment of Uster Technologies Ltd since 2003, a position which

includes the worldwide responsibility for the production processes and supply chain management. From

1999 to 2003 he was responsible for production and logistics of the Zellweger Uster Division of Zellweger

Luwa Ltd. From 1996 to 1999, he was a Manager of Product Assembly Lines at Zellweger Uster. Renato Murk

holds a Master of Industrial Engineering degree from the Swiss Federal Institute of Technology (ETH) with

the majors Process Engineering and Business Administration. Besides significant experience in general and

production management he has executed several efficiency and cost-improving programs as a senior con-

sultant in a Swiss-based management consultancy. He was born in 1956 and is a Swiss citizen.

4.2 Other Activities and Vested Interests

There are no further activities of vested interests of the Members of the Executive Management except the

ones mentioned above.

4.3 Management Contracts

The Board of Directors has not delegated any management tasks to third parties outside the Company.


5 Compensation, Shareholdings and Loans

5.1 Content and Method of Determining the Compensation and the Share-Ownership Programs

5.1.1 Compensation Design

The compensation policy of Uster Technologies Ltd is designed to provide simple and clearly structured

salary systems that ensure fair remuneration and are transparent to employees. Salary levels are geared

relative to salaries in the local markets and are reviewed at regular intervals using different remuneration

studies available on the market. Individual compensation is determined by the specifications of the position,

competencies and experience, performance and the Group’s business success. Where possible, results- and

performance-driven compensation systems are employed that include a results-related variable component.

5.1.2 Board of Directors

The remuneration of the Members of the Board of Directors consists of an equal payment in cash for the

ordinary Board Members. The remuneration for the Chairman of the Board of Directors is determined by

taking into account his respective responsibility, experience and the time which he invests in his activity as

Chairman. Extraordinary assignments or work which a Director accomplishes outside of his activity as a

Director is specifically remunerated. Such remuneration has to be approved by the Board of Directors. In

addition, the Directors are reimbursed all reasonable cash expenses properly incurred by them in the dis-

charge of their duties, including their reasonable expenses of traveling to and from the meetings of the Board

of Directors, committee meetings and Shareholders’ meetings. Board Members may also participate in the

Uster Group RSU plan which is detailed below.

5.1.3 Executive Committee

The Members of the Executive Committee are remunerated according to the principle of flexible, performance-

related compensation. Their remuneration consists of a basic salary and a performance-related component

in the context of the bonus plan. The performance related compensation part amounts to an average of 50 %

of the basic salary for attainment of target; further payment is made for overachievement against target. The

variable component is directly linked to the primary drivers of business performance. It is based on the

yearly gross sales and the operating earnings achieved by the Group (EBITA) as well as the individual goals

amounting to a maximum of 10 % of total performance related compensation. All the components mentioned

above are cash compensations which are paid out immediately and are not subject to forfeiture clauses. Ad-

ditional benefits for the Members of the Executive Committee include a car and participation in the below-

mentioned RSU plan.


5.1.4 Share Ownership Program

In April 2010, the Board of Directors adopted a Restricted Stock Unit (RSU) plan. The RSU plan has been

designed to provide an increased incentive to contribute to the future success of the Company, to align

remuneration with the creation of shareholder value, to promote a team-base culture throughout the

organization and to increase the ability of Uster Group to attract and retain individuals with exceptional

skills. The Nomination and Compensation Committee will select the employees eligible for the RSU plan in

its own discretion, but upon proposal by the CEO. The selected employees will be awarded a fixed number

of Restricted Stock Units (RSU Awards) to purchase registered shares of the Company. The total number of

RSU Awards awarded at any one time is left to the sole discretion of the Nomination and Compensation

Committee, which will base its decision on the recommendation of the CEO.

According to the RSU plan, the RSU Awards will vest on the third anniversary from the date of grant of the

RSU Award, provided that neither the employment agreement has been terminated nor any forfeiture event

has occurred. There are no other share-ownership programs or option plans with regard to the compensation

of the Board of Directors and the Executive Committee. Usually Uster Technologies Ltd does not adjust

salaries during the year.

5.1.5 Compensation Governance

With respect to the compensation the Nomination and Compensation Committee has the following respon-

sibilities:

• To review and assess on a regular basis the remuneration system of the Company and the Group including

the incentive plans for the Executive Committee and to make a proposal to the Board of Directors thereto;

• To make recommendations with respect to the remuneration package of the CEO and the Directors;

• To recommend upon proposal of the CEO the remuneration package of employees reporting directly to

the CEO;

• To make recommendations on the grant of options or other securities under any management incentive

plan. Based on these recommendations the Board of Directors approves the remuneration of the Members

of the Board of Directors and the Members of the Executive Committee.

The Nomination and Compensation Committee generally meets during the fourth quarter to discuss the

remuneration package of the Board Members and the Members of the Executive Committee for the following

year. Information from different remuneration studies available on the market is made available to the Mem-

bers of the Nomination and Compensation Committee and serves as a basis for the discussion of the remu-

neration during the meeting. Examples of such studies include surveys from Swissmem and Landolt & Mächler

in Switzerland, Hewitt in China and the Department of Labor in the USA. The CEO is partially present at the

meeting but he has to leave when his remuneration is discussed. After the final decision on the remuneration

of the Board Members and the Members of the Executive Committee by the Board of Directors the salary

changes are signed by a Member of the Board of Directors.

5.2 Compensation of the Members of the Board of Directors and the Executive Committee

Information on the compensation of the Board of Directors and the Executive Committee for the year ending

December 31, 2011, are presented in the note 11 of the Financial Statements of Uster Technologies Ltd.


6 Shareholders’ Participation

6.1 Voting Rights and Representation Restrictions

Details of restrictions on shareholders’ voting rights are given in the section entitled “2.6 Limitations on

Transferability and Nominee Registrations” above.

In a Shareholders’ meeting each share recorded as a share with the right to vote in the share register entitles

its owner to one vote. By means of a written proxy each shareholder may have his shares represented in a

Shareholders’ meeting by a third person who need not be a shareholder. Shareholders who are recorded in

the share register with the right to vote at a certain date appointed by the Board of Directors are entitled to

participate in the Shareholders’ meeting and to exercise the right to vote.

No exceptions to these rules were granted by the Board of Directors in the year under review.

6.2 Statutory Quorums

Unless mandatory statutory provisions provide otherwise, the Shareholders’ meeting passes its resolutions

and performs elections with the absolute majority of the votes represented at the meeting.

If an election cannot be completed upon the first ballot and if there is more than one candidate, the Chairman

shall direct a second ballot at which the relative majority shall decide.

6.3 Convocation of the Shareholders’ Meeting

The Shareholders’ meeting is called by the Board of Directors or, if necessary, the auditors not less than

20 days before the date of the meeting. Notice of a Shareholders’ meeting is given by means of a single pub-

lication in the Swiss Official Gazette of Commerce. The shareholders registered in the share register

may in addition receive a written notice sent by mail.

An extraordinary Shareholders’ meeting is called whenever the Board of Directors or the auditors consider

it necessary or if a Shareholders’ meeting decides so. The Board of Directors will also call a Shareholders’

meeting if one or more shareholders whose combined holdings represent at least 10.0 % of the share capital

so demand in writing and specify the items and the proposals, in the case of elections the names of the pro-

posed candidates, to be submitted to the meeting.

6.4 Agenda

Shareholders whose individual or combined holdings represent an aggregate nominal value of at least

CHF 1,000,000 or at least 10.0 % of the share capital may demand that an item be included in the agenda. This

right must be exercised in writing at least 60 days before the meeting with indication of the items and the

proposals of the shareholders.

No resolution shall be passed on items for which no proper notice has been given; this prohibition does not

apply to proposals to call an extraordinary Shareholders’ meeting, to initiate a special audit or to elect the

auditors as demanded by a shareholder.

No prior notice is required for proposals concerning items included in the agenda and discussions that do

not result in the adoption of resolutions.

6.5 Inscriptions into the Share Register

After the publication or mailing of the written notice of the Shareholders’ meeting until the day following

the Shareholders’ meeting no recordings in the share register will be made, provided that the Board of

Directors does not appoint a different date.


7 Changes of Control and Defense Measures

7.1 Obligation to Make an Offer

According to the Federal Act on Stock Exchanges and Securities Trading (SESTA) a shareholder or a group

of shareholders acting in concert acquiring more than 33 1/3 % of the voting rights must submit a takeover

offer to all remaining shareholders. The articles of association of Uster Technologies Ltd do not include any

amendment (i. e. no opting-out or opting-up provision) to this rule.

7.2 Clauses on Changes of Control

Uster Technologies Ltd has a Restricted Stock Unit (RSU) plan, the essentials of which are set forth under

“5 Compensation, Shareholdings and Loans”. The RSU plan sets forth that the RSU awards granted under

the RSU plan vest immediately and may be converted into shares of Uster Technologies Ltd upon the occur-

rence of a change of control. In addition to that, neither the Members of the Board of Directors nor the

Members of the Executive Committee have contracts that provide for benefits upon termination of employ-

ment contracts due to a change of control.

8 Auditors

8.1 Duration of the Mandate and Term of Office of the Lead Auditor

The statutory auditors and Group auditors are elected by the Shareholders’ meeting. The term of office of

the auditors is one year, beginning with the day of their election and ending on the day of the next ordinary

Shareholders’ meeting.

Ernst & Young Ltd, Zurich, have been the auditors of the Group since 2003. They have been the statutory

auditors of Uster Technologies Ltd since its incorporation in November 2006. The auditor-in-charge, Daniel

Zaugg, took up office in 2008.

8.2 Auditing Fees

In the year under review, Ernst & Young Ltd invoiced CHF 0.5 million (2010: CHF 0.5 million) for their audit

services.

8.3 Additional Fees

Ernst & Young Ltd invoiced additional fees in the amount of CHF 0.4 million (2010: CHF 0.1 million) mostly

related to tax consulting.

8.4 Information Tools Pertaining to the External Audit

The Audit Committee monitors on behalf of the Board of Directors the performance and independence of

the external auditors. In addition it reviews the audit result and monitors the implementation of the findings

by the Executive Committee.

The Audit Committee prepares proposals for the appointment or removal of the external auditors for

submission to the Board of Directors, which then nominates the external auditor for election by the Share-

holders’ meeting.

Currently, the Audit Committee is informed on the findings of the audit through the Management Letter

issued by the auditors after the year-end audit.


9 Information Policy

Uster Technologies Ltd is committed to an open and clear information policy towards its shareholders as

well as its other stakeholders.

The audited annual as well as unaudited semi-annual reports are available to the shareholders and other

stakeholders. The annual report is provided in printed form and both annual and semi-annual reports are

available on the website under www.uster.com/investors/publications/financial_reports/. Additionally, the

public is informed via the media of material current changes and developments. Events relevant for the share

price are published according to the ad-hoc publicity guidelines of the SIX Swiss Exchange.

Media and analyst conferences are held at least once a year. The press releases are available on the website

under www.uster.com/investors/media_release/2011/ and presentations are available on the website under

www.uster.com/investors/publications/investor_relations_presentations/.

Interested parties can subscribe to the mailing list available under www.uster.com/investors/subscription_

service/ in order to receive ad-hoc publications or other recent information relating to the Company.

Important Dates

Publication of annual results 2011 February 21, 2012

Media and analyst conference February 21, 2012

Last day for inscription into the share register

before the Shareholders’ meeting 2012

April 5, 2012

Shareholders’ meeting 2012 April 12, 2012

Dividend payment April 19, 2012

Semi-annual results 2012 July 17, 2012

Contact for Media, Investors and Analysts

Peter Huber, CFO

Uster Technologies AG

Sonnenbergstrasse 10

CH-8610 Uster

Phone +41 43 366 36 06

Fax +41 43 366 36 54

Email [email protected]

10. Material Changes since the Balance Sheet Date

This note contains all information regarding the period between January 1, 2012 and February 17, 2012,

the date this report was authorized for issue. On November 7, 2011, Toyota Industries Corporation, at

that time holding 28.46 % of the share capital of Uster Technologies Ltd, entered into an agreement to

purchase an additional stake of 1,850,777 shares of Uster Technologies Ltd, corresponding to 21.88 % of

the issued and outstanding shares of Uster Technologies Ltd, from Alcide Limited. On November 8, 2011,

Toyota Industries Corporation made a preliminary announcement of a public tender offer at CHF 38.00

per share for all publicly held registered shares of Uster Technologies Ltd. On February 9, 2012, Toyota

Industries Corporation announced that all required merger control approvals for the closing were ob-

tained and that after the closing of the transaction mentioned above the mandatory public tender offer

to acquire all publicly held Uster shares will be launched with the publication of the offer prospectus

on or about February 29, 2012.

Uster Technologies Ltd | Financial Report 2011

52 Comment on the Consolidated Financial Statements 2011

Comment on the Consolidated Financial Statements

Summary

In the financial year 2011, Uster Technologies Ltd achieved excellent performance levels surpassing the previous

highest sales achieved in 2007 before the combined textile and financial marked crisis. Sales grew by 44.9 % to

CHF 192.5 million. EBITA increased by 63.7 % to CHF 56.6 million and the EBITA margin improved to 29.4 % com-

pared to 26.0 % in the previous year.

Key input factors of this EBITA margin were:

• The strong portfolio of high value-adding products meeting the high demand for quality measurement and

certification products around the world;

• High operational leverage in COGS and operational expenses;

• A flexible business model allowing Uster Technologies Ltd to increase its spending in R&D, Marketing and

Management & Administration projects in short time to turn the profits into value for the organization.

The net result amounts to CHF 36.2 million or 18.8 % of gross sales. Key drivers for this excellent net result were:

• Positive business performance with a strong EBITA;

• Lower finance expenses reflecting the reduced debt.

This excellent result and the strong ability to turn profit into cash generated a cash flow from operating activities

of CHF 54.0 million. This allowed Uster Technologies Ltd to finance necessary capital expenditures, to pay

a dividend of CHF 10.2 million, to reduce debt by CHF 28.0 million and to still increase the cash position by

CHF 7.8 million to CHF 28.8 million in the financial year 2011.

Income Statement

Gross Sales

With gross sales of CHF 192.5 million in 2011 Uster Technologies Ltd exceeded the previous highest sales achieved

in 2007. This represents an increase of 44.9 % compared to the 2010 figure of CHF 132.8 million. This was driven by

the continued strong demand for quality measurement and certification products in all markets – e.g. the new third

generation of USTER® yarn clearers USTER® QUANTUM 3 – meeting the needs of textile producers to maximize the

utilization of highly priced cotton by efficiently manufacturing yarns with optimal and consistent quality levels.

EBITA

EBITA amounted to CHF 56.6 million (2010: CHF 34.6 million). As a percentage of gross sales the EBITA reached

29.4 % (2010: 26.0 %).

Uster Technologies Ltd’s flexible business model allowed the Company to quickly respond to the positive market

developments in all areas of the business. In the production area the increased market demand could be served

without significant impact on the fixed cost structure leading to reduced COGS due to economies of scale. High

investments in R&D of CHF 18.2 million were released to support future market leadership by a complete and up to

date product offering. Within Marketing and Management & Administration Uster Technologies Ltd launched

several projects and initiatives, to increase the efficiency of internal processes, to follow ongoing development of

employees and to further consolidate and expand the position as a market leader with a superior market presence.

