Gurit Annual Report 2012

Gurit Holding AGEbnater Strasse 79CH-9630 Wattwilwww.gurit.com G

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delivering the future of composite solutions

Annual Report 2012

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gurit holding Ag, Wattwil, switzerlandc/o gurit services Ag, schaffhauserstrasse 339, ch-8050 Zürich Bernhard Schweizer, Group Communications / Investor Relations

pictures:Photo archives of Gurit companies; (10) iStock photo; (14) Aston Martin Lagonda; (18) arripay, published on Flickr under Creative Commons license by attribution / non commercial; (6, 32, 35, 36) Christian Höfliger

printing:Neidhart + Schön AG, Zurich

This Annual Report contains forward-looking statements that include risk and uncertainties regarding the future global developments that cannot be influenced by the Company.

gurit – delivering the future of composite solutions. We specialize in advanced

composite materials, production tools, components, and engineering services

for demanding industries such as wind energy, aerospace, rail, automotive,

marine, civil engineering, architecture, ocean energy, agriculture and new appli-

cations where materials such as metal, wood or concrete are being replaced by

engineered, durable and lightweight composite solutions. Our complete materi-

als offering comprises glass, carbon, and aramid fibre prepregs, structural foam

and balsa wood core materials, gel coats, adhesives, resins, and consumables.

Our components business includes large-scale tooling moulds, rapid prototyping

and the manufacture of certain finished parts. Our engineering services combine

an unparalleled know-how in materials manufacturing, composite processing, and

structural engineering with a high responsiveness based on our global presence.

OrganizatiOn page 02

Facts at a glance page 03

investOr relatiOns page 04

letter tO sharehOlders page 06

Wind energy page 10

tOOling page 12

transpOrtatiOn page 14

industrial and Marine page 16

engineered structures page 18

cOrpOrate gOvernance page 20

reMuneratiOn repOrt page 28

Financial repOrt page 31

addresses page 72

table OF cOntents

339.indd 1 11.03.2013 09:16:50

OrganizatiOn

OrganizatiOnal chart (as per December 31, 2012)

OrganizatiOnal chart (as from February 1, 2013)

Peter Leupp, Chairman of the BoardRobert Heberlein, Chairman of the Audit and Corporate Governance Commmittee Nick Huber, Chairman of the Compensation and Nomination Committee Urs Kaufmann, Member Peter Pauli, Member

Rudolf Hadorn, CEOMarkus Knüsli Amacker, CFODamian Bannister, Director Innovation, Products, and SolutionsBinjiang (“Bing“) Chen, General Manager ToolingRudolf Gerber, General Manager Wind EnergyGraham Harvey, General Manager Engineered Structures Kees Reijnen, General Manager TransportationPaul Goddard, General Manager Marine (ad interim)

Rudolf Hadorn, CEO and General Manager Gurit Composite Systems and EngineeringMarkus Knüsli Amacker, CFOStefan Gautschi, General Manager Gurit Composite Materials Damian Bannister, Chief Technology Officer

PricewaterhouseCoopers AG, Zurich

Chief Executive OfficerRudolf Hadorn

Chief Executive OfficerRudolf Hadorn

Corporate Functions

Composite Systems and Engineering General ManagerRudolf Hadorn

gurit annual repOrt 2012

OrganizatiOn

page 2

Wind EnergyGeneral ManagerRudolf Gerber

Chief Technology OfficerDr. Damian Bannister

Tooling General Manager

Bing Chen

TransportationGeneral Manager

Kees Reijnen

MarineGeneral Manager

Paul Goddard

Engineered StructuresGeneral ManagerGraham Harvey

Innovation, Products,and Solutions

DirectorDr. Damian Bannister

Chief Financial OfficerMarkus Knüsli Amacker

FinanceChief Financial OfficerMarkus Knüsli Amacker

Composite MaterialsGeneral ManagerStefan Gautschi

Board and Group Management

Board of Directors of Gurit Holding AG

Group Management (as per December 31, 2012)

Group Management(as from February 1, 2013)

Auditors

339.indd 2 11.03.2013 09:16:50

Facts at a glance

Rest of the World5.7% (5.1%)

Europe47.0% (43.2%)

Asia16.0% (30.4%)

Americas31.2% (21.3%)


Facts at a glance

page 3

Wind Energy58.3% (57.1%)

Transportation17.1% (15.0%)

Engineered Structures1.1% (0.9%)

16.4% (14.5%)Industrial and

Marine

Tooling7.1% (12.5%)

sales 2012 by Markets

sales 2012 by regiOn OF destinatiOn

Prepreg55.9% (44.1%)

Formulated10.9% (11.5%)

Core Material18.7% (25.7%)

Others14.5% (18.7%)

sales 2012 by prOduct categOry

(Prior year period)(Prior year period) (Prior year period)

Amounts in million CHF 2012 2011 +/– %

Net sales 351.0 344.7 1.8%

EBITDA 36.6 44.8 – 18.4%

EBITDA margin 10.4% 13.0% –

EBIT 13.9 31.0 – 55.2%

EBIT margin 4.0% 9.0% –

Operational EBIT* 26.9 27.6 – 2.6%

Operational EBIT margin 7.7% 8.0% –

Profit for the year 13.7 22.3 – 38.5%

Return on net assets (RONA) 3.6% 7.6% –

Net cash flow from operating activities 48.3 – 2.5 –

Capital expenditures 6.0 10.1 – 40.4%

Net debt / (net cash) – 6.0 32.6 –

Equity in % of total assets 70.5% 53.5% –

Number of employees at December 31 1 733 2 182 – 20.6%

Earnings per bearer share CHF 29.39 CHF 47.83 – 38.6%

Distribution per bearer share (proposed / resolved) CHF 15.00 CHF 15.00 –

Market capitalization at December 31 168.7 191.1 – 11.7%

* Operational EBIT

Operating profit 12.7 28.1

Less: other operating income – 1.6 – 3.2

Less: non-recurring expenses 3.7 0.9

Less: impairment, net of reversals 10.7 1.8

Less: inventory impairment from restructuring 1.4 –

= Operational EBIT 26.9 27.6

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investOr relatiOns


investOr relatiOns

page 4

Company capital:The share capital of Gurit Holding AG consists of:

240 000 registered sharesat CHF 10.00 par value security number 185 039420 000 bearer sharesat CHF 50.00 par value security number 801 223Par value adjusted to CHF 50, this results arithmetically in a total of 468 000 shares.

stock market trading:The Gurit bearer shares are listed on SIX Swiss Exchange. Prices are published in the Swiss daily and financial press as well as in electronic price information systems under the following symbols or numbers:

Bearer share: Reuters GUR.S Telekurs GUR Security number 801 223 ISIN CH0008012236

important dates:April 9, 2013 Annual General Meeting Press release on Q1 sales August 23, 2013 Half-year report 2013 Analyst/Media conferenceOctober 25, 2013 Press release on Q3 salesEnd of Jan. 2014 Press release on FY 2012 salesMarch 14, 2014 Presentation full-year results 2013; Analyst/Media conference Publication of Annual ReportApril 10, 2014 Annual General Meeting

The key dates are continuously updated at http://investors.gurit.com/default.aspx

internet/e-mail:Further information about Gurit can be found at www.gurit.com

To obtain a subscription to the Group’s news service, please register in the investor relations section of the Gurit website at http://investors.gurit.com/news-alert-subscription.aspx

Key figures per bearer share Gurit Holding AG 2012 2011 2010 2009 2008

Price at year-end CHF 360.50 CHF 408.25 CHF 573.00 CHF 580.00 CHF 450.00

Highest price CHF 545.00 CHF 688.00 CHF 629.00 CHF 728.00 CHF 1 119.00

Date 23.4.2012 21.4.2011 12.4.2010 29.9.2009 3.1.2008

Lowest price CHF 360.00 CHF 361.00 CHF 406.25 CHF 246.00 CHF 340.00

Date 21.12.2012 12.9.2011 31.8.2010 9.3.2009 20.11.2008

Earnings per share CHF 29.39 CHF 47.83 CHF 53.45 CHF 44.87 CHF 36.81

Gross dividend – – – CHF 15.00 CHF 13.00

Distribution out of reserves from capital contributions CHF 15.00 CHF 15.00 CHF 15.00 – –

taxable values of traded securities 31.12.2012 31.12.2011 31.12.2010 31.12.2009 31.12.2008

Bearer shares CHF 50 CHF 360.50 CHF 408.25 CHF 573.00 CHF 580.00 CHF 450.00

339.indd 4 11.03.2013 09:16:54


investOr relatiOns

page 5

stOck price chart

Gurit bearer shares and respective indices

Trading volumes in Gurit bearer shares

800

700

600

500

400

300

200

100

0

Jan

12

Feb

12

Mar

12

Apr

12

May

12

June

12

July

12

Aug

12

Sep

t 12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

GURIT (GUR)SPI rebased on GUR share priceRENIXX rebased on GUR share price

Share price in CHF

Daily volume

4 000

2 000

6 000

8 000

10 000

12 000

Jan

12

Feb

12

Mar

12

Apr

12

May

12

June

12

July

12

Aug

12

Sep

t 12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Source: Thomson Reuters Datastream

Source: Thomson Reuters Datastream: Gurit; SPI; Volumes; IWR Internationales Wirtschaftsforum Regenerative Energien: RENIXX

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letter tO sharehOlders

page 6

Dear ShareholdersGurit performed very well during the first three quarters of the year 2012 but witnessed a strong decline in demand in the Wind Energy market in the fourth quarter. The Group made important steps towards future growth in its existing and in additional markets for composite materials and solutions. Gurit’s new Group Organization will provide a strong foundation for these efforts in 2013.

strategy paves ground for future growthAs lightweight, high-performance composites are finding their way into a growing array of industries, Gurit maintained its focus on established customers and target markets and intensified the strategic process initiated in 2011 with the formation of the Engineered Structures business unit: New avenues for future growth were evaluated. The use of Gurit’s comprehensive composite materials range in newly emerging industries or in applications which are now converting from traditional materials to versatile composites together with newly arising engineering and parts manufacturing opportunities will create future growth. These prospects will also help re-balance the dominant sales contribution of the Wind Energy market to Group sales, which is attractive in the long-term but volatile in the short-term.