Balance Sheet

The balance sheet total as of December 31, 2011, amounted to CHF 403.7 million (2010: CHF 399.5 million). Key

changes were:

• Amortization of intangible assets of CHF 15.3 million (assets)

• Net increase of property plant and equipment CHF 1.4 million (assets)

Comment on the Consolidated Financial Statements 2011 53

• Increase in inventories and receivables trade CHF 8.2 million (assets)

• Increase in cash of CHF 7.8 million (assets)

• Loan repayments of CHF 28.0 million net (liabilities)

• Increase of provisions CHF 6.6 million (liabilities)

• Shareholder’s equity increase by CHF 27.6 million mainly as a result of the positive net result and dividend

paid (equity)

• The equity ratio increased to 62.5 % (2010: 56.2 %)

Impairment Test of Intangible Assets and Goodwill

Uster Technologies Ltd performs an impairment test on the goodwill and the intangible assets at least once

a year. The latest impairment test was performed in the fourth quarter of 2011 and was based on recent market

developments, realistic internal assumptions and external input on key parameters. The impairment test

confirmed the carrying amounts of the goodwill and related intangible assets.

Bank Loans

The bank loans existing as of December 31, 2010 were fully repaid in October 2011 and Uster Technologies Ltd

entered into a new loan agreement consisting of a Facility A with an initial balance of CHF 50.0 million and

a Facility B with an initial balance of CHF 20.0 million reducing debt by CHF 28.0 million. The maturity date

of these bank loans is October 2016. Free, not utilized credit facilities amount to CHF 40.0 million, in total.

Cash Flow Statement

With a cash flow from operating activities of CHF 54.0 million Uster Technologies Ltd continues to prove its

strong cash generation ability. This cash flow has been used for capital expenditures of CHF 5.1 million, to reduce

debt by CHF 28.0 million down to CHF 70.0 million and to pay a dividend of CHF 1.20 per share (CHF 10.2 mil-

lion). Cash as of December 31, 2011, improved by CHF 7.8 million to CHF 28.8 million (2010: CHF 21.0 million).

Capital Expenditure for Intangible and Tangible Assets

Capital expenditure for intangible and tangible assets amounted to CHF 5.1 million (2010: CHF 3.8 million).

The main areas of investment were:

• Machinery

• IT-infrastructure

• Fixtures and office equipment

Personnel

As of December 31, 2011, the Uster Group employed 498 full time equivalents (2010: 445) which is an increase

of 11.9 % compared to the prior year.

Taxes

The expected income tax for the Uster Group remains at 17 %, unchanged to prior year.

Dividend Proposal

At the General Meeting on April 12, 2012 the Board of Directors will propose a dividend payment of

CHF 2.50 / share.

54 Uster Group – Consolidated Financial Statements 2011

Uster Group – Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

in CHF 1,000 Notes Jan 1 –

Dec 31, 2011

Jan 1 –

Dec 31, 2010

Gross sales 192,510 100.0 % 132,841 100.0 %

Sales deductions 6 -4,361 -2,746

Net sales 188,149 97.7 % 130,095 97.9 %

Cost of goods sold 7 -68,348 -52,978

Gross profit 119,801 62.2 % 77,117 58.1 %

Sales and marketing expenses 8.1 -23,129 -14,274

Research and development expenses 8.2 -18,174 -14,916

Management and administrative expenses 8.3 -22,032 -13,418

Other income 156 71

Other expenses / amortization 9 -15,262 -15,149

Earnings before interest and tax (EBIT) 41,360 21.5 % 19,431 14.6 %

Amortization 12 15,275 15,171

Earnings before interest tax and amortization (EBITA)

56,635 29.4 % 34,602 26.0 %

Amortization 12 -15,275 -15,171

Earnings before interest and tax (EBIT) 41,360 21.5 % 19,431 14.6 %

Finance income 2,481 2,443

Finance expenses -4,194 -7,580

Finance result 10 -1,713 -0.9 % -5,137 -3.9 %

Earnings before tax 39,647 20.6 % 14,294 10.8 %

Income tax 16 -3,410 6,469

Profit of the year 36,237 18.8 % 20,763 15.6 %

Currency translation differences 82 -649

Total comprehensive income 36,319 18.9 % 20,114 15.1 %

Earnings per share (in CHF)Basic 11 4.28 2.45

Diluted 11 4.20 2.44

Uster Group – Consolidated Financial Statements 2011 55

Consolidated Statement of Financial Position

in CHF 1,000 Notes Dec 31, 2011 Dec 31, 2010

Trademark and goodwill 1 2 119,889 119,889 Intangible assets 12 184,436 199,103 Property, plant and equipment 14 11,616 10,263 Pension fund asset 15 13,290 13,867 Financial assets 200 173 Deferred tax assets 16 2,924 1,938 Non-current assets 332,355 82.3 % 345,233 86.4 %

Inventories 17 14,645 12,373 Receivables trade 18 23,809 17,892 Other receivables 19 3,287 2,128 Income tax receivables 740 779 Cash and cash equivalents 20 28,816 21,049 Current assets 71,297 17.7 % 54,221 13.6 %

Assets 403,652 100.0 % 399,454 100.0 %

Share capital 79,524 79,524 Share premium 93,539 103,691 Reserve for share-based payment transaction 22 2,322 937 Other reserves 445 445 Currency translation differences -1,884 -1,966 Retained earnings 78,264 42,027 Shareholders’ equity 21 252,210 62.5 % 224,658 56.2 %

Bank loans 23 59,468 87,518 Provisions 24 4,763 1,353 Deferred tax liabilities 16 41,267 42,360 Non-current liabilities 105,498 26.1 % 131,231 32.9 %

Bank loans 23 10,000 10,000 Derivative financial instruments 4 0 1,134 Trade and other liabilities 25 14,052 12,262 Accrued liabilities 26 14,441 11,527 Provisions 24 2,601 855 Income tax liabilities and provisions 4,850 7,787 Current liabilities 45,944 11.4 % 43,565 10.9 %

Liabilities 151,442 37.5 % 174,796 43.8 %

Shareholders’ equity and liabilities 403,652 100.0 % 399,454 100.0 %


Consolidated Statement of Cash Flows


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Earnings before tax 39,647 14,294Adjustments for

Depreciation property, plant and equipment 14 3,055 2,393

Amortization intangible assets 12 15,275 15,171

Change in reserve for share-based payment transactions 22 1,385 937

Change in pension fund asset 15 577 1,757

Provisions 5,150 -246

Finance result 10 1,713 5,137

Result from sale of intangible assets and property, plant and

equipment and other non-cash items

-100 366

66,702 39,809

Change in

Inventories -2,017 -2,506

Receivables trade -6,016 -2,748

Other receivables -886 -428

Trade and other liabilities 1,788 8,077

Accrued liabilities 2,811 464

Change in working capital -4,320 2,859

Income taxes paid -8,365 -23

Cash flow from operating activities 54,017 42,645

Purchase of intangible assets 12 -608 -377

Purchase of property, plant and equipment 14 -4,464 -3,408

Purchase of financial assets -47 -23

Disposal of property, plant and equipment 102 64

Disposal of financial assets 25 13

Interest received 157 97

Cash flow from / (used in) investing activities -4,835 -3,634

Uster Group – Consolidated Financial Statements 2011 57

Consolidated Statement of Cash Flows (continued)


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Proceeds from bank loans 23 69,450 0

Repayment of bank loans 23 -98,000 -27,000

Dividends paid 2 1 -10,152 0

Interest paid -2,608 -5,729

Cash flow from / (used in) financing activities -41,310 -32,729

Net change in cash and cash equivalents 7,872 6,282Cash and cash equivalents at beginning of period 21,049 15,053

Exchange differences on cash and cash equivalents -105 -286

Cash and cash equivalents at end of period 20 28,816 21,049

Cash flow from operating activities in % of EBITA 95.4 % 123.2 %


Consolidated Statement of Changes in Equity

in CHF 1,000 Share

Capital

Share

Premium

Reserve for Share-

based Payment

Transaction

Other Reserves Currency

Translation

Differences

Retained

Earnings

2010

Balance at January 1, 2010 79,524 103,691 0 447 -1,317 21,262 203,607Profit of the year 0 0 0 0 0 20,763 20,763Other comprehensive income 0 0 0 0 -649 0 -649Total comprehensive income 0 0 0 0 -649 20,763 20,114Share-based payment transaction 0 0 937 0 0 0 937Allocation to/from statutory reserves 0 0 0 -2 0 2 0Balance at December 31, 2010 79,524 103,691 937 445 -1,966 42,027 224,658

in CHF 1,000 Share

Capital

Share

Premium

Reserve for Share-

based Payment

Transaction

Other Reserves Currency

Translation

Differences

Retained

Earnings

2011

Balance at January 1, 2011 79,524 103,691 937 445 -1,966 42,027 224,658Profit of the year 0 0 0 0 0 36,237 36,237Other comprehensive income 0 0 0 0 82 0 82Total comprehensive income 0 0 0 0 82 36,237 36,319Share-based payment transaction 0 0 1,385 0 0 0 1,385Dividend 0 -10,152 0 0 0 0 -10,152Balance at December 31, 2011 79,524 93,539 2,322 445 -1,884 78,264 252,210

For details to the Shareholders' equity refer to note 21 Share Capital and Reserves.

Uster Group – Notes to the Consolidated Financial Statements 2011 59

Uster Group – Notes to the Consolidated Financial Statements

1 Corporate Information

Uster Technologies Ltd (“the Company”) and its subsidiaries (together “the Group”) are the world’s market

leader in textile quality measurement and provide systems and services that enable the industry to manu-

facture optimum quality and competitive products “from fiber to fabric”. The Group has a long history as

the leader in textile electronics. For more than 60 years the testing and monitoring solutions have enabled

the production of the finest fibers, yarns and fabrics.

Uster Technologies Ltd is domiciled in Switzerland. The address of its registered office is Sonnenberg-

strasse 10, CH-8610 Uster, Switzerland.

2 Basis of Preparation of the Consolidated Financial Statements

2.1 Statement of Compliance

The consolidated financial statements of the Uster Group have been prepared in accordance with the

International Financial Reporting Standards (IFRS).

The consolidated financial statements of the Uster Group for the year ended December 31, 2011, were autho-

rized for issue in accordance with a resolution of the Board of Directors on February 17, 2012. The general

meeting of shareholders will be held on April 12, 2012. According to the Swiss Code of Obligations, the

general meeting of shareholders has the authority to approve the financial statements.

2.2 Basis of Measurement

The consolidated financial statements have been prepared on a historical cost basis except for the derivative

financial instruments mentioned in note 4.3 Market Risk that have been measured at fair value.

2.3 Functional and Presentation Currency

The consolidated financial statements are stated in Swiss Francs, which is the Company’s functional

currency. All values are rounded to the nearest thousand (CHF 1,000) except when otherwise indicated.

2.4 Significant Accounting Judgments and Estimates

In the process of preparing the consolidated financial statements the Executive Committee of the Uster Group

has to make judgments, assumptions and estimations that affect the reported amounts of assets, liabilities,

income and expenses. These estimates are reviewed on a regular basis and are based on past experience as

well as assumptions about the future that currently seem to be reasonable. The actual results, however, could

differ from these estimates.

The key estimates and assumptions that have a significant risk of causing material adjustments to the

carrying amounts of assets and liabilities are mentioned below.

2.5 Impairment of Goodwill and Intangible Assets

The Uster Group determines at least on an annual basis whether goodwill and intangible assets with in-

definite useful lives are to be impaired or not. For intangible assets with definite useful lives the useful life

is reviewed each year and assessed for impairment whenever there is an indicator that the intangible asset

may be impaired. This requires an estimation of the value in use of the cash-generating units to which the

goodwill and the intangible assets are allocated. Estimating the value in use requires to make an estimate of

the future cash flows of the cash-generating units and to choose a suitable discount rate for the calculation

of the present value of those cash flows (see note 13 Impairment Testing of Goodwill and Intangible Assets

with Indefinite Useful Lives). These estimations are based on internal and external sources of information.

60 Uster Group – Notes to the Consolidated Financial Statements 2011

2.6 Pension Benefits

The cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation

involves making assumptions about discount rates, expected rates of return on assets, future salary

increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such

estimates are subject to significant uncertainty (see note 15 Pension Benefits).

3 Summary of Significant Accounting Policies

3.1 Changes in Accounting Policies and Presentation

The accounting policies adopted in the preparation of these consolidated financial statements are consistent

with those followed in the preparation of the Group’s annual financial statements for the year ended Decem-

ber 31, 2010.

Standards, Amendments and Interpretations Effective in 2011 Relevant for the Group

Standard /

Interpretation

Title

Effective Date

IAS 24 Related Party Disclosures January 1, 2011

The IASB issued an amendment to IAS 24 that clarifies the definitions of a related party. The new definitions

emphasise a symmetrical view of related party relationships and clarify the circumstances in which persons

and key management personnel affect related party relationships of an entity. The adoption of the amend-

ment did not have any impact on the financial position or performance of the Group.

Standards, Amendments and Interpretations Effective in 2011 not Relevant for the Group

Standard /

Interpretation

Title

Effective Date

IFRS 1 Amendment – Limited Exemption from Comparative

IFRS 7 Disclosures

July 1, 2010

IAS 32 Amendment relating to classification of rights issues February 1, 2010

IFRIC 19 extinguishing financial liabilities with equity instru-

ments

July 1, 2010

IFRIC 14 Pre-payments of a minimum funding requirement January 1, 2011

Improvements to IFRS May 2010 January 1, 2011


Standards, Amendments and Interpretations that are not yet effective in 2011

and have not been early adopted by the Group

Standard /

Interpretation

Title

Effective Date

IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for

First-time Adopters – Amendment July 1, 2011

IFRS 7 Disclosures on transfers of financial assets – Amendment July 1, 2011

IFRS 7 Disclosures-Offsetting Financial Assets and Financial

Liabilities – Amendments January 1, 2013

IFRS 9 Financial instruments (issued in 2010) January 1, 2015

IFRS 10 Consolidated Financial Statements January 1, 2013

IFRS 11 Joint Arrangements January 1, 2013

IFRS 12 Disclosure of Interests in Other Entities January 1, 2013

IFRS 13 Fair Value Measurement January 1, 2013

IAS 1 Presentation of Items of Other Comprehensive

Income – Amendment July 1, 2012

IAS 12 Deferred tax accounting: Recovery of Underlying

Assets – Amendment

IAS 19 Employee Benefits – Revised January 1, 2013

IAS 27 Separate Financial Statements – Revised January 1, 2013

IAS 28 Investments in Associates and Joint Ventures – Revised January 1, 2013

IAS 32 Offsetting Financial Assets and Financial

Liabilities –Amendments January 1, 2014

IFRIC 20 Stripping Costs in the Production

Phase of a Surface Mine

January 1, 2013

The standards and interpretations described below are those that the Group reasonably expects to

have an impact on disclosures, financial position or performance when applied at a future date. The Group

intends to adopt these standards when they become effective.

IFRS 9 Financial Instruments: Classification and Measurement

IFRS 9 as issued reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to clas-

sification and measurement of financial assets and financial liabilities as defined in IAS 39. In subsequent

phases, the IASB will address hedge accounting and impairment of financial assets. IFRS 9 requires financial

assets to be classified into two measurement categories: those measured as at fair value and those measured

at amortised cost. The determination is made at initial recognition. The classification depends on the entity’s

business model for managing its financial instruments and the contractual cash flow characteristics of the

instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. Therefore, given

the current structure of the financial instruments of the Group, the adoption of the first phase of IFRS 9 will

have no material impact on classification and measurements of financial assets and liabilities. The standard

is effective for annual periods beginning on or after 1 January 2015.


IAS 19 Employee Benefits (Revised)

IAS 19, ‘Employee benefits’ was amended in June 2011. The impact on the group will be as follows: to eli-

minate the corridor approach and recognise all actuarial gains and losses in Other Comprehensive Income

as they occur; and to replace interest cost and expected return on plan assets with a net interest amount

that is calculated by applying the discount rate to the net defined benefit liability (asset). Accordingly

based on the 2011 figures, the recognition of the unrecognized accumulated losses of CHF 14.5 million as

of 31. December 2011 would decrease the pension fund assets by CHF 14.5 million and correspondently

decrease the equity by the same amount. The 2012 pension cost is expected to increase by CHF 0.8 million

due to the replacement of the expected return on plan assets and interests cost with a net interest. On the

other side the elimination of the amortization of actuarial losses would decrease the pension cost by

CHF 0.9 million. The amendment becomes effective for annual periods beginning on or after 1 January 2013.

3.2 Basis of Consolidation

The consolidated financial statements comprise the financial statements of Uster Technologies Ltd and all

its subsidiaries for the period ended December 31, 2011 and 2010, respectively. The financial statements of

the subsidiaries are prepared for the same reporting period as the parent company, using consistent account-

ing policies.

Subsidiaries are entities over which the Group has control, i.e. has the power to govern the financial and

operating policies so as to obtain benefits from their activities. The financial statements of subsidiaries are

included in the consolidated financial statements from the date that control commences until the date that

control ceases.

All intragroup balances as well as any income and expenses arising from intragroup transactions are elim-

inated upon consolidation. Profits and losses arising from intragroup transactions are eliminated in full.

3.3 Foreign Currency

Foreign Currency Transactions

Each subsidiary determines its functional currency, and items included in the financial statements of each

subsidiary are measured using that functional currency. Transactions in foreign currencies are initially

recorded in the functional currency at the rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currency at the reporting date are translated into the

functional currency using the rates valid at that date.

Exchange rate gains and losses arising from transactions and from the translation of monetary items

denominated in foreign currencies are recognized in profit or loss.


Foreign Subsidiaries

As at the reporting date the financial statements of all subsidiaries that have a functional currency different

from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities are translated at the closing rate ruling at the reporting date.

• Income and expenses are translated at exchange rates at the dates of transactions.

The exchange differences resulting from the above translation are recognized directly in other comprehen-

sive income. Upon the disposal of or loss of control on a foreign subsidiary the deferred cumulative exchange

differences stated in other comprehensive income are recognized in profit or loss. None of the subsidiaries

has the currency of a hyperinflationary economy.

Foreign exchange gains and losses resulting from intragroup loans of which the settlement is neither planned

nor likely in the foreseeable future are considered to be part of a net investment in a subsidiary and are

re cognized directly in other comprehensive income. The deferred cumulative exchange differences stated

in other comprehensive income are recognized in profit or loss on disposal of the foreign subsidiary or on

loss of control on the subsidiary.

The following rates were used for the translation of the financial statements of the foreign subsidiaries:

Closing Rates Average Rates

Dec 31, 2011 Dec 31, 2010 Jan 1 –

Dec 31, 2011

Jan 1 –

Dec 31, 2010

CHF CHF CHF CHF

USD 1 0.939 0.936 0.888 1.043

EUR 1 1.216 1.250 1.234 1.382

JPY 100 1.213 1.151 1.114 1.188

CNY 100 14.899 14.174 13.739 15.405

THB 100 2.966 3.113 2.911 3.288

INR 100 1.769 2.092 1.907 2.281

BRL 100 50.317 56.383 53.109 59.241

MXN 100 6.734 7.556 7.163 8.259

TRY 100 49.755 60.423 53.158 69.214


3.4 Intangible Assets

Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. This involves recognizing identi-

fiable assets (including previously unrecognized intangible assets) and liabilities (including contingent

liabilities and excluding future restructuring) of the acquired business at fair value.

Goodwill represents the excess of the consideration transferred and the amount recognized for non-control-

ling interest at the date of the acquisition of the net identifiable assets, liabilities and contingent liabilities

assumed. When the excess is negative (negative goodwill), it is recognized immediately in profit or loss.

Goodwill acquired in a business combination is initially measured at cost.

Following initial recognition goodwill is measured at cost less any accumulated impairment losses. For the

purpose of impairment testing goodwill is allocated from the date of acquisition to cash-generating units.

The allocation is made to those cash-generating units or groups of cash-generating units that are expected

to benefit from the business combination, irrespective of whether other assets or liabilities of the Group are

assigned to those units. Each unit to which the goodwill is allocated represents the lowest level within the

Uster Group at which the goodwill is monitored for internal management purposes. Impairment losses on

goodwill are not reversed.

Research and Development

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an

individual project is recognized only when the Group can demonstrate the technical feasibility of complet-

ing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to

use or sell the asset, how the asset will generate future economic benefits, the availability of resources to

complete the asset and the ability to measure reliably the expenditure during the development. Currently

the Group has not capitalized development cost.

Other Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets

acquired in a business combination is the fair value at the date of acquisition. Following initial recognition

intangible assets are carried at cost less any accumulated amortization and any accumulated impairment

losses. The useful lives of intangible assets are assessed to be either definite or indefinite.

Intangible assets with finite lives are amortized using the straight-line method over their useful economic

life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amortization period and the amortization method for an intangible asset with a finite useful life are

reviewed at least once, usually at the end of, each financial year. Changes in the expected useful life or the

expected pattern of consumption of future economic benefits embodied in the asset are accounted for by

changing the amortization period or method and treated as changes in accounting estimates. The amortiza-

tion expense on intangible assets with finite lives is recognized in the expense category consistent with the

function of the intangible assets.

Intangible assets with an indefinite useful life are tested annually for impairment either individually or at

the level of the cash-generating unit. Such intangibles are not amortized. The useful life of an intangible

asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues

to be supportable. If not, the change in the useful life assessment from indefinite to definite is made on a

prospective basis.

The useful lives of the intangible assets are as follows:


Useful Life in Years

Software 5

Customer base 20

Technology 10

USTER® STATISTICS 25

Trademark indefinite

3.5 Property, Plant and Equipment

Property, plant and equipment including land and buildings are stated at cost less accumulated depreciation

and accumulated impairment. Such cost includes expenditure directly attributable to the acquisition of the

property, plant and equipment.

The cost of replacing part of property, plant and equipment is included in the carrying amount of the item

if it is probable that the future economic benefits associated with the item will flow to the Group and the

cost can be measured reliably. The cost for all other repairs and maintenance is charged to the Statement of

Comprehensive Income as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Land

is not depreciated.

The useful lives of property, plant and equipment are as follows:

Useful Life in Years

Buildings 25

Plant and machinery 3 – 5

Office equipment 3 – 5

IT and communication equipment 2 – 6

Vehicles 4 – 5

The residual values and useful lives of property, plant and equipment are reviewed and adjusted, if appropri-

ate, at the end of each financial year.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes

in circumstances indicate that the carrying value may not be recoverable.

Items of property, plant and equipment are derecognized upon disposal or when no future economic

benefits are expected from their use or disposal. Any gains or losses on disposals are recognized in profit or

loss within “Other income” or “Other expenses”.


3.6 Financial Instruments

Financial Instruments

Financial instruments comprise investments in equity and debt securities, trade and other receivables, cash

and cash equivalents, loans and borrowings, trade and other payables as well as accrued liabilities.

Financial instruments are classified in the following categories:

• Financial assets at fair value through profit or loss

• Loans and receivables

• Held-to-maturity investments

• Available-for-sale financial assets

• Financial liabilities at fair value through profit or loss

• Financial liabilities at amortized cost

The classification depends on the purpose for which the financial assets or liabilities were acquired or entered

into and is determined at initial recognition.

Non-derivative financial instruments are recognized initially at fair value plus, for instruments not at fair

value through profit and loss, any directly attributable transaction costs. Subsequent to initial recognition

they are measured as described below.

Financial Assets at Fair Value through Profit or Loss

Financial assets at fair value through profit or loss include financial assets held for trading. A financial asset

falls under this category if acquired principally for the purpose of selling in the short-term. Assets in this

category are classified as current assets. The Group did not have financial instruments falling under this

category on December 31, 2011 or 2010.

Subsequent to initial recognition financial assets at fair value through profit or loss are measured at fair

value, and changes therein are recognized in profit or loss without any deduction for transaction costs that

may occur on sale or disposal.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. They are included in current assets, except for maturities greater than 12 months

after the reporting date. These are classified as non-current assets. The Group’s loans and receivables comprise

“receivables trade” (note 18 Receivables Trade), “other receivables” (note 19 Other Receivables), “cash and

cash equivalents” (note 20 Cash and Cash Equivalents) as well as “financial assets” that include mainly

deposits.

Loans and receivables are carried at amortized cost, using the effective interest method less any allowance

for impairment. Gains and losses are recognized in profit and loss when the loans and receivables are

derecognized or impaired.

Held-to-maturity Investments

Held-to-maturity investments are non-derivative financial instruments which carry fixed or determinable

payments and fixed maturities and which the Group has the positive intention and ability to hold to matu-

rity. The Group did not have financial instruments falling under this category on December 31, 2011 or 2010.


Available-for-sale Financial Assets

Available-for-sale financial assets are those non-derivative financial instruments that are designated as

available-for-sale or are not classified in any of the three preceding categories. As of December 31, 2011 and

2010, no financial assets have been designated as available-for-sale financial assets.

Financial Liabilities at Fair Value through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading. A finan-

cial liability falls under this category if entered into principally for the purpose of repayment in the short-

term. Liabilities in this category are classified as current liabilities.

Subsequent to initial recognition financial liabilities at fair value through profit or loss are measured at fair

value, and changes therein are recognized in profit or loss.

Financial Liabilities at Amortized Cost

All loans and borrowings are initially recognized at fair value less directly attributable transaction costs.

Subsequently they are measured at amortized cost, using the effective interest method. Gains and losses are

recognized in profit or loss when the liabilities are derecognized as well as through the amortization process.

As of December 31, 2011 and 2010, the Group had bank loans as well as trade and other liabilities that qualified

as financial liabilities at amortized cost (see notes 23 Bank Loans and 25 Trade and Other Liabilities).

Accounting for finance income and expenses is discussed in note 3.15 Finance Income and Expenses.

Share Capital

Ordinary Shares

Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of ordinary shares

are recognized as a deduction from equity net of any tax effects.

Treasury Shares

When share capital is repurchased, the amount of the consideration paid is recognized as a deduction from

equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an

increase in equity and the resulting surplus or deficit on the transaction is recorded in retained earnings. As

of December 31, 2011 and 2010, the Group did not have any treasury shares.

3.7 Share-Based Payment Transactions

The Group operates a Restricted Stock Unit Plan under which the Group receives services from employees

as consideration for shares of the Group at CHF 9.40 each.

Equity-settled Transactions

The cost of equity-settled transactions is recognized, together with a corresponding increase in reserve for

share-based payment transaction in equity, over the period in which the performance and/or service condi-

tions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date

until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate

of the number of equity instruments that will ultimately vest. The income statement expense or credit for a

period represents the movement in cumulative expense recognized as at the beginning and end of that

period and is recognized in personnel expense (note 8.4).


Expense is recognized for equity-settled transactions where vesting is conditional upon a market or non-

vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting

condition is satisfied, provided that all other performance and/or service conditions are satisfied. Where the

terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense

as if the terms had not been modified, if the original terms of the award are met. An additional expense is

recognized for any modification that increases the total fair value of the share-based payment transaction,

or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled

award is cancelled, it is treated as if vested on the date of cancellation, and any expense not yet recognized

for the award is recognized immediately. This includes any award where non-vesting conditions within the

control of either the entity or the employee are not met. However, if a new award is substituted for the can-

celled award, and designated as a replacement award on the date that it is granted, the cancelled and new

awards are treated as if they were a modification of the original award, as described in the previous paragraph.

All cancellations of equity-settled transaction awards are treated equally. The dilutive effect of outstanding

options is reflected as additional share dilution in the computation of diluted earnings per share (further

details are given in note 22).

3.8 Inventories

Inventories are measured at the lower of cost and net realizable value. Cost for inventories is based on the

weighted average principle and includes expenditure incurred in acquiring the inventories, conversion costs

and other costs incurred in bringing them to their existing location and condition. Manufactured inventories

as well as work in progress cost includes an appropriate share of production overheads based on normal

operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs

of completion and the selling expenses.

3.9 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank account balances as well as short-term deposits with

an original maturity of 90 days or less.

3.10 Provisions

Provisions are recognized when the following criteria are met:

• The Group has a present legal or constructive obligation as a result of a past event;

• It is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation;

• The amount of the obligation can be reliably estimated.

The expense relating to any provision is presented in the Statement of Comprehensive Income net of any

reimbursement.

3.11 Impairment

Intangible Assets and Property, Plant and Equipment

Assets with an indefinite useful life are not subject to amortization and depreciation but are tested for

impairment annually or more frequently if events or changes in circumstances indicate that the carrying

value may be impaired.


Assets that are subject to amortization and depreciation are reviewed for impairment whenever there is an

indication that the carrying amount may not be recoverable.

An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recover-

able amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its

value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there

are separately identifiable cash in flows (cash-generating units).

Impairment losses are recognized in profit or loss. Intangible assets other than goodwill and intangible

assets with indefinite useful lives and property, plant and equipment for which an impairment loss was

recognized are reviewed for possible reversal of the impairment at each reporting date. Such reversal is

recognized in profit or loss.

Financial Assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that

it is impaired. An impairment loss in respect of a financial asset measured at amortized cost is calculated as

the difference between its carrying amount and its present value of the future estimated cash flows dis-

counted at the original effective interest rate. An impairment loss in respect of an available for sale financial

asset is calculated by reference to its fair value. Individually significant financial assets are tested for impair-

ment on an individual basis. In relation to trade receivables a provision for impairment is made when there

is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor)

that the Group will not be able to collect all of the amounts due under the original terms of the invoice. The

carrying amount of the receivable is reduced through use of an allowance account. Impaired debts are derec-

ognized when they are assessed as uncollectible.

3.12 Pension Benefits

Defined Benefit Pension Plan

Uster Technologies Ltd provides pension benefits for its employees in Switzerland in the event of retirement,

disability and death. The pension scheme is organized as a separate legal entity and is funded in accordance

with legal requirements.