Double-digit sales growth in all non Wind Energy related markets In 2012, Gurit achieved strong, double-digit sales increases in all target markets except the ones serving the global wind energy industry. In Transportation, Gurit continued to gradually grow sales in Aerospace and dynamically expanded its Automotive parts business. Industrial and Marine saw rising activity in the superyacht and race boat busi-ness and a significant increase of material sales for new industrial composite applications. Engineered Structures, too, expanded both its engineering consultancy and its components manufacturing business. In the three quarters of the year, Wind Energy sales were growing strongly, too. They benefitted from strong American demand in wind energy for com posite materials in general and for carbon fibre prepregs in particular. This demand, however, came to an abrupt halt towards year-end as the US production tax credits – a major subsidy – were not yet extended. Eventually renewed, they are certainly a silver lining on the horizon for the American market for the remainder of the current year. The sharp decline towards the end of 2012, however, called for restructuring measures in the Canadian and due to the market decline also in the Chinese wind energy prepreg plants in the last quarter. The almost exclusively wind energy related sales in Tooling remained low throughout the year reflecting primarily the hesitant investment mood on the Chinese market for new blade model tooling. Overall, Group sales reached CHF 351.0 million in 2012. In reported Swiss francs, this represents an increase of 1.8%, or at constant 2012 translation rates, a decline of 2.1%.

Rudolf Hadorn Chief Executive Officer

Peter LeuppChairman of the Board of Directors

tOWards the Future OF cOMpOsite sOlutiOns

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page 7

operational EBit margin just short of longer-term 8 to 10% target level Gurit’s longer-term operating profit target remains unchanged at 8 to 10% of sales. For 2012, the operational EBIT margin excluding all net one-off effects (“the operational EBIT”) almost reached this level with 7.7%. To counteract the sharp demand decline in Wind Energy towards year-end, Gurit was forced to implement restructuring measures and mothballed its prepreg production in Canada and China and reduced its work-force by around 150 people. The resulting restructuring charges of CHF 12 million, mainly due to the impairment of fixed assets and inventory, was the main reason for the decrease of the operating profit to CHF 12.7 million or 3.6% of net sales. After lower financial expenses and an income tax credit resulting from the release of a CHF 11.9 million deferred tax liability at the holding company level, the profit for the year amounted to CHF 13.7 million. This equals CHF 29.39 per listed bearer share after CHF 47.83 recorded a year ago.

strong cash flow from operations, net cash position, and solid balance sheetGurit generated a strong cash flow from operating activities of CHF 48.3 million after recording a negative cash flow of CHF 2.5 million for the prior year. This improvement was largely attributable to a reduction in working capital due to better collection of accounts receivable and lower sales levels towards year-end. Group-wide capital expenditures amounted only to CHF 6.0 million: Apart from maintenance capital expenditures, 2012 saw the investments into a new factory for glued balsa blocks in Ecuador and capacity increases in the Automotive parts production in the UK. The plant in the UK will see yet another doubling expansion in 2013. Gurit closed the books with cash and cash equivalents of CHF 37 million, a net cash position of CHF 6.0 million and a healthy balance sheet featuring an equity ratio of 70.5% – up from 53.5% a year ago.

Developments by target marketWind Energy reports a sales increase of 4.0% to CHF 204.6 million and thus accounted for 58.3% of Group sales. In the first half-year, sales dynamically increased by 34.0%, boosted by strong demand in the Americas for Gurit’s innovative carbon prepregs. In contrast, the global demand for glass fibre prepregs continued to decline, affecting particularly sales to European customers. The Asian wind energy market suffered from over-capacities both at blade makers and materials suppliers and from the resulting price competition. Even so, Gurit continued to invest in its materials offering, addressing key issues of the industry. Gurit successfully positioned itself as the world-wide leading carbon fibre prepreg specialist. Carbon fibre prepregs are an ideal solution for ultra-light and/or ultra-long blades espe-cially. New developments launched to the market included VelinoxTM, a low-exotherm resin system developed for the manufacture of thick laminates in shorter cycle times. The new AirstreamTM coating also addresses the efficient manufacture of thick, low-void structures at ambient temperatures of up to 35 °C without requiring time-consuming de-bulking steps. Gurit has also developed next-generation PET and balsa wood core materials that feature low resin uptake, just like CoreCell. With these market-leading and enabling improvements, Gurit continues to drive innovation in Wind Energy.

Tooling was confronted by low demand for new moulds for wind energy turbine blades, both from the local Chinese and the global export markets, especially India. Sales declined by 42.3% to CHF 24.9 million compared with the prior year and contributed 7.1% to Group sales. As the globally largest independent and fully integrated leader in blade moulds, Gurit is now starting to offer its tools also for additional applications beyond the wind energy market. First plugs and moulds for carbon fibre spars and composite boat hulls have been produced. In addition, Gurit has entered into a co-operation with Hawart Sondermaschinenbau, Germany, for the manufacture of blade and turbine tower seg-ment transportation racks and the supply of hinge systems.

Transportation signed new long-term materials supply agreements for all Airbus aircraft including the flagship A380, the new extra-wide body plane A350 and the Neo generation of the A320 craft. A specialist in interiors, Gurit is pro-gressively moving towards structural applications. Besides Airbus, Gurit is gradually expanding its Aerospace business with smaller and non-commercial aircraft manufacturers. Sales to transportation customers rose by 16% to CHF 60.1 million. This equates to 17.1% of Group sales. The lion’s share of this increase was attributable to the rapidly rising sales Gurit achieved in its Automotive parts business. Sales to the Automotive industry rose by 76.4% compared with

339.indd 7 11.03.2013 09:17:08

Guritannualreport2012

lettertoshareholders

paGe8

the prior year. This increase was supported by winning new customers, additional car models, and through a higher share of materials per vehicle. What is more, the development of new composite materials with high-temperature resistance allows the finished components to be painted in the OEM’s standard paint shop. The newly developend press technology paves the way for larger production runs and and is expected to drive growth and market interest in the future. Gurit is committed to accommodate growth in this market with a next capacity expansion of the automo-tive parts production site in 2013.

Industrial and Marine sales grew strongly by 15.7% over last year to CHF 57.6 million which equates to 16.4% of Group sales. Interesting projects in the global race boat and superyacht markets and renewed momentum in Europe supported sales, while the American, Asian, and Pacific marine markets did not fully meet expectations. Most of the year-over-year sales increase relates to non-marine applications, showing that Gurit is sucessfully addressing a growing range of new industrial markets and composite applications.

Engineered Structures reports 19.5% higher sales of CHF 3.8 million which accounts for 1.1% of Group sales. A key focus remained on Ocean Energy where Gurit has made solid inroads as engineering and parts manufacturing partner. Also, the manufacture of large series composite parts grew in 2012. Successfully building the prototype rear sections for London’s new double-deck commuter buses resulted in winning the contract for the following series production. Besides, Gurit developed new patented concepts for lightweight, easy-to-install modular bridges. An internal task force has thoroughly evaluated future opportunities, which has already led to promising contacts and initial compo-nent and solution trials.

Corporate GovernanceAt last year’s Annual General Meeting, Dr. Paul Hälg was no longer available for re-election as Member of the Board of Directors. Dr. Hälg looks back on a 27-year-long history with Gurit. He held various positions including the CEO function at Gurit-Essex, a joint venture sold to the partner corporation in 2001. He then served on the Board of Directors, since 2004 as its Chairman. Board and Management would like to thank Dr. Paul Hälg for his many years of service.

Peter Pauli was elected as new member of the Board of Directors and Peter Leupp was appointed as new Chairman.

New Group Organisation geared for future growthOver the past years, Gurit has successfully expanded its product offering which now covers practically all key material categories used for state-of-the-art composite structures. What is more, Gurit has evolved from a key materials sup-plier for select markets to becoming a true systems supplier and composite engineering partner for an increasing ar-ray of industries. Some of these industries are already benefitting from the versatility of composites, and many are just now starting to discover the many advantages of these engineered materials. Today, lightweight composite struc-tures rapidly find their way into new applications and contribute to the creation of entire new industries. Remaining fully committed to best serve its existing and new composite materials customers and markets, Gurit also wants to seize those newly emerging opportunities. Fully leveraging the long-standing capabilities in structural engineering and prototyping, coupled with the know how in the manufacture of large moulds and the production of leading-edge com-posite components will lead that way. Still in 2012, Gurit thus initiated an internal process to gear up its Group or-ganisation for future growth. Going forward, Gurit is now organized in two business units:

Gurit Composite Materials covers the materials business of the former Wind Energy, Transportation and Industrial and Marine target markets as well as all other existing and new material markets and application fields. This business unit covers the full materials range including the key product categories prepregs, core materials, and formulated products. Gurit Composite Materials will be led by Stefan Gautschi who joined Gurit on February 1, 2013.