Costs and liabilities related to the defined benefit pension plan are determined using the projected unit

credit method with attribution of benefit by service pro rata.

The amount recognized in the Statement of Financial Position in respect of defined benefit pension plans is

the fair value of plan assets less the present value of the defined benefit obligation at reporting date,

together with adjustments for unrecognized actuarial gains and losses, unrecognized past service cost and

for unrecognized assets.

Actuarial gains and losses are recognized as income or expense when the cumulative unrecognized actuar-

ial gain or loss exceeds 10.0 % of the higher of the defined benefit obligation and the fair value of the plan

assets. These gains or losses are recognized over the expected average remaining working life of the em ployees

participating in the plan.

Defined Contribution Plans

For employees in other subsidiaries the company pays contributions to the separate legal entity as the plans’

rules require. The regular contributions constitute net periodic costs for the year in which they are due and

as such are included in personnel expenses.


3.13 Leases

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classi-

fied as finance leases. As of December 31, 2011 and 2010, the Group did not have any finance leases.

All the Group’s leases are operating leases and the leased assets are not recognized in the Group’s Statement

of Financial Position. Operating lease payments are recognized as an expense in profit or loss on a straight-

line basis over the lease term. Lease incentives received are recognized as an integral part of the total lease

expense over the term of the lease.

3.14 Revenue Recognition

Revenue from the sale of testing instrumentation is measured at the fair value of the consideration received

or receivable net of returns, discounts and volume rebates, sales taxes and duty. Revenue is recognized when

the significant risks and rewards of ownership of the goods have passed to the buyer; it is probable that the

economic benefits associated with the transaction will flow to the entity, the associated costs incurred or to

be incurred can be estimated reliably, and the amount of revenue can be measured reliably.

Risks and rewards for products and spare parts sold are usually transferred to the client as soon as the prod-

ucts and spare parts leave an entity of the Uster Group. However, sometimes the transfer of risks and rewards

occurs when they are received by the client at the port of entry.

Revenue from service contracts relating to maintenance of testing instrumentation sold is recognized on

a prorata basis over the contract period. The length of the service contracts usually varies between 3 and

12 months.

3.15 Finance Income and Expenses

Finance income includes interest income on funds invested as well as changes in the fair value of the interest

rate swap described in note 4.3 Market Risk. Interest income is recognized as it accrues in profit or loss using

the effective interest rate method.

Finance expenses comprise interest expense on loans, changes in the fair value of the interest rate swap

described in note 4.3 Market Risk, and impairment losses recognized on non-derivative financial instruments

with the exception of accounts receivable trade for which the valuation allowance is recorded under sales

deductions. All interest expenses on loans are recognized in profit or loss using the effective interest rate

method.

3.16 Income Tax

Income tax includes current and deferred tax. Income tax is recognized in profit or loss except to the extent

that it relates to items recognized directly in equity or in other comprehensive income, in which case it is

recognized in equity or other comprehensive income.

Current Income Tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount

expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the

amount are those that are enacted at the reporting date.


Deferred Tax

Deferred income tax is provided using the liability method on temporary differences at the reporting date

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax is recognized for all taxable temporary differences except:

• If the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is

not a business combination and, at the time of the transaction, affects neither the accounting profit nor

the taxable profit or loss;

• With respect to the taxable temporary differences associated with investments in subsidiaries where the

timing of the reversal of the temporary differences can be controlled and it is probable that the temporary

differences will not reverse in the foreseeable future;

• On taxable temporary differences arising on the initial recognition of goodwill.

Deferred income tax assets are recognized for all carry forwards of unused tax credits and unused tax losses

to the extent that it is probable that taxable profit will be available against which the deductible temporary

differences and the carry forwards of unused tax credits and losses can be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year

when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or

substantively enacted at the reporting date.

Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists

to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the

same taxable entity and the same taxation authority.

A provision is made for non-recoverable withholding taxes on undistributed earnings of foreign subsidiaries.

4 Financial Risk Management

The Uster Group is exposed to the following risks from its use of financial instruments:

• Credit risk

• Liquidity risk

• Market risk

Included in this note is information regarding the Group’s exposure to each of these risks, the Group’s objec-

tives, policies and processes for measuring and managing risks as well as information about the management

of capital.

The Board of Directors has set up the Group’s financial risk management framework. The Executive

Committee agrees policies for managing each of the risks and monitors them on a regular basis. The Audit

Committee is responsible to judge the risk assessment established by the Executive Committee and

the proposed measures to reduce risks. It evaluates at regular intervals the financial risk management and

monitoring procedures of the Executive Committee.


4.1 Credit Risk

Credit risk means the risk to suffer a financial loss if a customer or counterparty to a financial instrument

does not meet the contractual obligations. It arises principally from the Group’s accounts receivable trade.

Generally it is the policy of the Group to work in emerging countries with secured payment terms such as

e. g. letters of credit and prepayments in hard currencies like CHF, EUR, USD or in cases where this is not

possible to insure the revenue at SERV (Swiss Export Risk Insurance) or similar trade financing concepts.

This policy is applied with new customers as well as with existing customers. If customers wish to trade on

credit terms, it is the Group’s policy that these customers are subject to credit verification procedures. In

addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure

to losses is not considered significant.

With respect to credit risks arising from other financial assets, the Group’s exposure to credit risks has a

maximum exposure equal to the carrying amount of these financial assets. Since the Group maintains bank-

ing relations with first-class financial institutions, the risk is considered minimal.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure

to credit risk at the reporting date was as follows:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Financial assets 200 173

Receivables trade 23,809 17,892

Other receivables 585 380

Cash and cash equivalents 28,816 21,049

Total 53,410 39,494


4.2 Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due.

The Group manages its liquidity in a way that it will always have sufficient liquidity to meet its obligations,

even under stressed conditions.

For medium term the Group uses a recurring cash planning tool to monitor its risk to a shortage of funds.

This tool considers the expected cash inflows and outflows in the Group for the coming six months on a

detailed level. The long-term monitoring is done based on the 5-year cash flow forecast also used for impair-

ment testing (see note 13). For temporary cash shortages, the Group currently has two revolving credit

facilities of CHF 5.0 million each and a non-drawn amount of CHF 30.0 million of loan Facility B at its

disposal (2010: CHF 32.0 million in total).

The following table shows the contractual maturities of the financial liabilities:

Dec 31, 2010

in CHF 1,000

Within

1 year

1 to

2 years

3 to

5 years

Total

Bank loans 12,783 90,499 0 103,282Interest rate swap 1,134 0 0 1,134Trade and other liabilities 12,262 0 0 12,262Accrued liabilities 4,937 0 0 4,937Total liabilities 31,116 90,499 0 121,615

Dec 31, 2011

in CHF 1,000

Within

1 year

1 to

2 years

3 to

5 years

Total

Bank loans 10,700 10,900 52,900 74,500Interest rate swap 0 0 0 0Trade and other liabilities 14,052 0 0 14,052Accrued liabilities 4,815 0 0 4,815Total liabilities 29,567 10,900 52,900 93,367


4.3 Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and finan-

cial environmental risks affect the Group’s income or the value of its holding of financial instruments.

Foreign Currency Risk

The Group is exposed to currency risks on accounts receivables, accounts payables and loans that are de-

nominated in a currency other than the respective functional currencies of the Group entities. The currencies

in which these positions are primarily denominated as of December 31, 2011, are USD/CHF and CHF/CNY

(transaction currency / functional currency) (2010: USD / CHF, CHF / CNY, TRY / CHF and EUR / CHF).

The Group developed a model to actively control and limit these foreign exchange risks at the source and

therefore has no need to enter into contracts to hedge these exposures as the remaining risk is not significant.

Nevertheless the following sensitivity analysis has been performed.

Increases of 5 % of the transaction currency against the functional currency would have the following impact

on the consolidated financial statements:

Dec 31, 2010

in CHF 1,000

Effect on Profit

before Tax

Effect in

Equity

CurrenciesUSD / CHF -82 -82

CHF / CNY -139 -139

TRY / CHF 26 26

EUR / CHF -26 -26

Dec 31, 2011

in CHF 1,000

Effect on Profit

before Tax

Effect in

Equity

CurrenciesUSD / CHF -106 -106

CHF / CNY -236 -236

Interest Rate Risk

The interest rate exposure is limited to the bank loans described in note 23 Bank Loans. According to the

credit facility agreement for the bank loans that was in place until October 2011, the Group had to hedge at

least CHF 50.0 million of the bank loans. This hedge expired in October 2011. Currently no hedging instru-

ment is in place. However the interest situation and hedging possibilities are continuously monitored.


The table below sets out the carrying amount of the Group’s interest bearing financial instruments exposed

to interest rate risk:

Dec 31, 2010

in CHF 1,000

Balance within

1 year

1 to

2 years

3 to

5 years

Over

5 years

Variable rateCash and cash equivalents 21,049 0 0 0

Bank loans 97,518 87,759 0 0

Interest rate swap 1,134 0 0 0

Total 119,701 87,759 0 0

Dec 31, 2011

in CHF 1,000

Balance within

1 year

1 to

2 years

3 to

5 years

Over

5 years

Variable rateCash and cash equivalents 28,816 0 0 0

Bank loans 69,468 59,578 49,688 0

Total 98,284 59.578 49,688 0

The Group’s bank loans at variable rate are analyzed on a dynamic basis with regards to the interest rate

exposure. On a regular basis the sensitivity of the Group’s result before tax to a reasonably possible change

in interest rates, with all other variables held constant, is tested.

The result of the sensitivity testing mentioned above is as follows:

Change in base points Effect on result before tax

in CHF 1,000

Dec 31, 2011 Dec 31, 2010

+ 5 -46 -59

+ 20 -185 -233

- 10 68 103

-15 90 117

4.4 Capital Management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going

concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an

optimal capital structure to reduce the cost of capital. As of December 31, 2011, equity amounted to 62.5 % of

total equity and liabilities (2010: 56.2 %).

Please refer to note 23 Bank Loans for covenant requirements.


4.5 Financial Instruments – Fair Values

The fair value of financial assets and liabilities together with the carrying amounts shown in the Statement

of Financial Position are as follows:

in CHF 1,000 Dec 31, 2010

Financial Assets/LiabilitiesValuation

Category acc. to

IAS 39

Valuation

Level acc. to

IFRS 7

Total

Carrying

Amount

Non-financial

Assets/

Liabilities

Amortized

Costs

Fair

Value

Carrying

Amount

Fair Value

AssetsFinancial assets L&R 173 173 173 173

Receivables trade L&R 17,892 17,892 17,892 17,892

Other receivables L&R 2,128 1,748 380 380 380

Cash and cash equivalents L&R 21,049 21,049 21,049 21,049

LiabilitiesBank loans non-current FLAC 87,518 87,518 87,518 88,000

Bank loans current FLAC 10,000 10,000 10,000 10,000

Interest rate swap FLFVTPL 2 1,134 1,134 1,134 1,134

Trade and other liabilities FLAC 12,262 12,262 12,262 12,262

Accrued liabilities FLAC 11,527 6,590 4,937 4,937 4,937

Total -81,199 -76,357 -76,839

in CHF 1,000 Dec 31, 2011

Financial Assets/LiabilitiesValuation

Category acc. to

IAS 39

Valuation

Level acc. to

IFRS 7

Total

Carrying

Amount

Non-financial

Assets/

Liabilities

Amortized

Costs

Fair

Value

Carrying

Amount

Fair Value

AssetsFinancial assets L&R 200 200 200 200

Receivables trade L&R 23,809 23,809 23,809 23,809

Other receivables L&R 3,287 2,702 585 585 585

Cash and cash equivalents L&R 28,816 28,816 28,816 28,816

LiabilitiesBank loans non-current FLAC 59,468 59,468 59,468 60,000

Bank loans current FLAC 10,000 10,000 10,000 10,000

Trade and other liabilities FLAC 14,052 14,052 14,052 14,052

Accrued liabilities FLAC 14,441 9,626 4,815 4,815 4,815

Total -41,849 -34,925 -35,457

Categories:

L&R: Loans and Receivables

FLFVTPL: Financial Liabilities at Fair Value through Profit or Loss

FLAC: Financial Liabilities at Amortized Cost


The fair value of the bank loans has been determined using current market interest rates. During the report-

ing period there have been no transfers between the Level 1 and Level 2 fair value measurement.

The fair value of unquoted instruments is estimated by discounting expected future cash flows using mar-

ket rates currently available for instruments on similar terms, credit risk and remaining maturities.

5 Segment Reporting

Under the application of IFRS 8 (management approach) the Group is organized in only one operating seg-

ment. Whilst revenues are primarily reported by geographical areas, the operating results and the statement

of financial position are only analyzed at Group level. This is the primary way in which Management and the

board of directors are provided with financial information to decide on allocation of resources. Therefore

the information by operating segment has already been given in these Consolidated Financial Statements.

Additional country level information is provided below the respective table.

Gross Sales by Geographical Location of Customers

in CHF 1,000 Jan 1 –

Dec 31, 2011

Jan 1 –

Dec 31, 2010

Asia 130,162 67.6 % 89,348 67.3 %

Europe 46,352 24.1 % 28,863 21.7 %

Americas 15,996 8.3 % 14,630 11.0 %

Total 192,510 100.0 % 132,841 100.0 %

Total Sales attributable to the country of domicile amounted to CHF 0.9 million (2010: CHF 0.8 million). In

2011 the sales to Chinese customers amounted to 24.1 % of total sales (2010: 27.0 %) and revenues with Indian

customers reached 6.6 % (2010: 9.0 %) of total sales. Revenues of approximately CHF 44.9 million and

CHF 26.5 million respectively are derived from two single external customers included in the geographical

location Asia and CHF 21.5 million from one single external customer included in the geographical location

Europe (2010: CHF 27.5 million and CHF 17.1 million respectively are derived from two single external

customers, both located in the geographical region Asia).


Gross Sales by Testing Instrumentation and Service

Gross sales primarily derive from the sale of testing instrumentation which is used to increase and balance

the quality of textile production and from service sales consisting of the maintenance of these instruments.

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Testing instrumentation 174,506 90.6 % 114,147 85.9 %

Service sales 18,004 9.4 % 18,694 14.1 %

Total 192,510 100.0 % 132,841 100.0 %

Non-current Assets1) by Geographical Location of Legal Entity

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Asia 4,093 1.3 % 3,607 1.1 %

Europe 309,582 98.0 % 323,174 98.1 %

Americas 2,266 0.7 % 2,474 0.8 %

Total 315,941 100.0 % 329,255 100.0 %

1) Other than financial instruments, deferred tax assets and post-employment benefit assets.

The full amount of non-current assets in Europe is attributable to the country of domicile.

6 Sales Deductions

Sales deductions include items that are directly related to revenue from sales such as discounts, currency

differences, shipping expenses and the change in the allowance for uncollectible receivables (see note 18

Receivables Trade).

7 Cost of Goods Sold

Cost of goods sold comprises direct production costs such as material expense and personnel costs as well

as a proportion of overhead costs like logistics procurement and quality control. The material expense for

2011 amounted to CHF 39.1 million (2010: CHF 32.3 million).

Additionally warranty costs and the depreciation on the production equipment are included in this expense

category.