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page 9

Gurit Composite Systems and Engineering unites as the second unit the existing Tooling, Automotive Parts and Engineered Structures businesses and aims at globally building Gurit’s capabilities as a systems supplier and engi-neering partner. Rudolf Hadorn will lead this business as General Manager, in addition to his function as CEO.

The Gurit Executive Committee (i. e. Group Management) is now smaller and comprises since February 1, 2013 Rudolf Hadorn as Chief Executive Officer and General Manager Gurit Composite Systems and Engineering, Markus Knüsli Amacker as Chief Financial Officer and Head Investor Relations, Stefan Gautschi as General Manager Gurit Composite Materials, and Damian Bannister as Chief Technology Officer.

Board and Management wish to thank the previous Executive Committee for their important work and valuable con-tributions. We wish them every success in their new functions.

outlook and proposed distribution to shareholdersGurit today is well positioned to seize all composite material supply opportunities and rapidly expand its engineering, tooling, and finished parts and solutions businesses at the same time. Putting a comprehensive focus on the global composites market, we are confident that we will grow our business significantly over the next years.

Supported by the now renewed production tax credits in the US, Gurit expects the Wind Energy market to recover gradually during 2013 from the low levels of the fourth quarter 2012. In addition, Gurit Composite Materials is also expected to benefit from growing sales to other existing and new markets. Additional customer wins and larger car body part series in the Automotive business and slowly recovering Tooling activities should support Gurit Composite Systems and Engineering sales.

Thanks to the excellent cash flow and the solid operational performance, the Board of Directors proposes to keep the distribution out of capital reserves at the same level as last year, i. e. at CHF 15 per listed bearer share for the full financial year 2012.

We thank all our customers, business partners, and employees for their continued trust and support. Together we can live up to Gurit’s new corporate mission:

Delivering the Future of Composite solutions.

Best regards

Peter Leupp, Rudolf Hadorn,Chairman of the Board of Directors President and Chief Executive Officer

339.indd 9 11.03.2013 09:17:10

Wind energy

Gurit has developed a comprehensive range of products and technical services to support its customers and their chosen blade manufacturing technology.

Gurit differentiates itself with a comprehensive product offering covering all material needs to manufacture wind turbine blades. We are known for our enabling innovations which allow customers to reduce the weight and increase the length of their blades and consequently maximise the yield of wind turbines. Gurit is the global leader in carbon fibre prepregs and offers an exten-sive materials range and process know how allowing customers to improve production efficiencies, achieve better blade designs, maximise turbine up-time, and energy yield and thus contributes to the competitiveness of this key renewable energy source.

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Wind energy

page 11

Wind Energy benefitted from a considerable boom in the Amer-icas, supported by demand for Gurit’s market leading carbon fi-bre prepreg. While the European market remained stable, sales in China declined further after an already weak prior year. Well-received product launches under-pin Gurit’s position as innovator for the global wind energy market.

strongly diverging market trends in various global areasThe Wind Energy market showed di-verging developments in the various global market areas. Demand in the Americas was very strong through-out the first three quarters of the year. This was reflected in a high level of overall demand for prepregs and core materials in this market as key players hurried to benefit from US tax subsidies on fears that the so-called production tax credit for wind energy would not be extended. The second effect supporting demand in the Americas related to Gurit’s innovative carbon fibre prepregs which cus-tomers utilize to build extremely long and ultra-lightweight turbine blades often used for lighter-wind territories. Gurit has established it-self globally as the leading supplier

of carbon fibre prepregs and is well positioned to support the trend to-wards lighter and longer blades.

stagnating and declining markets in Europe and AsiaYear-over-year sales in Europe re-mained largely unchanged versus last year, as the market picked up in the second half of the year after a slow start. Demand in Asia – and especially in China – declined further from an already low prior-year level. Gurit therefore adjusted its global manufacturing base in line with over-all lower demand levels for wind energy materials: in October, the production of prepreg materials in Canada and China was mothballed and Gurit had to reduce its global work- force by approximately 150 people.

innovation strengthens market positionDespite lower demand levels and challenging market conditions, Gurit kept its global market position not least supported by a series of inno-vative product launches. Besides de-livering the biggest orders for inno-vative carbon fibre prepregs, Gurit also introduced new material con-cepts: AirstreamTM and VelinoxTM pro-vide convincing arguments for blade

builders to look at new design and materials options. In combination with Gurit’s SparPregTM materials, the AirstreamTM coating technology over-comes the generally conflicting ma-terials characteristics of low tack and high drape and allows for the cost effective manufacture of thick lami-nates at normal ambient tempera-tures. VelinoxTM is a next-generation resin platform specially developed for the fast cure of thick sections such as turbine blade spars or roots. Another important new product is a clear process coat for smooth blade finishes and again shorter finishing times.

A seamless track record in delivering the best product for a specific need and a strong innovation pipeline will enable Gurit to maintain and expand its market position in this long-term growth market, even if the shorter term market outlook remains cau-tious.

Wind Energy – target market Review 2012

carbon fibre prepreg demand in america supports sales in 2012





Marine

Tooling7.1% (12.5%)

339.indd 11 11.03.2013 09:17:35

Gurit provides high quality plugs and moulds for the global composite industry, opening new possibilities in cost-effective production for wind energy, marine, ocean energy, transport, and architectural markets.

tOOling Gurit is globally the largest independent, fully integrated, and highly specialized and flexible manufacturer of large composite production equipment – especially but not exclusively wind turbine plugs and moulds of up to 70 meters, as well as com-plementing heating, turn-over and closing and transport systems. With its high quality moulds manufactured in China, Gurit sets new benchmarks for mould delivery times and price, both on domestic Chinese and global export markets.

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tOOling

page 13

Tooling managed to expand its offering and market share in a very difficult market. Demand for new wind turbine blade moulds was weak throughout the reporting period.

strengthening competitiveness in a difficult marketWith an estimated share of over 50% of the addressable export mar-ket and building seven out of every ten externally fabricated moulds for the Chinese market, Gurit Tooling successfully expanded its market share and strengthened its position in the global wind energy supply chain.

Co-operation agreement with HawartGurit and Hawart Sondermaschinen-bau GmbH agreed in September 2012 to co-operate in the areas of mould and transport systems production for wind energy rotor blades. In Europe, Gurit customers now have access to a local and highly qualified installation and service organization for moulds. They will also benefit from the global availability of the Hawart transport systems. Custom-ers of Hawart benefit from the fully integrated, industrial mould making

capability of Gurit and additional ca-pacities to mass produce transport systems. Additionally, customers can now choose between Gurit or Hawart hinge systems which technically com-plement one another.

Gurit has already successfully manu-factured a significant number of blade transportation racks and wind ener-gy turbine tower transportation tools leveraging on its large steel welding capability at Taicang.

High quality and service at attractive pricesGurit Tooling is committed to contin-uous improvement and launched in this context a pro-active service ini-tiative in 2012. Service engineers are visiting customers to advise them on how to best use and maintain their moulds. This initiative was well received by the customers.

At the same time, Gurit strives to maximize the competitiveness of its tools with a series of cost optimiza-tion initiatives. These include for ex-ample the uncompromisingly accu-rate, yet less sturdy plugs when they do not require long-distance ship-ping or are not utilized multiple times. New coating surfaces improve the

longevity of moulds, reduce the cy-cle time of blade making and require less release agents. To lower trans-portation costs, Gurit now also offers split moulds for extralong blades.

looking beyond wind energyDemand for wind energy blade moulds is expected to gain some momentum during the current year as Chinese customers are now push-ing for new mould designs. While Gurit expects to see increasing de-mand from India and Europe, the American markets are believed to re-main depressed for the next quar-ters. Therefore, Gurit is increasingly looking at extending its large-scale plug and mould making capabilities to non-wind-energy customers – especially in Marine.

tooling – target market Review 2012

Witnessing globally low investments in new blade moulds





Marine

Tooling7.1% (12.5%)

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transpOrtatiOn

Gurit provides Class-A carbon composite body panels for the new Aston Martin Vanquish.

Gurit is a world-wide leading composite materials supplier for aircraft and rail interiors and secondary structures. our innovative composite materials systems enhance both energy efficiency in mass transit and passenger comfort. Gurit has also established itself as tier-1 supplier of Class-A carbon car body parts for high-end cars. supported by novel production processes and high-temperature resistant resins, the technology is now making inroads into the broader automotive industry.

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transpOrtatiOn

page 15

The positive sales trend in Trans-portation reflects both the con-tinued and steady growth in the large Aerospace business and the rapidly expanding automotive parts business.

taking automotive parts production to the next levelGurit’s automotive parts manufac-turing business has seen almost a doubling of sales in 2012. Our mar-ket-leading carbon fibre composite car body manufacturing technology is seeing growing interest in the premium car segment. Gurit won several contracts for car body parts for new car models of existing and new customers. With series pro-duction of cars from three major premium car manufacturers, 2013 is expected to see the same solid growth as in the year under review. The automotive parts production site successfully passed its TS 16949 re-audit.

2012 also marks a milestone from a technology point of view: While the carbon car body parts manufac-tured so far require a considerable amount of manual labour, Gurit has now completed the development of a new materials concept and a

novel press production technology. Together, these two innovations al-low reduced cycle times to less than ten minutes per component which now makes this technology availa-ble for bigger car manufacturing series of up to 30 000 cars per year. With its existing hand lay-up and its automated press technology, Gurit is now superbly positioned to serve the international automotive indus-try as it continues to convert more and more components from steel and aluminium to composites. We believe that the manufacturing tech-nology and the materials concept developed over the past years are now ready to take carbon car parts manufacturing to a next industrial level.