8 Overhead

8.1 Sales and Marketing Expenses

This position contains expenses for sales and marketing activities such as wages, amortization, depreciation,

project cost, agent commissions, consultancy, and other overhead costs.

8.2 Research and Development Expenses

The expenditure for research and development includes wages, amortization, depreciation, material costs,

consultancy, and other overhead costs related to research and development projects.

8.3 Management and Administrative Expenses

Management and administrative expenses consist of wages, amortization, depreciation, rent, consultancy,

IT, and other overhead costs of the support process.


8.4 Personnel Expense


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Wages and salaries 36,848 29,644

Social security costs 4,116 3,547

Pension costs 2,802 3,722

Share-based payment transaction expense 1,385 937

Other personnel expense 2,667 1,558

Total 47,818 39,408

8.5 Amortization, Impairment and Depreciation


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Amortization of technology, customer base, USTER® STATISTICS 15,066 15,066

Amortization of other intangible assets 209 105

Depreciation of property, plant and equipment 3,055 2,393

Total 18,330 17,564

9 Other Expenses

Other expenses amounting to CHF 15.3 million (2010: CHF 15.1 million) consist mainly of the amortization of

technology, customer base, and USTER® STATISTICS.

10 Finance Result


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Interest income bank accounts & fixed-term deposits (L&R) 114 84

Interest income other receivables (L&R) 139 56

Gain on interest rate swap (FLFVTPL) 1,134 766

Exchange gain 1,094 1,537


Interest expense bank loans (FLAC) -2,294 -5,367

Other expenses / fees bank loans (FLAC) -648 -507

Other finance expense -166 -96

Exchange loss -1,086 -1,610

Finance expense -4,194 -7,580

Finance result -1,713 -5,137

Categories:

L&R: Loans and Receivables

FLFVTPL: Financial Liabilities at Fair Value through Profit or Loss

FLAC: Financial Liabilities at Amortized Cost


The net foreign exchange differences charged to the Statement of Comprehensive Income are included in

the following lines:


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Sales deductions -341 -450

Cost of goods sold 526 -308



Total 193 -831

The origin of the above mentioned foreign exchange differences are as follows:

Sales deductions: accounts receivables trade

Cost of goods sold: accounts payable trade

Finance income: mainly other receivables and other payables

Finance expense: mainly other receivables and other payables

11 Earnings per Share

Basic earnings per share amounts are calculated by dividing the net result for the period by the weighted

average number of shares outstanding during the year. Diluted earnings per share amounts are calculated

by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average

number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares

that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

in CHF Jan 1 –

Dec 31, 2011

Jan 1 –

Dec 31, 2010

Basic earnings per shareProfit of the year 36,237,000 20,763,000

Weighted average number of shares outstanding 8,460,000 8,460,000

Earnings per share 4.28 2.45

in CHF Jan 1 –

Dec 31, 2011

Jan 1 –

Dec 31, 2010

Diluted earnings per shareProfit of the year 36,237,000 20,763,000

Weighted average number of shares outstanding incl. dilution effect 8,626,960 8,514,462

Earnings per share 4.20 2.44

Number of sharesIssued ordinary shares at January 1 8,460,000 8,460,000

Effect of shares under option 166,960 54,462

Weighted average number of ordinary shares at period end 8,626,960 8,514,462


12 Intangible Assets

in CHF 1,000 Customer Base Trademark Technology USTER®

STATISTICSGoodwill Other

Intangible

Assets

2010

At CostBalance at January 1, 2010 180,000 58,700 48,500 30,400 64,549 784 382,933Additions 0 0 0 0 0 377 377Disposals 0 0 0 0 0 - 2 - 2Currency translation differences 0 0 0 0 0 -5 -5Balance at December 31, 2010 180,000 58,700 48,500 30,400 64,549 1,154 383,303

Accumulated Amortization / ImpairmentBalance at January 1, 2010 -27,000 0 -14,550 -3,648 -3,360 -586 -49,144Amortization -9,000 0 -4,850 -1,216 0 -105 -15,171Disposals 0 0 0 0 0 2 2Currency translation differences 0 0 0 0 0 2 2Balance at December 31, 2010 -36,000 0 -19,400 -4,864 -3,360 -687 -64,311

Net book value at January 1, 2010 153'000 58'700 33'950 26'752 61'189 198 333'789Net book value at December 31, 2010 144'000 58'700 29'100 25'536 61'189 467 318'992

in CHF 1,000 Customer Base Trademark Technology USTER®

STATISTICSGoodwill 1) Other

Intangible

Assets

2011

At CostBalance at January 1, 2011 180,000 58,700 48,500 30,400 64,549 1,154 383,303Additions 0 0 0 0 0 608 608Disposals 0 0 0 0 - 7 9 3 - 4 2 - 8 3 5Currency translation differences 0 0 0 0 0 2 2Balance at December 31, 2011 180,000 58,700 48,500 30,400 63,756 1,722 383,078

Accumulated Amortization / ImpairmentBalance at January 1, 2011 -36,000 0 -19,400 -4,864 -3,360 -687 -64,311Amortization -9,000 0 -4,850 -1,216 0 -209 -15,275Disposals 0 0 0 0 7 9 3 4 2 8 3 5Currency translation differences 0 0 0 0 0 -2 -2Balance at December 31, 2011 -45,000 0 -24,250 -6,080 -2,567 -856 -78,753

Net book value at January 1, 2011 144,000 58,700 29,100 25,536 61,189 467 318,992Net book value at December 31, 2011 135,000 58,700 24,250 24,320 61,189 866 304,325

1) the disposal of Goodwill is related to the finalization of the liquidation of a subsidiary. The disposed Goodwill was fully amortized.


Customer Base

The intangible asset “customer base” represents the estimated value of the customers of the Uster Group.

USTER enjoys a strong customer loyalty and appreciation in approximately 75 countries. Technical training,

product performance, trusted measurement and long living products as well as after-sales services produce

high customer retention and loyalty. Its useful life of 20 years (remaining amortization period 15 years) was

reviewed during the fourth quarter of 2011 and was confirmed.

Trademark®

USTER® products are used as standard references for quality control in the global textile industry. USTER®

STATISTICS are used throughout the industry as the base benchmarks for the trading of textile products at

assured levels of quality across global markets. The USTER® STATISTICS are perceived as industry standard

all over the world.

The USTERIZED® concept (as seal of quality for yarns tested and cleared with USTER® products) is increas-

ingly used by well-known consumer companies to assure a consistent level of quality in support of their own

branded products.

Due to the brand awareness and the excellent reputation of the brand “USTER®”, this intangible asset is

considered to have an indefinite useful life.

Technology

The intangible asset technology summarizes the estimated value of the intellectual property of the Group,

i. e. patents and designs which are registered in the name of Uster Technologies Ltd, Switzerland. These

intellectual property rights refer to all the different processes, instruments and machines which have been

developed by the Group through the course of the years. A well-defined policy protects the intellectual prop-

erty in the markets relevant to the business. The Technologies useful life of 10 years (remaining amortization

period 5 years) was reviewed during the fourth quarter of 2011 and was confirmed.

USTER® STATISTICS

USTER provides a service to the textile industry by collecting data from thousands of samples of fiber and

yarn from its customers around the world. The Company produces a database, USTER® STATISTICS, of per-

formance data against the historic population of quality metrics and makes the results freely available to the

industry. USTER® STATISTICS was established in 1957 and looks back on more than 50 years of fiber and yarn

quality measurement. It is perceived as industry standard all over the world. The USTER® STATISTICS’ useful

life of 25 years (remaining amortization period 20 years) was reviewed during the fourth quarter of 2011 and

was confirmed.

13 Impairment Testing of Goodwill and Intangible Assets with Indefinite Useful Lives

The annual impairment test is usually performed in the fourth quarter of each year.

Goodwill and intangible assets with indefinite useful lives acquired through business combinations have

been allocated to the respective individual cash-generating units (CGUs), which correspond to the legal

entities of the Uster Group.

The legal entities are the smallest identifiable group of assets that generate cash inflows that are largely

independent of the cash inflows from other groups of assets.

For the impairment test of each cash-generating unit the recoverable amount has been defined based on the

value in use.


The impairment test showed that the recoverable amounts of the tested intangible assets are well above their

carrying amount.

The carrying amount of the goodwill allocated to each of the cash-generating units as of December 31, 2011

and 2010, was as follows:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Uster Technologies Ltd 60,538 60,538

Other CGU 651 651

Total 61,189 61,189

The carrying amount of CHF 58.7 million of the intangible asset trademark, the only intangible asset with

indefinite useful life, has been allocated to the cash-generating unit Uster Technologies Ltd.

13.1 Key Assumptions Used for the Value in Use Calculations

The following describes each key assumption on which the Group has based its cash flow projections to

undertake the impairment testing of goodwill and intangible assets with indefinite useful lives.

EBITDA

The EBITDA projections are based on current financial forecasts and budgets covering the period from 2012

to 2016. The underlying sales projections were established using historic performance track records, internal

expectations and external official statistics and forecasts. All assumptions made are consistent with past

actual outcomes. The current financial forecast and budgets are approved by the Board of Directors.

Growth Rate

The growth rate used for the value in use calculation of the cash-generating units for the planning period is

based on financial budgets approved by the Board of Directors. The cash flows beyond this period are

extrapolated using the inflation of the Consumer Price Index of the corresponding country as the growth

rate the cash-generating unit is situated in. Using the inflation rate as growth rate reflects past experience

and is supported by external sources.

Discount Rate

The discount rate used is the pre-tax weighted average cost of capital (WACC) based on the capital asset

pricing model. It consists unchanged to prior year of the country specific ten-year governmental bond

rate at the date of the impairment test, a country specific market risk premium, a debt interest rate and a

debt / equity ratio of 50 / 50. Further, a 2 % (2010: 2 %) markup on the cost of equity has been added to take into

account the small cap size of the Uster Group. The values assigned to this key assumption are consistent with

external sources of information.


The following data was used as a basis for the impairment test made in 2011:

Growth Rate Discount Rate

2011 2010 2011 2010

Uster Technologies Ltd 1.5 % 1.5 % 7.3 % 10.7 %

Other CGU 7.9 % 7.9 % 11.8 % 15.1 %

13.2 Impairment Loss

An impairment loss is recognized if the recoverable amount is below the carrying amount. For the year under

review no impairment loss on goodwill and intangible assets with indefinite useful lives has been recognized.

13.3 Sensitivity Analysis

The Group has kept last year’s approach and has performed a critical sensitivity analysis on the intangibles

with indefinite useful life not only by varying the assumption such as discount rate, but also the long-term

growth rate and the future EBITDA. The Board of Directors and the Executive Committee of the Uster Group

consider these underlying assumptions as accurate. Nevertheless a sensitivity analysis with the following

not cumulative changes on each of the key assumptions has been performed (all other factors held constant):

EBITDA projections: - 30 %

Growth rate: - 1.5 %

Discount rate: + 2.0 %

None of these changes leads to an impairment of either Goodwill or Trademark.

That means that a negative deviation of the EBITDA projections of 30 % does not lead to impairment.

The same applies to an increase of the discount rate of 2 % or a decrease of the growth rate of 1.5 %.


14 Property, Plant and Equipment

in CHF 1,000 Land and

Buildings

Machinery and

Equipment

Furniture and

Fixtures

2010

At CostBalance at January 1, 2010 2,893 7,539 4,279 14,711Additions 40 2,135 1,233 3,408Disposals -4 -85 -139 -228Currency translation differences -268 -171 -172 -611Balance at December 31, 2010 2,661 9,418 5,201 17,280

Accumulated Depreciation / ImpairmentBalance at January 1, 2010 -441 -2,300 -2,310 -5,051Depreciation -149 -1,303 -941 -2,393Disposals 2 56 101 159Currency translation differences 56 115 97 268Balance at December 31, 2010 -532 -3,432 -3,053 -7,017

Net book value at January 1, 2010 2,452 5,239 1,969 9,660Net book value at December 31, 2010 2,129 5,986 2,148 10,263

Fire insurance values 7,183 17,209 10,062 34,454

in CHF 1,000 Land and

Buildings

Machinery and

Equipment

Furniture and

Fixtures

2011

At CostBalance at January 1, 2011 2,661 9,418 5,201 17,280Additions 0 2,145 2,319 4,464Disposals 0 -210 -568 -778Currency translation differences 10 111 26 147Balance at December 31, 2011 2,671 11,464 6,978 21,113

Accumulated Depreciation / ImpairmentBalance at January 1, 2011 -532 -3,432 -3,053 -7,017Depreciation -127 -1,743 -1,185 -3,055Disposals 0 174 497 671Currency translation differences -10 -57 -29 -96Balance at December 31, 2011 -669 -5,058 -3,770 -9,497

Net book value at January 1, 2011 2,129 5,986 2,148 10,263Net book value at December 31, 2011 2,002 6,406 3,208 11,616

Fire insurance values 4,944 18,851 10,698 34,493


15 Pension Benefits

15.1 Defined Benefit Pension Plan

Uster Technologies Ltd provides pension benefits for its employees in Switzerland in the event of retirement,

disability and death. The pension scheme is organized as a separate legal entity and is funded in accordance

with legal requirements. The plan assets were lower than the defined benefit obligation leading to a negative

funding position in 2011 (positive funding position in 2010).

The following tables summarize the components of net benefit expense recognized in the Statement of

Comprehensive Income as well as the actual return on plan assets.


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Amounts recognized in the income statementCurrent employer service cost -2,048 -2,434

Interest expense -1,455 -2,034

Expected return on plan assets 2,255 2,521

Amortization of net actuarial gain / (loss) -840 -1,137

Pension costs current year -2,088 -3,084

Actual return on plan assetsExpected return 2,255 2,521

Actuarial gain / (loss) on plan assets -3,305 3,099

Actual return on plan assets -1,050 5,620

Uster Technologies Ltd expects to contribute CHF 1.6 million to the defined benefit pension plan in 2012.

The funded status of the pension plan and the amounts recognized in the Statement of Financial Position of

Uster Technologies Ltd are as follows:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Funded StatusFair value of plan assets 62,605 61,362

Defined benefit obligation -63,781 -60,635

Surplus / Deficit -1,176 727

Amounts recognized in the balance sheetSurplus / Deficit -1,176 727

Unrecognized actuarial loss / (gain) 14,466 13,140

Pension fund asset / (liability) in the balance sheet 13,290 13,867


The changes in the present value of the defined benefit obligation are as follows:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Reconciliation of defined benefit obligationDefined benefit obligation at January 1 60,635 61,637

Current employer service cost 2,048 2,434

Interest expense 1,455 2,034

Employee contribution 1,290 1,136

Benefit payments -508 -8,440

Actuarial (gain) / loss -1,140 1,834

Defined benefit obligation at December 31 63,781 60,635

The changes in the fair value of the plan assets are as follows:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Reconciliation of assetsAssets at January 1 61,362 61,718

Expected return 2,255 2,521

Employer contribution 1,512 1,328

Employee contribution 1,290 1,136

Benefit payments -508 -8,440

Actuarial gain / (loss) on plan assets -3,305 3,099

Assets at December 31 62,605 61,362

The strategic target of major categories of plan assets as a percentage of the fair value of total plan assets are

as follows:

Dec 31, 2011 Dec 31, 2010

Asset categoriesEquity securities 25 % 25 %

Debt securities 29 % 33 %

Property 28 % 26 %

Other 18 % 16 %

The overall expected rate of return is determined based on the plan’s asset allocation strategy and current

market rates.