Helping aerospace to lower costThe market conditions in the global aerospace industry were generally favorable during the year under re-view, despite fierce competition in the airline market. The aircraft in-dustry remains at the forefront of adopting advanced composite solu-tions for an increasing range of ap-plications. Aiming both at exceed-ing existing physical requirements and achieving lower overall cost, material innovation is gaining impor-

tance. Gurit has introduced a series of lower cost material solutions based on changes in applied raw materials. These new material con-cepts should allow customers to increase their profitability. Sales rose at a stable single-digit rate, largely parallel to the higher build rates and the growing utilization of composites per aircraft at the major civil aircraft manufacturers and increased demand from non-commercial and smaller aircraft pro-ducers. During 2012, Gurit agreed a series of new multi-year supply contracts with all key customers specializing in different interior and secondary aircraft structures and contributing at various tier levels to the full range of the large Airbus aircraft family. Gurit also won new qualifications for floor materials from smaller aircraft manufacturers.

All aerospace manufacturing sites have successfully passed their ISO 9001 and EN 9100 audits. Gurit ex-pects the Aerospace market to con-tinue to develop at a solid single- digit percentage range during 2013 – again mainly reflecting the build rate of large passenger aircrafts.

transportation – target market Review 2012

continued growth in aerospace and rapidly growing automotive parts business





Marine

Tooling7.1% (12.5%)

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industrial and Marine

Gurit provided a structural engineering and B3 SmartPac materials solution for the construction of composite roof panels for The Base / Te Awa retail centre in Hamilton, New Zealand.

Gurit has been at the forefront of composite technology de-velopment for the global marine industry for over 30 years, and offers an unrivalled range of composite materials to customers across all sectors of the market. this same product and service offering is increasingly being used in new applica-tions as a growing number of industries are realizing the ben-efits of advanced composites, in industries like agriculture, construction, and medical.

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industrial and Marine

page 17

The Marine industry continued to recover globally, especially driven by composite boat builders in Scandinavia, Turkey, and the Mid-dle East. Newly established and emerging inroads into industries which are only now discovering the advantages of composites supported growth significantly in 2012 and are expected to be main growth drivers in the years ahead.

marine markets gradually picking upThe marine industry saw in 2012 some recovery after a particularly hard three years. However, boat sales globally were still some way off the highs seen in the mid to late 2000s. Gurit saw notable recovery in the superyacht sector, especially at com-posite builders in Scandinavia, Tur-key, and the Middle East, but marine sales overall for the company re-mained flat.

A significant achievement for Gurit in 2012 was the supply of prepreg and core materials to all four America’s Cup AC72 syndicates – Oracle Team USA, Emirates Team NZ, Luna Rossa Challenge, and Artemis Racing.

significant growth from non-marine industrial marketsIn 2012, Gurit’s growth for this busi-ness unit came from the increasing number of non-marine applications using composites. The agriculture and architecture sectors featured significantly, with materials sold for the fabrication of rotary milking platforms, crop spraying arms, trailer beds, as well as large roof panels and domes, railway electrification screens, and bridges. Sales into these two sectors are expected to continue to grow in the next twelve months. The potential for sales with-in the “general industrial” area is sig-nificant and in-roads were made into a number of other market sectors in 2012, which should bear fruit in 2013.

Continuous product development to address specific market needsIn 2012, the Industrial and Marine business unit focused on the devel-opment of a range of products with fire retardant properties, which are particularly critical for Gurit’s suc-cess in the architecture/construction and general industrial sectors. The new fire retardant laminating sys-tems have already been released to the market. Other products in this range are awaiting launch, pend-

ing certification test results. Also launched onto the marine market was Sparpreg™. Although an estab-lished product in our wind energy sector, this versatile unidirectional prepreg was launched for the effi-cient manufacture of high quality marine spars, producing thick lami-nates with minimal void content without the need for an intermediary de-bulking process.

industrial and marine – target market Review 2012

gradual recovery in marine and more rapid growth in general industrial applications





Marine

Tooling7.1% (12.5%)

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engineered structures

Gurit provided structural engineering, materials selection services and delivered a wide range of composite materials for the lighting masts of the Twin Sails Bridge crossing Poole Harbour, UK.

Combining its world-wide structural engineering teams and prototyping capabilities with business development, Gurit is rapidly building a new global offering comprising of composite structural engineering solutions and component manu-facturing for new and emerging applications such as ocean Energy, commuter bus components, and pedestrian bridges.

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engineered structures

page 19





Marine

Tooling7.1% (12.5%)

As composite materials find their way into a growing array of in-dustries and applications, Gurit is positioning itself as a composite parts and solution provider and engineering partner. Ocean energy, modular pedestrian bridges and lightweight components for com-muter buses continued to be the main focal points in 2012.

ocean Energy stands the testIn 2012, Gurit started the move to-wards developing new markets that could lead to strategically interesting component manufacturing opportu-nities, where Gurit could hold sig-nificant market shares in the future. A particular focus has been on devel-oping ocean energy applications, a field of activity where Gurit already has gathered valuable experience. Following the successful operation of the Andritz Hammerfest Strøm 1 MW turbine which was installed on December 26, 2011, this potential new energy source is gaining further momentum. A number of engineer-ing studies have been completed and Gurit anticipates these will lead to component manufacturing oppor-tunities in the coming years.

low-cost, easy-to-install modular bridgesEmphasis has also been placed on developing the market for composite pedestrian bridges utilizing Gurit’s efficient and low-cost manufacturing sites together with a modular con-struction approach to allow cost competitive supply coupled with the inherent advantages of reduced in-stallation costs and low maintenance regimes.

market-leading engineering for in-house and third party clientsGurit’s engineering team continues to support the Group’s designated material markets of Wind Energy, Transportation as well as Industrial and Marine with appropriate design and engineering knowledge. In addi-tion to this, our global base allows us to provide local support to our shared customers and to new clients inter-ested to learn how composites could enhance their market positioning and differentiation potential.

The consultancy business of Gurit is thus changing in line with market de-mand: While still a key area, Marine engineering jobs now only make up approximately 60% of the total engi-neering revenue as contracts in the

ocean energy, civil engineering, and other industrial markets increase.

Establishing a growing parts manufacturing businessRegarding composite component supply, Gurit has been successful in securing the order for continued supply of finished parts for the new bus for London. Based on a small initial series of buses, the project gained the green light in the second half of 2012; this now leads towards the series production of the new double-deck commuter buses for London. Throughout this flagship project, Engineered Structures suc-cessfully completed various studies and prototypes, such as the supply of a composite infrastructure com-ponent, which will undergo testing in 2013.

Engineered structures – target market Review 2012

building a platform for future growth as component manufacturer

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Gurit annual report 2012

Corporate GovernanCe

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1 Group structure and shareholders1.1 Group structure1.1.1 Operative Group structureThe Gurit Group is an international industrial group specializing in the development, production, and market-ing of advanced composite materials, technologies, tool-ing, and parts. Financial statements are prepared on a one segment company basis. An organizational chart depicting Group Organization for the financial year 2012 as well as the update effective as from February 1, 2013 can be found at the beginning of this report.

1.1.2 Legal structure of subsidiariesOf all the companies consolidated, Gurit Holding AG (the Gurit Group’s holding company) is the only one listed. It is headquartered in Wattwil/SG; Gurit bearer shares (security No. 801223, ISIN CH0008012236, symbol GUR) are listed on SIX Swiss Exchange; the registered shares are not listed. Based on the bearer shares year-end closing price of CHF 360.50 and equally valuating the par value adjusted registered shares, the market capitalization on December 31, 2012, amounted to CHF 168.7 million.

1.1.3 Information about the non-listed companies can be found in the overview on page 61 of the Financial Report.

1.2 Major shareholdersOn December 31, 2012, the Company knew of the fol-lowing shareholders holding over 3% of the voting rights in Gurit Holding AG:

Huwa Finanz- und Beteiligungs AG, Bahnhofstrasse 2, 9435 Heerbrugg, is holding 220 000 registered shares. This equals 9.4% of the share capital and 33.33% of all voting rights in Gurit Holding AG. The shares of Huwa Finanz- und Beteiligungs AG are controlled by Hans Huber, Appenzell.

Robert Heberlein, Tobelmülistrasse 20, 8126 Zumikon, held directly and indirectly via Burix Holding AG, Bleicher-weg 58, 8027 Zürich, 4.12% of the voting rights in Gurit since a purchase on January 28, 2008. 2.96 per-centage points thereof stem from the ownership of 19 545 registered shares and 1.14 percentage points from 7633 bearer shares. The amount of bearer shares has since increased to 10 740.

Martin Bisang, 8700 Küsnacht, held since a purchase on October 29, 2012 through Whale Holding AG, Baarer-strasse 2, 6300 Zug, with 35 000 bearer shares 5.3% of the voting rights in Gurit Holding AG.

Sarasin Investmentfonds AG, Wallstrasse 9, 4002 Basel, disclosed on January 20, 2011 that they held since a pur-chase on January 19, 2011 a total of 3.11% of the voting rights in Gurit Holding AG with 20 500 bearer shares.

The following chapter describes the principles of corporate governance applied at Group and senior management level at Gurit in accordance with the “Guidelines concerning information on Corporate Governance” published by SIX Swiss Exchange. Gurit also publishes a Remuneration Report, included as a separate chapter in this Annual Report. Unless otherwise indicated, all information refers to the financial year 2012 ended December 31, 2012. The key principles and rules on Corporate Gover-nance for Gurit are defined in the statutes and the organizational regula-tions; they are based on the recommendations set out in the “Swiss Code of Best Practice for Corporate Governance” published by economie-suisse. To make orientation easier, the order and numbering of the individual sections correspond to those used in the “Guidelines concerning information on corporate governance” published by SIX Swiss Exchange. Significant changes that have occurred between year-end and the copy deadline for this report have also been indicated as appropriate.


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Updated information on major shareholders is available on the SIX Swiss Exchange website at: http://www.six-swiss-exchange.com/shares/companies/major_share-holders_de.html?fromDate=19980101&issuer=14575

1.3 Cross-shareholdingGurit Holding AG has no cross-shareholding arrange-ments with other companies.

2 Capital structureInformation about the capital structure can be found in Gurit Holding AG’s statutes, in the Financial Report and the Statements on Gurit Holding AG as well as in the Investor Relations section on page 4 of this report. The statutes (in German) are available on the website at http://investors.gurit.com/corporate-governance-1.aspx

2.1 CapitalDetails on the capital are included in the notes to Gurit Holding AG’s financial statements on page 66.

2.2 Authorized or contingent capital in particularGurit Holding AG has no authorized or contingent capital.

2.3 Changes in equity of Gurit Holding AGIn the past three years (January 1, 2010, to December 31, 2012), the following changes in equity occurred.

IN CHF 1000December 31,

2012December 31,

2011December 31,

2010

Share capital 23 400 23 400 23 400

Reserves from capital contributions 32 724 39 744 11 700

Reserves for treasury shares 37 499 1 249

Free reserves – – 32 845

Retained earnings 62 099 56 703 50 785

Total equity 118 260 120 346 119 979

2.4 Shares and participation certificatesThe company’s share capital consists of 240 000 regis-tered shares with a par value of CHF 10 and 420 000 bearer shares with a par vlaue of CHF 50. Bearer shares are traded in the domestic segment of SIX Swiss Exchange (security No. 801223, ISIN CH0008012236, symbol GUR). All shares are fully paid up and entitled to dividends. All registered shares and bearer shares, re-gardless of their nominal value, are entitled to one vote.

Gurit Holding AG has not issued any participation certifi-cates.

2.5 Profit-sharing certificatesGurit Holding AG has not issued any profit-sharing certificates.

2.6 Restrictions on transferability of shares and nominee registrationsAccording to paragraph 4 of the statutes, only individuals who are entered in the Share Register may be recog-nized as the owners or beneficiaries of non-traded regis-tered shares. Registration of ownership may be refused only in cases where the purchaser does not expressly declare that he acquired the registered shares for his own account. Bearer shares listed on the stock market are freely transferable. There are no regulations to any other effect regarding nominee registrations.

Changes in the statutory regulations restricting the trans-ferability of registered shares require at least two-thirds of the votes represented at the Annual General Meeting and an absolute majority of the nominal value of the shares.

2.7 Convertible bonds and warrants/optionsGurit Holding AG has no outstanding convertible bonds nor options.

3 Board of DirectorsOn December 31, 2012, the Board of Directors of Gurit Holding AG consisted of five members.

3.1 and 3.2 Members of the Board of DirectorsThe personal details together with the other activities and vested interests of individual members of the Board of Directors are listed on the next page.

3.4 Election and term of officeThe Board of Directors is elected by the General Meeting for a term of three years. At the end of their term of office, members may be reelected. There is no statutory limit to the period of office of members of the Board of Directors. The members of the Board of Directors are elected globally.

The period of office is limited to the Annual General Meeting following the completion of the age of 72.

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http://www.six-swiss-exchange.com/shares/companies/major_shareholders_de.html?fromDate=19980101&issuer=14575

http://www.six-swiss-exchange.com/shares/companies/major_shareholders_de.html?fromDate=19980101&issuer=14575



paGe 22

Gurit Board of Directors

Peter Leupp Chairman of the Board of DirectorsEl.-Ing ETH ZurichSwiss citizen, 1951

Professional background (main stages)1977 – 1988 Various functions at BBC (now ABB)

in High Voltage Development1988 – 1989 CEO, Technochemie1989 – 1999 Various leading positions at High and Medium Voltage, ABB, Switzerland1999 – 2000 Local Head of Power Transmissions and Distribution division at ABB, Switzerland2001 – 2006 Country Manager in China; Chairman and President of ABB (China) Ltd2005 – 2006 ABB Region Manager North Asia2007 – 2012 Head Power Systems division, Member of the Group Executive Committee of ABB Ltd, SwitzerlandSince 2012 Executive Advisor ot the Group Executive Committee

of ABB Ltd., SwitzerlandOther important activities and vested interests– Member of the Board of Directors, ABB Ltd, India– Member of the Board of Directors, ABB (China) Ltd, China

Robert HeberleinMember of the Board of DirectorsDr. iur., attorney-at-lawSwiss citizen, 1941Non-executive member

Professional background (main stages)Since 1977 Partner/Counsel, Lenz & Staehelin, ZurichOther important activities and vested interests– Member of the Board of Directors of COLTENE Holding AG, Altstätten – Chairman of Huwa Finanz- und Beteiligungs AG, Heerbrugg

Nick HuberMember of the Board of DirectorsBusinessmanSwiss citizen, 1964Non-executive member

Professional background (main stages)1990 – 1995 Account Manager, IBM (Schweiz) AG1995 – 2005 Divisional Head, SFS Unimarket AGSince 2005 Member of the Executive Management

of SFS Services AG, Heerbrugg SGOther important activities and vested interests– Chairman of the Board of Directors of COLTENE Holding AG, Altstätten – Member of the Board of Directors, Orell Füssli Holding AG, Zürich– Member of the Board of Directors, Huwa Finanz- und Beteiligungs AG, Heerbrugg

Urs KaufmannMember of the Board of Directors Dipl. Ing. ETH ZurichSenior Executive Program IMDSwiss citizen, 1962Non-executive member

Professional background (main stages)1987 – 1993 Production and Sales Manager with Zellweger Uster AG, Uster and USA1994 – 1997 Managing Director of Henry Berchtold AG, Zell ZH, subsidiary of Huber+Suhner AG1997 – 2000 Division Manager and Member of the Executive Management Team at Huber+Suhner AGSince 2001 Member of Group Management Huber+Suhner AG2002 – present CEO Huber+Suhner AGOther important activities and vested interestsMember of the Board of Müller Martini Holding AG, HergiswilMember of the Board of Directors of SFS Holding AG, Heerbrugg

Peter Pauli Member of the Board of DirectorsMechanical engineer, postgraduate studies in industrial engineering, Advanced Management Program INSEADSwiss citizen, 1960Non-executive member

Professional background (main stages)1985 – 1995 Various functions inc. Member of Executive Board, Transelastic AG, CH-Wallbach (Siegling Group)1995 – 2000 Head of Executive Board, Siegling (Switzerland)2000 – 2002 Head Sales and Marketing, Siegling GmbH, Hannover2002 – 2010 CEO and Member of the Board of Directors, Meyer Burger AGSince 2011 CEO; Member and Delegate of the Board of Directors of Meyer Burger Technology AGOther important activities and vested interestsSince 2011 Member and Delegate of the Board of Directors of Meyer Burger Technology AG

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Members of the Board of Directors

Name Born Position Election Elected

in BoD to BoD until AGM

Peter Leupp 1951 Chairman 23.4.2010 2013

Robert Heberlein 1941 Member 22.11.1984 2014

Nick Huber 1964 Member 15.6.1995 2014

Urs Kaufmann 1962 Member 12.4.2006 2015

Peter Pauli 1960 Member 23.4.2012 2015

3.5 Internal organization3.5.1 Allocation of tasks within the Board of DirectorsThe Board of Directors acts as a joint body. Decisions are taken on the basis of the majority of the votes submitted.

The Chairman of the Board organizes and leads the work of the Board of Directors. In co-operation with the CEO, he makes sure that the other members of the Board receive the necessary information for their decision- making as well as the supervisory functions. He is the formal representative of the Group to the outside world. He may be assisted by one or two additional members defined by the Board.

3.5.2 Membership of the Board’s committees, their duties and responsibilitiesThe Board has formed two permanent committees:

Audit and Corporate Governance CommitteeChairman: Robert HeberleinMembers: Nick Huber, Urs Kaufmann, Peter Leupp, Peter Pauli

The Audit and Corporate Governance Committee assists the Board of Directors in its supervisory financial duties, checks the effectiveness, performance, and compensa-tion of the external auditors. The Audit and Corporate Governance Committee also oversees the financial re-porting processes within the Group.

Compensation and Nomination CommitteeChairman: Nick HuberMembers: Robert Heberlein, Urs Kaufmann, Peter Leupp, Peter Pauli

The Compensation and Nomination Committee defines the compensation of the members of the Board of Direc-tors, proposes to the Board of Directors the principles of compensation for members of the Group Management, and defines the guidelines for the selection and election of potential new members of the Board of Directors as well as the function of the Group’s CEO. The committee

approves appointments to the extended Group manage-ment made by the CEO, the remuneration system for the Group management as well as general principles of the Group’s human resource policy.

To consult and execute specific and short-term projects or issues, special ad-hoc committees can be nominated.

3.5.3 Working methods of the Board of Directors and its committeesThe Board of Directors meets annually at least for four ordinary meetings, generally one in each quarter. In 2012, the Board of Directors met seven times. All meetings were held in person.

The Audit and Corporate Governance Committee met twice in 2012 in person.

The Compensation and Nomination Committee met three times in 2012; twice in person and once by conference call.

Meetings are summoned in writing by the Chairman. An invitation together with a detailed agenda and documen-tation is sent to all participants at least five days in ad-vance of the date set for the meeting.