The principal assumptions used in determining the defined benefit pension plan obligations are shown

below:

Jan 1 –

Dec 31, 2011

Jan 1–

Dec 31, 2010

Actuarial assumptionsDiscount rate 2.40 % 2.40 %

Expected return on plan assets 3.60 % 3.60 %

Salary increases 2.00 % 2.00 %

Pension increases 0.00 % 0.00 %

The discount rate is determined on the basis of corporate bonds with a rating of AA or AAA.

The history of experience gains and losses is summarized below:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007

History of experience gains and lossesFair value of plan assets 62,605 61,362 61,718 72,245 89,346

Defined benefit obligation -63,781 -60,635 -61,838 -63,802 -70,978

Surplus / Deficit -1,176 727 80 8,443 18,368Experience (gain) / loss on plan assets 3,305 -3,099 6,151 11,185 3,988

Experience gain / (loss) on plan liabilities -1,768 3,387 1,068 -174 630


16 Income Tax

Statement of Comprehensive Income


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Current income taxes -7,222 -4,591

Current income taxes previous years 1,792 3,240

Deferred income taxes 2,020 7,820

Total -3,410 6,469

The current income tax from previous years mainly results from the finalization of the tax assessment for

2009.

A reconciliation of the expected tax expense based on the parent company’s tax rate to the effective tax

expense is as follows:


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Earnings before tax 39,647 14,294 Tax at expected tax rate of the parent company -6,740 -17.0 % -2,430 -17.0 %

Income taxed at other rates 1,263 3.2 % 165 1.1 %

Tax effect of non-deductible or non-taxable items -382 -1.0 % -448 -3.1 %Deferred taxes not booked in prior years 557 1.4 % 0 0.0 %Impact of tax rate changes on temporary differences 8 0.0 % 6,416 44.9 %

Unrecognized tax losses 18 0.1 % 22 0.2 %

Non-recoverable withholding tax -7 0.0 % -14 -0.1 %

Current income taxes previous years 1,792 4.5 % 3,240 22.6 %

Others 81 0.2 % -482 -3.4 %

Total -3,410 -8.6 % 6,469 45.2 %


Recognized Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities are attributable to the following items:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Deferred tax assets by types of temporary differenceNon-current assets 390 769

Inventories 1,428 1,140

Trade and other receivables 57 24

Current liabilities and accruals 1,431 759

Total 3,306 2,692

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Deferred tax liabilities by types of temporary differenceNon-current assets 39,846 41,421

Inventories 469 440

Trade and other receivables 644 474

Other current assets 47 148

Other non-current liabilities 91 82

Current liabilities and accruals 1 5

Non-recoverable withholding tax 551 544

Total 41,649 43,114

Net tax assets / (liabilities) -38,343 -40,422

Deferred tax assets 2,924 1,938

Deferred tax liabilities 41,267 42,360


Movements in Temporary Differences

The movements in temporary differences were as follows:


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Non-current assets 1,203 7,674

Inventories 243 314

Trade and other receivables -132 401

Other current assets 90 -157

Other non-current liabilities -9 59

Current liabilities and accruals 632 -457

Non-recoverable withholding tax -7 -14

Changes booked to income statement 2,020 7,820

Currency differences 59 -137

Other changes 59 -137

Total changes of deferred taxes 2,079 7,683

Unrecognized Deferred Tax Assets

Based on the evaluation of tax assets in the foreign subsidiaries deferred tax assets amounting to CHF 118,000

(2010: 333,000) of which the major part will not expire have not been recognized. These relate to tax losses

and temporary differences for which the Group does not expect to have any future taxable profit to offset

them against.


17 Inventories

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Raw materials and supplies 2,737 2,327

Semifinished and finished goods 10,655 9,011

Work in progress 1,253 1,035

Total 14,645 12,373

The amount of write-down of inventories recognized as an expense in profit or loss in 2011 amounted

to CHF -0.8 million (2010: CHF +1.2 million) and is included in cost of goods sold. The total amount of

inventories valued at fair value less cost to sell amounts to CHF 0.0 million (2010: CHF 0.0 million).

18 Receivables Trade

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Accounts receivable trade 22,055 17,060

Bills receivable trade 1,754 832

Total 23,809 17,892

Accounts receivable trade as well as bills receivable trade are non-interest-bearing and are generally on 30

to 90 days’ terms.

The carrying amounts of trade and bills receivables less the allowance for uncollectible items are assumed

to approximate their fair values due to the short-term nature of trade receivables.

The carrying amount of the Group’s trade receivables are denominated in the following currencies:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

CHF 18,685 15,445

USD 2,331 1,183

CNY 1,805 880

TRY 50 137

JPY 340 88

EUR 453 0

Other 145 159

Total 23,809 17,892


The ageing of these receivables is as follows:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Not overdue 19,368 13,716

Overdue 1 to 60 days 4,406 4,012

Overdue 61 to 90 days 14 98



Overdue more than 150 days 0 0

Total 23,809 17,892

Provisions for uncollectible amounts are established based upon the difference between the receivable value

and the estimated net collectible amount. USTER establishes its provision for doubtful accounts receivable

trade based on historical loss experiences.

The effective losses of accounts receivables recognized in 2011 amount to CHF 11,000 (2010: CHF 64,000).

The following table summarizes the movements in the allowance for uncollectible amounts:

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Balance at January 1 -974 -878

Amounts used 11 64

Reversals 435 347

Increases -601 -511

Translation adjustments -1 4

Balance at December 31 -1,130 -974

The creation and release of the valuation allowance is included in sales deductions in the Statement of

Comprehensive Income.

19 Other Receivables

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

VAT receivables 1,897 1,151

Other financial receivables 585 380

Prepaid expenses 805 597

Total 3,287 2,128

No provision for impairment has been recognized on these balances.


20 Cash and Cash Equivalents

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Cash on hand 27 27

Time deposits 719 6,392

Bank accounts 28,070 14,630

Total 28,816 21,049

Cash on bank accounts earns interest at floating rates based on bank deposit rates. Time deposits are made

for varying periods of between one day and three months depending on the immediate cash requirements

of the Uster Group and earn interest at the respective short-term deposit rates.

21 Share Capital and Reserves

21.1 Share Capital

Ordinary Share Capital

The ordinary share capital of Uster Technologies Ltd as of December 31, 2011 amounts to CHF 79.5 million

and is fully paid up. It consists of 8,460,000 registered shares with a nominal value of CHF 9.40 each (Decem-

ber 31, 2010: share capital of CHF 79.5 million and 8,460,000 shares with a nominal value of CHF 9.40 each).

Conditional Share Capital Increase

As of December 31, 2011, Uster Technologies Ltd has a conditional share capital increase available, pursuant

to which the share capital may be increased by a maximum aggregate amount of CHF 7.708 million through

the issuance of a maximum of 820,000 fully paid registered shares with a nominal value of CHF 9.40 each by

the exercise of option rights which the employees, the Management or Directors of Uster Technologies Ltd

or another Group company may be granted.

Part of this conditional share capital increase is used by the share-based payment transaction described in

note 22.

Authorized Share Capital Increase






Development of Ordinary Shares

in 1,000 of shares 2011 2010

Balance at January 1 8,460 8,460

Balance at December 31 8,460 8,460


21.2 Reserves

Other Reserves

Other reserves include the statutory reserves that have to be allocated from retained earnings based on the

regulations in the jurisdictions of the subsidiaries.

Currency Translation Differences

This reserve contains all currency differences arising from the translation of the financial statements of

foreign subsidiaries as well as from the translation of the intragroup loans that are considered as a part of

the net investment in foreign subsidiaries.

21.3 Dividends

The holders of registered shares are entitled to dividends and to one vote per share at the Shareholders’

meetings of Uster Technologies Ltd. A dividend of CHF 10.2 million (CHF 1.20 / share) was paid out to the

Shareholders in 2011 (2010: none).

22 Share Based Payment Transaction

In May 2010 a Restricted Stock Unit (RSU) Plan has been implemented by the Group. Under this plan, se-

lected employees of the Group have been awarded a fixed number of Restricted Stock Units (RSU Awards)

to purchase registered shares of Uster Technologies Ltd on May 4, 2013 (vesting date) or upon the occurrence

of a change of control at CHF 9.40 per share. The shares (up to 320,000) will be provided out of conditional

share capital. There is no cash settlement of these awards. These awards are forfeited when a participant’s

employment with a member of the Group is terminated before the vesting date (except for the cases of retire-

ment, disability or death). The fair value of the RSUs granted is estimated at the date of grant using the

Black-Scholes pricing model using the following assumptions:

Dividend yield: 0 %

Expected volatility: 50.8 %

Risk-free interest rate: 1.05 %

Expected life: 3 years

Weighted average share price: CHF 22.11

Uster Technologies Ltd is a relatively newly listed company with comparably little trading activity in its

share. In addition, the historical data window available is shorter than the RSUs’ lifetime of 3 years. For the

valuation herein, the historical volatility of the Company’s shares computed over the available price his-

tory. Second, the historical volatility of a predefined peer group is estimated using a time window equal to

the tenor of the RSUs’. Each volatility number is given a 50 % weight.

In 2011, a share-based payment transaction expense of CHF 1,385,000 was recognized as personnel expense

and directly in equity according to the regulations of IFRS 2 (2010: CHF 937,000).


Movements in the Year

The following table illustrates the number (No.) and weighted average exercise price of, and movements in,

Restricted Stock Units during the year:


Dec 31, 2011

Jan 1 –

Dec 31, 2010

No. Weighted

average

Exercise Price

No. Weighted

average

Exercise Price

Outstanding January 1 304,000 9.40 0 0.00

Granted during the year 0 9.40 309,000 9.40

Forfeited during the year -8,500 9.40 -5,000 9.40

Balance at December 31 295,500 9.40 304,000 9.40

Out of the 295,500 outstanding restricted stock units none was exercisable. All 295,500 restricted stock

units will be exercisable on May 4, 2013, and have the exercise price of CHF 9.40 per share.

23 Bank Loans

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Facility A 39,734 79,625

Facility B 19,734 7,893

Total non-current 59,468 87,518

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Current portion Facility A 10,000 10,000

Total current 10,000 10,000

Total 69,468 97,518

The bank loans existing as of December 31, 2010 were fully repaid in October 2011. The Group entered into the

following new loan agreements. The relating transaction costs amount to CHF 550,000 and have been capi-

talized within the period.

Facility A

The initial balance of Facility A amounted to CHF 50.0 million and has been reduced by the directly attribut-

able transaction costs that are amortized using the effective interest method. Facility A is unsecured. After

half yearly repayments of CHF 5.0 million in June and December the remaining amount of CHF 5.0 million

has to be repaid in full in October 2016.

Facility B

The initial balance of Facility B amounted to CHF 20.0 million and has been reduced by the directly attribut-

able transaction costs that are amortized using the effective interest method. Facility B is unsecured and

voluntarily repayable. It has to be repaid in full in October 2016.


The effective interest rate and the maturity of the bank loans are as follows:

Effective Interest Rate Maturity

Facility A Libor + margin % Oct 31, 2016

Facility B Libor + margin % Oct 31, 2016

The margin applicable to the basic Libor interest rate on the bank loans ranges depending on the covenants

from 0.55 % to 1.70 % (2010: 1.0 % to 4.5 %). These covenants focus on equity ratio and on EBITDA.

The Group met all loan covenants.

24 Provisions

in CHF 1,000 Restructuring

Provision

Warranty

Provisions

Other

Provisions

2010

Balance at January 1, 2010 354 1,982 128 2,464Amounts used -8 -537 0 -545Reversals -344 0 0 -344Increases 0 641 2 643Currency translation differences -2 -8 0 -10Balance at December 31, 2010 0 2,078 130 2,208

Thereof Non-current 0 1,323 30 1,353Current 0 755 100 855

in CHF 1,000 Restructuring

Provision

Warranty

Provisions

Other

Provisions

2011

Balance at January 1, 2011 0 2,078 130 2,208Amounts used 0 -1,401 0 -1,401Reversals 0 0 0 0Increases 0 6,546 5 6,551Currency translation differences 0 7 -1 6Balance at December 31, 2011 0 7,230 134 7,364

Thereof Non-current 0 4,729 34 4,763Current 0 2,501 100 2,601


Warranty Provisions

The Uster Group usually grants a 12-month warranty period for its products. During this period products

will be repaired or replaced free of charge. The provision is on the one hand based on gross sales and past

experience with warranty claims. On the other hand it also considers the Group’s repairs and replacements

made on a voluntary basis towards important clients. The increase in warranty provision in 2011 compared

to 2010 is due to two factors. First, the high increase in sales leads to an increase in warranty provision due

to a percentage calculation. Second, there is an impact of a specific warranty case that is provided for based

on the best estimate made by the executive management team. It is expected that the warranty costs pro-

vided for will be incurred within the next three years.

Other Provisions

Other provisions include provisions with respect to agent contracts. The Group cancelled agent contracts

and paid the open commissions due. Some agents, however, refused to sign a confirmation that all the out-

standing balances are settled. Therefore the estimated possible risks for additional claims have been pro-

vided for.

25 Trade and Other Liabilities

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Accounts payable trade 4,767 5,770

Advance payments from customers 3,791 2,898

Other financial liabilities 5,494 3,594

Total 14,052 12,262

Accounts payable trade and other liabilities are non-interest-bearing and are generally on 30 to 60 days,

terms. Other liabilities include mostly payables to third parties that are not related to trade activities such

as payables for marketing, consulting activities or IT costs as well as social cost payments.


26 Accrued Liabilities

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Compensation related liabilities 9,626 6,590

Sales related liabilities 1,107 996

Liabilities from other operating activities 3,706 3,634

Financial liabilities 2 307

Total 14,441 11,527

Compensation Related Liabilities

This accrual includes liabilities for bonus payments to the employees and the management, overtime, vaca-

tion, social costs, and a length of service compensation.

Sales Related Liabilities

Sales related liabilities include accruals for sales commission or discounts to be paid to agents and clients.

Liabilities from Other Operating Activities

Comprised in this accrual are various liabilities with regards to the operating business such as liabilities

related to consulting, marketing, IT as well as research and development services.

Financial Liabilities

The accrued financial liabilities are mainly related to accrued interest due on bank loans.

27 Operating Lease Commitments

Non-cancellable operating lease rentals are payable as follows:


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Up to 1 year 2,871 3,446

2 to 5 years 11,617 3,771

Over 5 years 11,168 0

Total 25,656 7,217

The Group usually leases its premises. The only exception is the facility of Uster Technologies, Inc. in

Knoxville which is owned by the Group. CHF 24.7 million (2010: CHF 5.6 million) of the leasing expense

above is attributable to the non-cancellable rental agreement for the facilities of Uster Technologies Ltd

in Switzerland. The underlying rental agreement has been renewed and the contract period has been ex-

tended.