As a rule, the Chief Executive Officer and the Chief Financial Officer attend meetings of the Board of Directors and the Committees. In order to ensure that the Board has sufficient information to make decisions, other members of staff or third parties may also be in-vited to attend.

The Board is quorate if all members have been duly invited and the majority of its members take part in the decision-making process. Members may participate in deliberations and the passing of resolutions by telephone or other suitable electronic media if all participants are in agreement. The Board’s decisions are taken on the basis of the votes submitted. In the event of a tie, the Chair-man has the casting vote. Decisions may also be made in writing.

Proposals are sent to all members and they are regarded as passed if the majority of members agree uncondition-ally and no member insists on discussion of the issues in question within an agreed period of time.

Members of the Board of Directors are obliged to leave meetings when issues are discussed that affect their own interests or the interests of persons close to them.

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paGe 24

All proposals and decisions are entered in the minutes to the meeting. The minutes also contain a summary of important requests to speak during deliberations.

3.6 Definition of areas of responsibilityThe Board of Directors’ main duties are:– to formulate the general Group policy and the indus-

trial concept behind the Group as a whole, and to decide on any acquisition, sale, foundation or liquida-tion of subsidiaries as well as to approve of investment decisions exceeding CHF 500 000;

– to define the Group’s organizational structure and its organizing regulations;

– to define the Group’s financing strategy, decide on collective means of financing as well as to determine accounting, financial control, financial planning and to approve the financial statements;

– to appoint and dismiss Group Management and people entrusted with representation functions.

Apart from this, management is generally delegated to the CEO.

3.7 Information and control instruments vis-à-vis Group ManagementAs a rule, Group Management updates the Board of Directors and especially the Audit Committee on opera-tions and the Group’s financial position every month. In addition, the CEO and CFO report back on business and all matters of relevance to the Group at each Board meet-ing. Every member of the Board of Directors also has the right to ask any member of Group Management for information about matters within his remit, even outside meetings. The Chairman of the Board of Directors is also informed by the Chief Executive Officer about all busi-ness and issues of a fundamental nature or of special importance.

4 Group ManagementOn December 31, 2012, Gurit Holding AG’s Group Man-agement consisted of the CEO and the CFO as well as an Executive Management team consisting of additional five members. Effective as from February 1, 2013, Group Management only consisted of four people holding five functions:

Group Management as from February 2, 2013 consists of: Rudolf Hadorn as CEO and General Manager Gurit Composite Systems and Engineering; Markus Knüsli Amacker as CFO and Head Investor Relations; Stefan Gautschi as General Manager Gurit Composite Materials; Dr. Damian Bannister as Chief Technology Officer.

4.1 and 4.2 Members of Group ManagementThe personal details of all Group Management members in 2012 as well as in 2013 together with the other activi-ties and vested interests of individual members of Group Management are listed on the following pages.

4.3 Management contractsNo agreements pertaining to the provision of managerial services exist between Gurit Holding AG and other compa-nies or natural persons outside the Gurit Holding Group.

5 Compensation, shareholdings and loansThe information on compensation, shareholdings, and loans regarding members of the Board of Directors and Group Management are presented in a Remuneration Report as a separate chapter of this Annual Report on pages 28 to 29.

6 Shareholders’ participation rightsDetails of shareholders’ participation rights can be found in the statutes of Gurit Holding AG.

6.1 Voting right restrictions, and representationThe statutes contain no restrictions on voting rights. Every registered or bearer share represented at the General Meeting is entitled to one vote. A shareholder may be represented at the General Meeting only by a legally recognized proxy or another shareholder attend-ing the General Meeting.

6.2 Statutory quorumsUnless otherwise determined by law or the statutes, a General Meeting convened in accordance with the stat-utes is quorate regardless of the number of shareholders attending or the number of votes represented. To be valid, resolutions require an absolute majority of the votes submitted. In the event of a tie, the Chairman, who is always entitled to vote, makes the casting vote.

Important decisions of the General Meeting as defined in article 704 paragraph 1 of the Swiss Code of Obliga-tions, require at least two-thirds of the votes present and the absolute majority of the shares represented.

6.3 Convocation of the General MeetingThe ordinary General Meeting takes place annually within six months of the end of the Company’s financial year. Extraordinary General Meetings can be called by deci-sion of the General Meeting, the Board of Directors, at the request of the auditors, or if shareholders represent-ing at least a tenth of the Company capital submit a re-

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corporate Governance

paGe 25

Gurit Executive Committee

Rudolf HadornChief Executive Officer and General Manager Gurit Composite Solutions and EngineeringMBA University of St GallenSwiss citizen, 1963

Professional background (main stages)1989 – 2000 Management and Executive positions with GM in Europe2000 CEO, Krone GmbH, Berlin, CFO Krone Group2002 CFO, Ascom Group, Bern2004 – 2007 CEO, Ascom Group, BernSince 1.11.2007 CEO, Gurit; since February 1, 2013 also General Manager

Gurit Composites Solutions and EngineeringOther important activities and vested interests– Member of the Board of Directors of Looser Holding AG, Arbon– Member of the Board of Directors of Spirella s.a., Embrach– Advisory Board Member of Cross 1 Private Equity Firm

Markus Knüsli AmackerChief Financial Officer, Head of Investor RelationsDegree in economics HEC LausanneSwiss and French citizen, 1962

Professional background (main stages)1989 – 1993 General Audit Supervisor, Coopers & Lybrand, Geneva, 1993 – 1997 Manager Controlling and Consolidation,

Tetra Laval International, Pully 1997 – 2003 CFO, Nextrom Group, Morges2004 – 2007 CFO, Unicible SA, Prilly Since 1.10.2007 CFO, Gurit

Damian BannisterChief Technology OfficerBachelor of Science, PhDBritish citizen, 1970

Professional background (main stages)1996 Joined former SP Systems Technical Support2000 Wind Energy Sales Project Engineer, SP Systems2002 Technical Manager Wind Energy, SP Systems2004 Development and Processing Manager, SP Systems2005 Head of Technology, SP SystemsSince 2006 Chief Technology Officer, Gurit

Stefan Gautschi* General Manager Gurit Composite MaterialsMBA University of Little Rock at Arkansas; BA Business Administration HWV, ZürichSwiss citizen, 1968

Professional background (main stages)1995 – 2000 Georg Fischer Piping Systems, Schaffhausen,

Functions in Finance and Marketing1997 – 1998 Georg Fischer Sloane Inc., Little Rock, AR, USA,

CFO/Controller2001 – 2003 Georg Fischer Piping Systems Shanghai Ltd,

Shanghai, China, General Manager2004 – 2009 Georg Fischer Piping Systems, Schaffhausen, CFO/CIO2009 – 2011 Georg Fischer Piping Systems, Schaffhausen,

VP Operations2011 – 2012 Georg Fischer Piping Systems, Schaffhausen,

VP Global Business Unit Utility Since 1.2. 2013 General Manager Gurit Composite MaterialsOther important activity and vested interestMember of the Board of Swiss Plastics Association

Rudolf Gerber **General Manager Wind Energy Bachelor of Science in Engineering Swiss citizen, 1958

Professional background (main stages)1986 – 1988 Area Sales Manager, Varian AG, Zug 1988 – 1995 Managing Director, Schlatter Ltd., Harrogate/UK 1995 – 2001 Divisional Manager, Alcan Airex AG, Sins2002 – 2008 CEO, Armstrong Metal Ceilings Group, St Gallen 2008 – 31.1.2013 General Manager Wind Energy, Gurit

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paGe 26

Paul Goddard**General Manager Marine (ad interim)39 years of Marine Industry experienceBritish and New Zealand citizen, 1956

Professional background (main stages)1983 – 1990 Founder and Managing Director of Invincible Industries

(sold to Mitchell sports, NZ)1991 – 2005 Founder and Managing Director of Aquapro

International Ltd (sold to Survitec group UK in 2002)2005 – 2007 Consultant to marine safety and sporting goods

manufacturer China2007 Joined High Modulus as Chief Operations Officer2008 CEO High Modulus Group2009 Acquisition of High Modulus group by Gurit;

Gurit Director of Marine APAC2010 Gurit Director of Marine North America and APAC2012 – 31.1.2013 General Manager Marine (ad interim)

Kees Reijnen** General Manager TransportationMSc in PhysicsDutch citizen, 1957

Professional background (main stages)1987 – 1991 European Sales and Marketing, Fluid Dynamics Corp. 1991 – 1995 Worldwide Sales/Marketing Director, Filtration Systems,

Schenk Filterbau GmbH 1995 – 1998 Co-Founder and Managing Director, WPT GmbH

Water Recycling Technology1998 – 2006 Managing Director; Enka-Tecnica,

Enka-Tecnica was acquired by Gurit in 2000 2006 Business Manager Transportation, Gurit2008 – 31.1.2013 General Manager, Transportation, Gurit

Binjiang (“Bing”) Chen**General Manager ToolingPhD Ceramics Science and EngineeringUS citizen, 1961

Professional background (main stages)1998 – 2004 Various Management Positions, Philips Electronics2004 – 2009 General Manager, Metaldyne Automotive Components

Suzhou, China 2009 – 2011 General Manager, Rotary Lift Asia, Haiman, China Since 2011 General Manager Tooling, Gurit

Graham Harvey**

General Manager Engineered Structures

BSc Ship Science

British citizen, 1965

Professional background (main stages)

1991 – 2000 Engineering Consultancy Manager, SP Technologies

2000 – 2004 Head of Technology, SP Systems

2005 Managing Director, SP Systems Europe

2006 Business Manager Marine, Sports & Civil Engineering, Gurit

2008 – 2012 General Manager Marine, Gurit

Since 2011 General Manager Engineered Structures, Gurit

* As from February 1, 2013 ** Until January 31, 2013

quest in writing, stating their purpose, to the Board of Directors. The convocation is announced once in the Swiss Official Gazette of Commerce ( Schwei zerisches Handelsamtsblatt) and published in various newspapers. Registered shareholders are also informed in writing.

6.4 AgendaThe statutes contain no regulations relating to agendas that differ from those set fourth by the law. Accordingly, shareholders representing shares of a par value of CHF 1 million may request items to be included in the agenda.

6.5 Entries in the share registerThe names and addresses of owners and beneficiaries of registered shares are entered in the share register. Shareholders and/or beneficiaries of registered shares are entitled to vote if they are already entered in the share register at the time when invitations are sent out to the General Meeting.

7 Changes of control and defense measures7.1 Public purchase offersThe threshold at which a shareholder is obliged to make an offer for all Gurit Holding AG’s stock in accordance with article 32 paragraph 1 of the Bundesgesetz über

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die Börsen und den Effektenhandel (Swiss Law on Stock Exchanges and Securities Trading) of March 24, 1995, has been raised to 49% of the total votes.

7.2 Clauses on changes of controlGurit Holding AG has no agreements containing clauses of this type.

8 Auditors8.1 Duration of mandate and lead auditor’s term of officeIf its predecessors are included, Pricewaterhouse-Coopers AG, Zurich, has been Gurit Holding’s statutory auditors since 1984 and Group auditors since 1994. Stefan Gerber is lead auditor since 2009.

8.2 Auditing feesThe total sum charged during the year under review by PricewaterhouseCoopers in its capacity as auditor amounted to CHF 469 784.

8.3 Additional feesFees for additional services supplied by the auditors during the year under review amounted to CHF 297 472. These fees consist of CHF 233 946 for tax advisory, and CHF 63 526 for other services. There were no transaction fees in 2012. The additional fees represent 63% of the auditing fees disclosed under 8.2.

8.4 Supervisors and control instruments pertaining to the auditorsThe supervision and verification of the external audit is exercised by the Audit and Corporate Governance Com-mittee. The Audit and Corporate Governance Committee evaluates together with Group Management the perfor-mance of the auditors and recommends the indepen-dent external auditor to the Board of Directors for elec-tion by the General Assembly. The Audit and Corporate Governance Committee approves the audit plans and meets at least once a year with the auditors. The auditors prepare a report for the Audit and Corporate Governance Committee regarding the findings of the audit, the finan-cial statement, and the internal control. In collaboration with Group Management the independence of the auditors is evaluated annually. In particular and for this purpose the worldwide fees of the audit are presented, discrepancies with the estimated costs analyzed and explained. In the year under review, the auditors attended one of the two meetings of the Audit and Corporate Governance Committee.

9 Information policyGurit Holding provides its shareholders with information in the form of the Annual Report and a Half-year Report. Important events are published immediately through press releases and/or letters to shareholders.

10 InternetShareholders and other interested parties can also obtain information about the Group on the Internet at www.gurit.com.

E-mail alerts: The latest financial information from Gurit Holding can be received via e-mail alert; sign-up is avail-able at http://www.gurit.com/register-for-news-alerts.aspx

11 Ad hoc publicityGurit Holding AG maintains regular contact with the financial world in general and with important investors. At the same time, it abides by the legally prescribed prin-ciple of treating all parties equally as regards communi-cation. Relevant new facts are published openly and are available to all interested parties.

Important datesThe most important dates for publications this year and next are:

March 12, 2013 Presentation of annual results 2012;

Financial analysts’ and media conference;

Publication of Annual Report 2012

April 9, 2013 Annual General Meeting

Press release on AGM decisions

and Q1 sales

August 23, 2013 Publication of Half-year Report 2013

Financial analysts’ and media conference

October 25, 2013 Press release on Q3 sales

End of January 2014 Press release on full year sales 2013

March 14, 2014 Presentation of annual results 2014;

Financial analysts’ and media conference;

Publication of Annual Report 2013

April 10, 2014 General Meeting

Contact addressGurit Services AG, Group CommunicationsBernhard Schweizer Schaffhauserstrasse 339CH-8050 ZürichPhone +41 (0)44 316 1550Telefax +41 (0)44 316 1569E-mail: [email protected]

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remuneration report

paGe 28

This report describes the principles of remuneration at the Gurit Group. Unless otherwise indicated, all information refers to the financial year 2012 closed on December 31, 2012. This report also follows the recommenda-tions defined in Appendix 1 to the Swiss Code of Best Practice for Corporate Governance published by economiesuisse and complies with Chapter 5 of the Appendix to the SIX “Guidelines concerning information on corporate governance” and the requirements regarding transparency as defined in article 663bbis and article 663c Code of Obligations.

Remuneration policy

Gurit is a globally active industrial group. The Company maintains a remuneration policy in accordance with gen-eral market and employment practices in the various countries in which we operate. The compensation re-flects the market and employment conditions in the rel-evant country as well as the individual qualifications and requirements needed for the specific position. In addi-tion, the overall remuneration policy of Gurit reflects indi-vidual performance on all Group levels. As a general rule, the compensation for all Gurit employees consists of a fixed and a success-dependent variable salary element; these two form in combination the target market salary for a given position. Production employees on the one hand and Management and other non-production em-ployees on the other hand benefit from two different compensation schemes:

Compensation for production employeesProduction employees benefit on top of their fixed salary from an individual bonus which can range from 5% of an employee’s fixed salary at target goal achievement up to 8% at cap level. The objectives for this bonus are defined at site level and approved by Group Management. They include objectives for health and safety, quality, produc-tivity, and attendance. The achievement of these objec-tives is discussed with all operations employees four times per year, or in certain cases monthly, and the bo-nus is generally paid out on a quarterly basis, reflecting the need for operational flexibility. The bonus payments are calculated by the local site management and ap-proved by Group Management. Performance Incentive Scheme The Performance Incentive Scheme for Management and all other non-production employees consists of a Business Unit or Group component and an individual bonus ele-ment. The total bonus per employee may vary between maximum 8% and maximum 150% of the fixed salary, de-

pending on the hierarchical level of the employee in the Group. The Individual Bonus element may contribute 20 to 70% to the total bonus. The Business Unit or Group bonus thus defines 30 % to 80% of the total bonus.

Business Unit or Group Bonus component: The Business Unit or Group Bonus element is annually calculated con-sidering key performance indicators such as sales, oper-ating profit, and net working capital per Business Unit or on Group level. The respective targets are proposed by Group Management and approved by the Compensation and Nomination Committee. The bonus component based on Business Unit performance may vary from 0% to 30% of the total bonus. The bonus component based on Group performance may vary between 0% and 80% of the total bonus. The Business Unit or Group bonus achievements are calculated by the CFO and approved by the Compen-sation and Nomination Committee. Ths committee re-serves itself the right to amend the Business Unit or Group bonus targets and achievements to take major changes in the economic environment into consideration. The level of the Business Unit or Group bonus element has no impact on the level of achievement of the individ-ual bonus.

Individual bonus: The fulfillment of the individual and /or factory related objectives and targets is assessed on a yearly basis by the line manager of each individual, based on objectives defined in Q1.

Bonuses are paid out after publication of the annual re-sults.

Share-based compensation for members of the Board of Directors, the CEO, and select categories of ManagementEffective starting from the year 2010, the CEO of the Group receives in addition to the cash compensation a fixed number of shares as part of his remuneration. The

remuneration report

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remuneration report

paGe 29

members of the Board of Directors receive in addition to a fixed amount in cash a fixed number of shares as part of their compensation. The Board of Directors approved a Share Participation Plan for Management on April 29, 2011. The plan entered into force on that date and aims at providing to select categories of Management a part of their variable compensation in form of bearer shares of Gurit Holding AG to build a long-term commitment to Gurit. Share-based compensation and shareholdings of Executive Management members and members of the Board of Directors are shown in detail on page 68 and 69 of this report.

Pension scheme for Group ManagementA supplementary pension scheme exists for certain members of Group Management according to the prac-tices of the various jurisdictions. Half of the premiums is financed by the Management members themselves.

Compensation for members or the Board of Directors and Group ManagementThe compensation paid to the Chief Executive Officer is determined by the Compensation and Nomination Committee. The fixed compensation is based on what has been assessed by the Company as industry standard for comparable listed Swiss industrial companies of sim-ilar size in terms of net sales (around CHF 500 million) and complexity based on the Compensation and Nomi-nation Committee’s members experience. The CEO also benefits from the Performance Incentive Scheme and the share-based compensation as described above.

The fixed amount paid to the other members of Group Management is determined by the Chief Executive Offi-cer, subject to approval by the Compensation and Nomi-nation Committee. The salaries are decided based on the market and employment conditions in the relevant coun-try as gathered from various sources as well as the indi-vidual qualifications and requirements needed for the specific position. The members of the Executive Group Management team also participate in the Performance Incentive Scheme. During the year under review, the variable compensation paid to members of Group Man-agement varied from 0% to 36% (previous year 40%) of the individual fixed compensation. The total amount paid to Group Management increased in 2012 compared with 2011 mainly due to an increase of the number of mem-bers of Group Management.

Members of the Board of Directors are paid a fixed amount in cash for their services in addition to the yearly share allotment disclosed above. The yearly compensation is de-termined by the Board of Directors upon recommendation by the Compensation and Nomination Committee. The Compensation and Nomination Committee bases its judg-ment on industry standards for comparable listed Swiss

industrial companies of similar size in terms of net sales (around CHF 500 million) and complexity. For the year under review, the yearly compensation was slightly lower, reflecting lower related social security costs.