During the year ended December 31, 2011, CHF 3.1 million was recognized in the Statement of Comprehen-

sive Income as an expense with respect to operating leases (2010: CHF 3.6 million).


28 Pledged Assets

As of December 31, 2011, none of the assets of the Uster Group have been pledged (2010: none).

29 Related Parties

29.1 Parent and Ultimate Controlling Party

Since October 19, 2007, the shares of Uster Technologies Ltd are listed on the main segment of SIX Swiss Ex-

change. 819 shareholders were entered in the share register of Uster Technologies Ltd as of December 31, 2011

(2010: 880). Of those the following held more than 3.0 % of the total voting rights:

• Toyota Industries Corporation 1) 50.3 % (22.5 %)

• Board and Management Group 2) 8.4 % (8.1 %)

• Alcide Ltd 1) n/a (27.9 %)

• T. Row Price International Inc. n/a (4.5 %)

• Bär Marc Philipp n/a (3.1 %)

• Balfidor Fondsleitung AG n/a (3.1 %)

1) The date of transfer of the equity securities is subject to fulfillment or waiver of closing conditions, not fulfilled

at the balance sheet date. 2) Part of Board and Management formed a Group for purchase and sale of shares.

29.2 Transactions with the Board of Directors and the Executive Committee

Compensation of the Members of the Board of Directors and the Executive Committee

The compensation of the Board of Directors and the Executive Committee comprised the following:


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Short-term employee benefits 6,235 5,416

Post-employment benefits 595 571

Share-based payment transactions 903 578

Total 7,733 6,565

In addition to their salaries the Members of the Executive Committee participate in the RSU Plan and have

a company car at their disposal.

For further information regarding the compensation of the Board of Directors and the Executive Committee,

please refer to note 11 Compensation of the Members of the Board of Directors and the Executive Committee

of the Statutory Financial Statements of Uster Technologies Ltd.

Other Transactions with Members of the Board of Directors

In his function of a Managing Partner of a consulting company a Member of the Board of Directors advises

the Company on certain business issues related to China. Also another Board Member delivers consulting

services to the Company from time to time. Consultancy services in the amount of CHF 12,954 (2010:

CHF 43,620) were conducted on the same terms and conditions as if they were delivered by third parties.


30 Subsidiaries

Company Country of

Incorporation

% Capital

Shareholdings

Dec 31, 2011 Dec 31, 2010

Uster Technologies de Mexico S.A. de C.V. Mexico 100 % 100 %

Uster Technologies GmbH Germany 100 % 100 %

Uster Technologies (India) Pvt. Ltd India 100 % 100 %

Uster Technologies (India) Marketing Pvt. Ltd India 100 % 100 %

Uster Technologies K.K. Japan 100 % 100 %

Uster Technologies (Suzhou) Co. Ltd China 100 % 100 %

Uster Technologies (Shanghai) Trading Co. Ltd China 100 % 100 %

Uster Technologies Sulamericana Ltda. Brazil 100 % 100 %

Uster Technologies (Thailand) Ltd Thailand 100 % 100 %

Uster Technologies Holding (Thailand) Ltd Thailand 100 % 100 %

Uster Technologies, Inc. USA 100 % 100 %

Uster Teknoloji Ticaret A.S. Turkey 100 % 100 %

31 Material Changes since the Balance Sheet Date:

This note contains all information regarding the period between January 1, 2012 and February 17, 2012, the date

this report was authorized for issue.

On November 7, 2011, Toyota Industries Corporation, at that time holding 28.46 % of the share capital of Uster Tech-

nologies Ltd, entered into an agreement to purchase an additional stake of 1,850,777 shares of Uster Technologies

Ltd, corresponding to 21.88 % of the issued and outstanding shares of Uster Technologies Ltd, from Alcide Limited.

On November 8, 2011, Toyota Industries Corporation made a preliminary announcement of a public tender offer at

CHF 38.00 per share for all publicly held registered shares of Uster Technologies Ltd. On February 9, 2012, Toyota

Industries Corporation announced that all required merger control approvals for the closing were obtained and

that after the closing of the transaction mentioned above the mandatory public tender offer to acquire all publicly

held Uster shares will be launched with the publication of the offer prospectus on or about February 29, 2012.

This closing of the agreement between Toyota Industries Corporation and Alcide Limited will have the fol-

lowing impact on the Consolidated Financial Statements 2012:

Bank Loans

Pursuant to the change of control clause of the main credit facility agreement of the Company the lenders

have the right to cancel all facilities under the facility agreement and to ask for immediate repayment of the

outstanding amounts. At the date these Financial Statements were authorized the lenders had agreed to

suspend the handling of the change of control event for a reasonable period of time.

Share Based Payment Transaction

Pursuant to the change of control clause of the Restricted Stock Unit Plan described in note 22 the plan will

vest if a shareholder holds more than 51 % of the voting rights in the Company. As it is highly probable that

Toyota Industries Corporation will hold more than 51 % of the shares of the Company following the settlement

of the public tender offer, the remaining share-based payment transaction expense of CHF 2.0 million (2012

and 2013) will have to be fully recognized upon vesting.

102 Report of the Statutory Auditor on the Consolidated Financial Statements 2011

Report of the Statutory Auditor on the Consolidated Financial Statements

To the General Meeting of Uster Technologies Ltd, Uster

Zurich, 17 February 2012

As statutory auditor, we have audited the consolidated financial statements of Uster Technologies Ltd, which

comprise the statement of comprehensive income, statement of financial position, statement of cash flows,

statement of changes in equity and notes (pages 54 to 101), for the year ended 31 December 2011.

Board of Directors, responsibility

The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial

statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of

Swiss law. This responsibility includes designing, implementing and maintaining an internal control system

relevant to the preparation and fair presentation of consolidated financial statements that are free from

material misstatement, whether due to fraud or error. The Board of Directors is further responsible for

selecting and applying appropriate accounting policies and making accounting estimates that are reasonable

in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with Swiss law and Swiss Auditing Standards and International Stan-

dards on Auditing (ISA). Those standards require that we plan and perform the audit to obtain reasonable

assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

consolidated financial statements. The procedures selected depend on the auditor’s judgment, including

the assessment of 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 preparation and fair presentation of the consolidated financial statements in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropri-

ateness of the accounting policies used and the reasonableness of accounting estimates made, as well as

evaluating the overall presentation of the consolidated financial statements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements for the year ended 31 December 2011 give a true and fair

view of the financial position, the results of operations and the cash flows in accordance with IFRS and

comply with Swiss law.

Report of the Statutory Auditor on the Consolidated Financial Statements 2011 103

Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)

and independence (Art. 728 CO and Art. 11 AOA) and that there are no circumstances incompatible with our

independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an

internal control system exists, which has been designed for the preparation of consolidated financial state-

ments according to the instructions of the Board of Directors.

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

Ernst & Young Ltd

Daniel Zaugg Tobias Meyer

Licensed audit expert Licensed audit expert

(Auditor in charge)

Uster Technologies Ltd – Financial Statements 2011 105

Uster Technologies Ltd – Financial Statements

Income Statement


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Gross sales 177,069 116,513

Sales deductions -11,031 -3,285

Net sales 166,038 113,228

Other operating income 3,825 4,049

Operating income 169,863 117,277

Material expense -43,636 -37,061

Personnel expense -32,595 -23,447

Depreciation and amortization -15,822 -15,066

Other operating expense -35,404 -21,255

Operating expense -127,457 -96,829

Earnings before interest and tax (EBIT) 42,406 20,448



Finance result -1,404 -4,871

Earnings before tax 41,002 15,577

Taxes -4,158 -797

Profit / (Loss) of the year 36,844 14,780

106 Uster Technologies Ltd – Financial Statements 2011

Balance Sheet

in CHF 1,000 Dec 31, 2011 Dec 31, 2010

Organizational costs 3,394 6,254

Other intangible assets 266,434 276,593

Property, plant and equipment 7,620 6,546

Financial assets 29 14

Investments in subsidiaries 6,645 5,825

Loans to group companies 503 612

Non-current assets 284,625 295,844

Inventories 5,532 5,181

Receivables trade third parties 16,778 12,496

Receivables trade group companies 8,974 5,812

Other receivables third parties 1,585 1,225

Other receivables group companies 2,321 1,430

Prepaid expenses third parties 573 474

Prepaid expenses group companies 56 70

Cash and cash equivalents 24,757 17,026

Current assets 60,576 43,714

Assets 345,201 339,558

Share capital 79,524 79,524

Reserve from capital contribution 99,859 110,011

Statutory reserve 422 422

Retained earnings 18,108 3,327

Net result 36,844 14,780

Shareholders’ equity 234,757 208,064

Bank loans 60,000 88,000

Provisions 4,729 1,323

Non-current liabilities 64,729 89,323

Bank loans 10,000 10,000

Derivative financial instruments 0 1,134

Payables trade third parties 6,323 7,136

Payables trade group companies 1,295 381

Other liabilities third parties 5,310 2,785

Other liabilities group companies 7,992 4,798

Accrued liabilities third parties 12,161 14,975

Accrued liabilities group companies 170 200

Provisions 2,464 762

Current liabilities 45,715 42,171

Liabilities 110,444 131,494

Shareholders’ equity and l i a b i l i t i e s 345,201 339,558

Uster Technologies Ltd – Notes to the Financial Statements 2011 107

Uster Technologies Ltd – Notes to the Financial Statements

1 Statement of Compliance

The financial statements of Uster Technologies Ltd are prepared in compliance with the Swiss Code of

Obligations.

2 Company Information

Since the initial public offering on October 19, 2007, the shares of Uster Technologies Ltd are listed on the

main standard of SIX Swiss Exchange.

3 Shareholders’ Equity

in CHF 1,000 Share

Capital

Reserve from

Capital

Contribution

Statutory

Reserves

Retained

Earnings 1)

Total

Balance at January 1, 2010 79,524 110,011 422 3,327 193,284Profit / (Loss) of the year 14,780 14,780Balance at December 31, 2010 79,524 110,011 422 18,107 208,064

Balance at January 1, 2011 79,524 110,011 422 18,107 208,064Appropriation of retained earnings 0 -10,152 0 10,152 0Dividend 0 0 0 -10,152 -10,152Profit / (Loss) of the year 0 0 0 36,844 36,844Balance at December 31, 2011 79,524 99,859 422 54,952 234,757

Ordinary Share Capital

The ordinary share capital of Uster Technologies Ltd as of December 31, 2011, amounts to CHF 79.5 million

and is fully paid up. It consists of 8,460,000 registered shares with a nominal value of CHF 9.40 each

(December 31, 2010: share capital of CHF 79.5 million and 8,460,000 shares with a nominal value of

CHF 9.40 each).

Conditional Share Capital Increase

As of December 31, 2011, Uster Technologies Ltd has a conditional share capital increase available, pursuant

to which the share capital may be increased by a maximum aggregate amount of CHF 7.708 million through

the issuance of a maximum of 820,000 fully paid registered shares with a nominal value of CHF 9.40 each by

the exercise of option rights which the employees, the Management or Directors of Uster Technologies Ltd

or another Group company may be granted.

Part of this conditional share capital increase is used by the share-based payment transaction described in

note 22 of the Consolidated Financial Statements.

108 Uster Technologies Ltd – Notes to the Financial Statements 2011

Authorized Share Capital Increase






4 Pledged Assets

As of December 31, 2011, none of the assets of Uster Technologies Ltd were pledged (2010: none).

5 Guarantee

As of December 31, 2011, Uster Technologies Ltd did not have any guarantees outstanding (2010: none).

6 Fire Insurance Values of Property, Plant and Equipment

The fire insurance values of property, plant and equipment as of December 31, 2011, amounted to CHF 18.9 mil-

lion (2010: CHF 17.1 million).

7 Pension Fund Liability

As of December 31, 2011, Uster Technologies Ltd had no pension fund liability (2010: CHF 0.3 million).

8 Risk Assessment

Risk management is part of the management process which is defined within the management handbook.

All risks / groups of risks are assigned to the process owners of the business processes containing the spe-

cific risk. Strategic risks are directly assigned to the Executive Management Team.

The process owners supervise the risks / group of risks and propose process changes if the risks take unex-

pected developments. The process changes are approved by the Executive Management Team.

The risk management process is reviewed at least once a year by the Board of Directors.

9 Significant Shareholders

819 shareholders were entered in the share register of Uster Technologies Ltd as of December 31, 2011

(2010: 880). Of those the following held more than 3.0 % of the total voting rights:

• Toyota Industries Corporation 1) 50.3 % (22.5 %)

• Board and Management Group 2) 8.4 % (8.1 %)

• Alcide Ltd 1) n / a (27.9 %)

• T. Row Price International Inc. n / a (4.5 %)

• Bär Marc Philipp n / a (3.1 %)

• Balfidor Fondsleitung AG n / a (3.1 %)

1) The date of transfer of the equity securities is subject to fulfillment or waiver of closing conditions, not fulfilled

at the balance sheet date. 2) Part of Board and Management formed a Group for purchase and sale of shares.


10 Investments in Subsidiaries

As of December 31, 2011, Uster Technologies Ltd held the following investments:

Company Purpose % Capital

Shareholdings

Share Capital

Dec 31, 2011 in 1,000

Uster Technologies de Mexico S.A. de C.V.

(Tlalnepantla, MX)

D 100 % MXN 6,250

Uster Technologies GmbH

(Neuss, DE)

D 100 % EUR 26

Uster Technologies (India) Pvt. Ltd

(Bangalore, IN)

SC 100 % INR 4,950

Uster Technologies (India) Marketing Pvt. Ltd

(Bangalore, IN)

S 100 % I N R 100

Uster Technologies K.K.

(Osaka-fu, JP)

SC 100 % JPY 10,000

Uster Technologies (Shanghai) Trading Co. Ltd

(Shanghai, CN)

S 100 % CNY 5,654

Uster Technologies (Suzhou) Co. Ltd

(Suzhou, CN)

TC 100 % CNY 20,185

Uster Technologies Sulamericana Ltda.

(Alphaville-Barueri SP, BR)

SC 100 % BRL 523

Uster Technologies (Thailand) Ltd

(Bangkok, TH)

SC 100 % THB 6,000

Uster Technologies Holding (Thailand) Ltd

(Bangkok, TH)

H 100 % THB 1,000

Uster Technologies, Inc.

(Knoxville, US)

TC 100 % USD 100

Uster Teknoloji Ticaret A.S.

(Adana, TR)

SC 100 % TRY 50

TC: Technology Center

SC: Service Center

S: Sales Office

H: Holding

D: Dormant


11 Compensation of the Members of the Board of Directors and the Executive Committee

11.1 Loans and Other Payments

No loans to present or former Members of the Board of Directors or Executive Committee were granted or

outstanding as of December 31, 2011 (2010: none).

During 2011 payments for consulting services amounting to CHF 12,954 (2010: CHF 43,620) have been made

to Pacific Consult Ltd of which Max-Ulrich Zellweger is a Managing Partner.

11.2 Compensation

The compensation of the Board of Directors and the Executive Committee for the year ending Decem-

ber 31, 2011, was as follows:

Board of Directors

in CHF 2010

Name Function Base

Compensation

(Cash)

Bonus

(Cash)

Share-based

Payment

Transaction

Other

Social Costs

Total

Max-Ulrich Zellweger Chairman 80,000 0 209,550 4,000 293,550Beat Lüthi 1) Vice-Chairman 0 0 0 0 0Harald Rönn Member 0 0 0 0 0Barry James Mulady Member 50,000 0 104,775 3,125 157,900Akira Onishi 2 ) Member 0 0 0 0 0Geoffrey Scott 3) Member

Total 130,000 0 314,325 7,125 451,450

in CHF 2011

Name Function Base

Compensation

(Cash)

Bonus

(Cash)

Share-based

Payment

Transaction

Other

Social Costs

Total

Max-Ulrich Zellweger Chairman 80,000 0 0 4,064 84,064Harald Rönn 4) Vice-Chairman 0 0 0 0 0Barry James Mulady Member 50,000 0 0 3,175 53,175Akira Onishi Member 0 0 0 0 0Geoffrey Scott 3) Member Total 130,000 0 0 7,239 137,239

1) Beat Lüthi left the Board of Directors at the Ordinary General Meeting held on March 30, 2010.2) Akira Onishi was elected Member of the Board of Directors by the Ordinary General Meeting held on March 30, 2010.3) The compensation of the executive member of the Board of Directors is shown under the compensation

of the Executive Committee.4) Harald Rönn left the Board of Directors on June 30, 2011.


Executive Committee

in CHF 2010

Name Function Base

Compensation

(Cash)

Bonus

(Cash)

Share-based

Payment

Transaction

Pension

Benefits

Other

Social Costs

Total

Geoffrey Scott CEO 555,923 562,731 488,950 78,676 73,930 1,760,210Other members 2,258,028 1,909,397 1,816,100 179,168 232,477 6,395,170Total 2,813,951 2,472,128 2,305,050 257,844 306,407 8,155,380

in CHF 2011

Name Function Base

Compensation

(Cash)

Bonus

(Cash)

Share-based

Payment

Transaction

Pension

Benefits

Other

Social Costs

Total

Geoffrey Scott CEO 576,720 745,748 0 84,982 87,923 1,495,373Other members 2,189,098 2,723,350 429,400 180,868 241,076 5,763,792Total 2,765,818 3,469,098 429,400 265,850 328,999 7,259,165

1) Including board member fee of CHF 50,000 (2010: CHF 50,000).

11.3 Ownership of USTER Shares by the Board of Directors and the Executive Committee

As of December 31, 2011, the Members of the Board of Directors and the Executive Committee held the

following number of shares of Uster Technologies Ltd:

Board of Directors

Name Function Number of

Shares owned

2011

Number of

Restricted

Stock Units

owned 2011

Number of

Shares owned

2010

Number of

Restricted

Stock Units

owned 2010

Max-Ulrich Zellweger Chairman 40,000 15,000 40,000 15,000

Harald Rönn 1) Vice-Chairman n / a n / a 13,000 0

Barry James Mulady Member 10,148 7,500 10,148 7,500

Akira Onishi 2) Member 0 0 0 0

Geoffrey Scott 3) Member

Total 50,148 22,500 63,148 22,500

1) Harald Rönn left the Board of Directors on June 30, 2011.2) Akira Onishi was elected Member of the Board of Directors by the Ordinary General Meeting held on March 30,

2010.3) The ownership of shares of the executive member of the Board of Directors is shown under the ownership of shares

of the Executive Committee.

1)

1)


Executive Committee

Name

Function

Number of Shares owned

2011

Number of Restricted

Stock Units owned 2011

Number of Shares owned

2010

Number of Restricted

Stock Units owned 2010

Geoffrey Scott CEO 239,848 35,000 235,193 35,000

Thomas Dressendörfer 1) CFO n / a n / a 17,500 25,000

Naiming Wei Asian Operations 131,172 15,000 106,000 15,000

Harold Hoke Sales & Service 92,000 15,000 92,000 15,000

Hossein Ghorashi U.S. Operations 75,000 15,000 75,000 15,000

Renato Murk Order Fulfillment 73,400 15,000 73,400 15,000

Rafael Storz Research & Innovation 34,100 10,000 32,000 10,000

Richard Furter 2) Textile Technology n / a n / a 5,000 25,000

Thomas Nasiou 3) Textile Technology 0 10,000 n / a n / a

Deniz Bütüner 4) Marketing & Business Development

n / a n / a 7,000 10,000

Reine Wasner 5) Marketing & Business Development

3,700 10,000 n / a n / a

Total 649,220 125,000 643,093 165,000

1) Thomas Dressendörfer left the Executive Committee on October 31, 2011.2) Richard Further left the Executive Committee on May 31, 2011.3) Thomas Nasiou joined the Executive Committee on June 1, 2011.4) Deniz Bütüner left the Executive Committee on December 31, 2010.5) Reine Wasner joined the Executive Committee on January 3, 2011.

Proposal for the Appropriation of Available Earnings and Capital Reserve

The Board of Directors proposes to appropriate the available earnings and capital reserve as follows:

in CHF Dec 31, 2011 Dec 31, 2010

Unappropriated retained earningsBalance brought forward 18,107,655 3,327,208

Profit/(Loss) of the year 36,844,654 14,780,447

Total unappropriated retained earnings 54,952,309 18,107,655

Appropriation of retained earningsUnappropriated retained earnings 54,952,309 18,107,655

Transfer of reserve from capital contribution 21,150,000 10,152,000

Total available for distribution 76,102,309 28,259,655Dividend proposed by the Board of Directors -21,150,000 -10,152,000

Unappropriated retained earnings to be carried forward 54,952,309 18,107,655

in CHF Dec 31, 2011 Dec 31, 2010

Reserve from capital contributionBalance brought forward 99,859,000 110,011,000

Transfer to retained earnings -21,150,000 -10,152,000

Balance to be carried forward 78,709,000 99,859,000

Report of the Statutory Auditor on the Financial Statements 2011 113

Report of the Statutory Auditor on the Financial Statements

To the General Meeting of Uster Technologies Ltd, Uster

Zurich, 17 February 2012

As statutory auditor, we have audited the financial statements of Uster Technologies Ltd, which comprise

the income statement, balance sheet and notes (pages 105 to 112), for the year ended 31 December 2011.

Board of Directors’ responsibility

The Board of Directors is responsible for the preparation of the financial statements in accordance with the

requirements of Swiss law and the company’s articles of incorporation. This responsibility includes design-

ing, implementing and maintaining an internal control system relevant to the preparation of financial state-

ments that are free from material misstatement, whether due to fraud or error. The Board of Directors is

further responsible for selecting and applying appropriate accounting policies and making accounting

estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted

our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan

and perform the audit to obtain reasonable assurance whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment

of the risks of material misstatement of the financial statements, whether due to fraud or error. In making

those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation

of the financial statements in order to design audit procedures that are appropriate in the circumstances,

but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness

of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We

believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion.

Opinion

In our opinion, the financial statements for the year ended 31 December 2011 comply with Swiss law and the

company’s articles of incorporation.

114 Report of the Statutory Auditor on the Financial Statements 2011

Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)

and independence (Art. 728 CO and Art. 11 AOA) and that there are no circumstances incompatible with our

independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an

internal control system exists, which has been designed for the preparation of financial statements accord-

ing to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the

company’s articles of incorporation. We recommend that the financial statements submitted to you be

approved.

Ernst & Young Ltd

Daniel Zaugg Tobias Meyer

Licensed audit expert Licensed audit expert

(Auditor in charge)

Information for Investors 2011 115

Information for Investors

Share Information

Development of Share Price in CHF

Share Information and Key Figures

The table below shows the most important information regarding the shares of Uster Technologies Ltd.

2011 2010

Share capitalNominal value per share CHF 9.40 9.40

Shares issued number 8,460,000 8,460,000

Issued share capital CHF 1,000 79,524 79,524

Free float 49.6 % 49.6 %

Market capitalization and dividendMarket capitalization CHF 1,000 348,552 271,989

as % of gross sales 181.1 % 204.7 %

as % of shareholders’ equity 138.2 % 121.1 %

Dividend per share, gross CHF 2.50 1.20

Total dividend, gross CHF 1,000 21,150 10,152

Payout ratio 58.4 % 48.9 %

40

45

35

30

25

20

Uster Technologies Ltd

SPI, rebased31

.10.

2011

30.1

1.20

11

31.0

8.20

11

30.0

6.20

11

30.0

4.20

11

31.0

5.20

11

31.0

7.20

11

30.0

9.20

11

28.0

2.20

11

31.0

3.20

11

31.1

2.20

10

31.0

1.20

11

31.1

2.20

11

31.0

1.20

12

116 Information for Investors 2011

2011 2010

Key figures per shareShare price at the end of the year CHF 41.20 32.15

Highest share price CHF 42.80 33.20

Lowest share price CHF 27.80 22.50

Dividend yield 6.1 % 3.7 %

Basic earnings per share CHF 4.28 2.45

Diluted earnings per share CHF 4.20 2.44

P / E ratio 9.6 13.1

Stock Exchange Information

SIX Swiss Exchange Ticker Symbol USTN

Swiss Security Number 3433153

ISIN CH0034331535

Shareholding Structure

The structure of the shareholders entered in the share register is as follows:

Shares Shareholders Shares

1 – 100 283 34.6 % 18,078 0.2 %

101 – 1,000 422 51.5 % 156,762 1.9 %

1,001 – 10,000 76 9.3 % 235,052 2.8 %

10,001 – 100,000 31 3.8 % 1,067,790 12.6 %

100,001 – 1,000,000 5 0.6 % 1,074,081 12.7 %

> 1,000,000 2 0.2 % 4,258,377 50.4 %

Not registered 1,649,860 19.5 %

Total 819 100.0 % 8,460,000 100.0 %

Important Dates

Publication of annual results 2011 February 21, 2012

Media and analyst conference February 21, 2012

Last day for inscription into the share register

before the Shareholders’ meeting 2012

April 5, 2012

Shareholders’ meeting 2012 April 12, 2012

Dividend payment April 19, 2012

Semiannual results 2012 July 17, 2012

Contact for Media, Investors and Analysts

Peter Huber, CFO

Uster Technologies AG


CH-8610 Uster

Phone +41 43 366 36 06

Fax +41 43 366 36 54



Key Figures


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Jan 1 –

Dec 31, 2009

Jan 1 –

Dec 31, 2008

Consolidated Income StatementGross sales 192,510 100.0 % 132,841 100.0 % 100,763 100.0 % 154,893 100.0 %

Sales deductions -4,361 -2,746 -2,858 -1,925

Net sales 188,149 97.7 % 130,095 97.9 % 97,905 97.2 % 152,968 98.8 %

Cost of goods sold -68,348 -35.5 % -52,978 -39.9 % -41,631 -41.3 % -61,952 -40.0 %

Gross profit 119,801 62.2 % 77,117 58.1 % 56,274 55.8 % 91,016 58.8 %

Sales and marketing

expenses

-23,129 -12.0 % -14,274 -10.7 % -11,750 -11.7 % -19,465 -12.6 %

Research and develop-

ment expenses

-18,174 -9.4 % -14,916 -11.2 % -11,010 -10.9 % -19,857 -12.8 %

Management and admin-

istrative expenses

-22,032 -11.4 % -13,418 -10.1 % -11,245 -11.2 % -17,582 -11.4 %

Other income, expenses &

amortization

-15,106 -7.8 % -15,078 -11.4 % -14,812 -14.7 % -15,212 -9.8 %

Earnings before interest and tax (EBIT)

41,360 21.5 % 19,431 14.6 % 7,457 7.4 % 18,900 12.2 %

Amortization 15,275 15,171 15,252 15,268

Earnings before interest tax and amortization (EBITA)

56,635 29.4 % 34,602 26.0 % 22,709 22.5 % 34,168 22.1 %

Amortization -15,275 -15,171 -15,252 -15,268

Earnings before interest and tax (EBIT)

41,360 21.5 % 19,431 14.6 % 7,457 7.4 % 18,900 12.2 %

Finance result -1,713 -0.9 % -5,137 -3.9 % -7,044 -7.0 % -10,211 -6.6 %

Earnings before tax 39,647 20.6 % 14,294 10.8 % 413 0.4 % 8,689 5.6 %

Income tax -3,410 -8.6 % 6,469 45.3 % 665 161.0 % -3,373 -38.8 %

Profit / (Loss) of the year 36,237 18.8 % 20,763 15.6 % 1,078 1.1 % 5,316 3.4 %

118 Information for Investors 2011


Dec 31, 2011

Jan 1 –

Dec 31, 2010

Jan 1 –

Dec 31, 2009

Jan 1 –

Dec 31, 2008

Consolidated Cash Flow StatementEarnings before tax 39,647 14,294 413 8,689

Finance result 1,713 5,137 7,044 10,211

Amortization, depreciation &

change in accruals / provision

25,342 20,378 12,872 20,729

Change in working capital -4,320 2,859 -3,640 -2,256

Income taxes paid -8,365 -23 -2,411 -4,617

Cash flow from operating activities 54,017 42,645 14,278 32,756

Purchase of non-current assets -5,119 -3,808 -3,373 -3,735

Disposal of non-current assets 127 77 298 124

Interest received 157 97 75 264

Cash flow from / (used in) investing activities -4,835 -3,634 -3,000 -3,347

Proceeds from loans 69,450 0 5,000 1

Repayments of loans -98,000 -27,000 -45,000 -15,000

Share capital transactions 0 0 42,631 -3,936

Dividends paid -10,152 0 0 0

Interest paid -2,608 -5,729 -6,646 -8,478

Cash flow from / (used in) financing activities -41,310 -32,729 -4,015 -27,413Net change in cash and cash equivalents 7,872 6,282 7,263 1,996

Cash flow from operating activities in % of EBITA 95.4 % 123.2 % 62.9 % 95.9 %


in CHF 1,000 2011 2010 2009 2008

Balance sheetAssets 403,652 399,454 404,739 409,805

Non-current assets 332,355 345,233 361,269 375,321

as % of total assets 82.3 % 86.4 % 89.3 % 91.6 %

Current assets 71,297 54,221 43,470 34,484


Equity 252,210 224,658 203,607 159,542


Liabilities 151,442 174,796 201,132 250,263

Non-current liabilities 105,498 131,231 165,692 215,174


Current liabilities 45,944 43,565 35,440 35,089


Net debt 40,652 76,469 109,224 156,546

AR collection period 42 48 53 35

AP collection period 50 42 41 48

Capital expenditureIntangible assets -608 -377 -9 -174

Property, plant, and equipment -4,464 -3,408 -3,319 -3,513

Total -5,072 -3,785 -3,328 -3,687

EmployeesNumber of employees (FTE) 498 445 449 536

Gross sales per employee 386,566 298,251 224,416 288,979

Imprint

Content Concept and Editing

IRF Communications AG

Text


Design, Concept and Layout

TGG Hafen Senn Stieger

Photos Imagepages

Vonier Fotografie

Photos Board of Directors

and Executive Committee

T+T Fotografie

Printing

Ostschweiz Druck AG



CH-8610 Uster / Switzerland

Phone +41 43 366 36 36

Fax +41 43 366 36 37


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