Gurit has no executive members of the Board of Directors. Non-executive members of the Board of Directors do not receive any variable, performance or target-oriented com-pensation. There are no additional share participation or option programs for members of the Board of Directors or Executive Group Management members apart from the above disclosed and discussed compensation scheme and the disclosed share-based compensation.

Definition and review of remuneration policy and compensationThe Compensation and Nomination Committee of the Board of Directors annually reviews the remuneration policy. The yearly variable compensation of the Group Management is discussed by the Compensation and Nomination Committee once the full income statement is available and submitted to the Board of Directors. Gurit did not appoint an external consultant to develop its remuneration policy. Gurit did not pay any exit remu-neration to anyone leaving office during the year under review. There was no remuneration paid to former mem-bers of governing bodies during the year under review.

No loans, securities, advantages or credits are granted to members of the Board of Directors of Executive Group Management or parties closely linked to them. There were no options issued on Gurit bearer shares on December 31, 2012 in the context of a participation program.

Disclosure of compensation payments during the year under reviewCompensation of members of the Board of Directors, the Group Management as well as the highest-paid member of the Group Management are disclosed in accordance with article 663bbis and article 663c of the Swiss Code of Obligations in the Financial Report of Gurit Holding AG under note 8, Management compensa-tion, on page 68.

Share ownership of governing bodiesThe members of the Group Management held together on December 31, 2012 directly and indirectly a total of 2 266 bearer shares or 0.34% of the voting rights of Gurit. The members of the Board of Directors held together on December 31, 2012 directly and indirectly a total of 11 605 bearer and 19 545 registered shares. This equates 4.72% of the voting rights in Gurit.

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financial report

paGe 31

financial report

Gurit Group

conSoliDateD income Statement paGe 32

conSoliDateD Balance Sheet paGe 33

conSoliDateD caSh flow Statement paGe 34

conSoliDateD Statement of chanGeS in equity paGe 35

noteS to the conSoliDateD financial StatementS paGe 36

report of the Statutory auDitor on the conSoliDateD financial StatementS paGe 62

Gurit holDinG aG

income Statement paGe 63

Balance Sheet paGe 64

noteS to the financial StatementS paGe 65

propoSeD appropriation of availaBle earninGS anD

reServeS from capital contriButionS paGe 70

report of the Statutory auDitor on the financial StatementS paGe 71

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financial report – Gurit Group

paGe 32

conSoliDateD income Statement

IN CHF 1000 Note

Year ended December 31,

2012


2011

Net sales 5 351 020 344 719

Other operating income 6 1 602 3 151

Change in inventories of finished and unfinished goods – 8 974 4 438

Material expense – 187 490 – 191 303

Personnel expense 7 – 76 801 – 75 951

Other operating expenses 8 – 43 983 – 43 150

Impairment, net of reversals 20, 21 – 10 650 – 1 752

Depreciation 20 – 11 190 – 11 248

Amortization 21 – 804 – 761

Operating profit 12 730 28 143

Finance expense 9 – 3 352 – 4 713

Finance income 10 554 2 504

Ordinary result 9 932 25 934

Non-operating result 11 1 190 2 903

Profit before tax 11 122 28 837

Income tax credit/(expense) 12 2 625 – 6 497

Profit for the year 13 747 22 340

Earnings per share 13

Basic earnings per bearer share CHF 29.39 CHF 47.83

Diluted earnings per bearer share CHF 29.39 CHF 47.83

Basic earnings per registered share CHF 5.88 CHF 9.57

Diluted earnings per registered share CHF 5.88 CHF 9.57

The accompanying notes form an integral part of these consolidated financial statements.

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paGe 33

conSoliDateD Balance Sheet

IN CHF 1000 NoteAt December 31,

2012 At December 31,

2011

Assets

Cash and cash equivalents 37 266 19 861

Derivative financial instruments 15 38 206

Trade receivables 16 61 053 81 471

Other receivables 17 5 044 7 731

Prepayments and accrued income 18 7 014 8 091

Inventories 19 36 560 49 062

Current assets 146 975 166 422

Other receivables 17 883 1 600

Deferred income tax assets 24 1 017 2 216

Property, plant and equipment 20 77 053 97 139

Intangible assets 21 5 666 5 531

Non-current assets 84 619 106 486

Total assets 231 594 272 908

Liabilities and equity

Borrowings 22 16 377 25 156

Derivative financial instruments 15 186 629

Trade payables 12 807 24 221

Other payables 7 145 6 904

Accrued liabilities and deferred income 23 10 956 14 087

Provisions 25 2 091 1 953

Current liabilities 49 562 72 950

Borrowings 22 14 886 27 306

Derivative financial instruments 15 93 –

Deferred income tax liabilities 24 901 12 862

Provisions 25 2 794 13 861

Non-current liabilities 18 674 54 029

Total liabilities 68 236 126 979

Share capital 23 400 23 400

Capital reserve 32 724 39 744

Treasury shares – 37 – 499

Hedging reserve – 68 – 187

Currency translation adjustments – 28 929 – 28 055

Offset goodwill – 27 920 – 39 157

Retained earnings 164 188 150 683

Total equity 26 163 358 145 929

Total liabilities and equity 231 594 272 908


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paGe 34

conSoliDateD caSh flow Statement

IN CHF 1000 Note


2012


2011


Adjustments for:

Impairment, net of reversals 20, 21 10 650 1 752

Depreciation and amortization 20, 21 11 994 12 009

Finance income and expense, net 9, 10 2 798 2 209

Income tax (credit)/expense 12 – 2 625 6 497

Net gains from disposal of fixed assets 6, 8, 11 – 1 059 – 2 880

Losses from disposal of intangible assets 8 36 146

Inventory write-down 3 940 1 362

Other non-cash items 1 681 – 1 045

Working capital changes (excluding the effects of acquisitions and disposals of subsidiaries):

Change in trade receivables 17 317 – 29 217

Change in inventories 8 488 – 8 817

Change in other receivables and prepayments and accrued income 4 326 294

Change in trade and other payables and accrued liabilities and deferred income – 13 169 3 498

Change in provisions 1 165 – 861

Cash generated from operations 59 289 7 287

Finance cost, net paid – 1 723 – 2 384

Income tax paid – 9 247 – 7 377

Net cash flow from operating activities 48 319 – 2 474

Purchase of property, plant and equipment 20 – 4 947 – 9 773

Proceeds from sale of property, plant and equipment 3 624 4 163

Purchase of intangible assets 21 – 1 076 – 335

Repayments of loans receivable 851 –

Acquisition of subsidiaries 29 – 881 – 17 905

Net cash flow from investing activities – 2 429 – 23 850

Proceeds from/(repayments of) current borrowings – 15 922 – 569

Proceeds from/(repayments of) non-current borrowings – 5 000 15 000

Distribution to shareholders 14 – 7 018 – 7 004

Purchase of treasury shares – 220 –

Net cash flow from financing activities – 28 160 7 427

Net change in cash and cash equivalents 17 730 – 18 897

Cash and cash equivalents at the beginning of the year 19 861 40 055

Net change in cash and cash equivalents 17 730 – 18 897

Exchange (losses)/gains on cash – 325 – 1 297

Cash and cash equivalents at the end of the year 37 266 19 861


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conSoliDateD Statement of chanGeS in equity

IN CHF 1000Share

capitalCapital reserve

Treasury shares

Hedging reserve

Currency translation

adjustmentsOffset

goodwillRetained earnings

Total equity

Balance at January 1, 2011 23 400 39 744 – 1 249 – 729 – 29 795 – 29 230 135 648 137 789

Profit for the year – – – – – – 22 340 22 340

Changes in hedging reserve – – – 542 – – – 542

Currency translation adjustments – – – – 1 740 – – 1 740

Total income and expense for the year – – – 542 1 740 – 22 340 24 622

Distribution to shareholders (note 14) – – – – – – – 7 004 – 7 004

Usage of treasury shares for share-based compensation – – 750 – – – – 750 –

Share-based compensation – – – – – – 449 449

Total transactions with shareholders – – 750 – – – – 7 305 – 6 555

Goodwill directly offset with equity (note 26) – – – – – – 9 927 – – 9 927

Balance at December 31, 2011 23 400 39 744 – 499 – 187 – 28 055 – 39 157 150 683 145 929

Profit for the year – – – – – – 13 747 13 747

Changes in hedging reserve – – – 119 – – – 119

Currency translation adjustments – – – – – 874 – – – 874

Total income and expense for the year – – – 119 – 874 – 13 747 12 992

Distribution to shareholders (note 14) – – 7 020 – – – – 2 – 7 018

Usage of treasury shares for share-based compensation – – 682 – – – – 682 –

Share-based compensation – – – – – – 438 438

Purchase of treasury shares – – – 220 – – – – – 220

Total transactions with shareholders – – 7 020 462 – – – – 242 – 6 800

Goodwill directly offset with equity (note 26) – – – – – 11 237 – 11 237

Balance at December 31, 2012 23 400 32 724 – 37 – 68 – 28 929 – 27 920 164 188 163 358


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paGe 36

1 General informationGurit Holding AG, incorporated in Wattwil, Switzerland (“the Company”) and its subsidiaries (together “the Group”) are specialized in the development and manufac-ture of advanced composite materials, related technolo-gies and selected finished parts and components. The comprehensive product range comprises fiber reinforced prepregs, structural core products (man-made materials and balsa wood), gel coats, adhesives, resins, and con-sumables.

The bearer shares of Gurit Holding AG are listed on SIX Swiss Exchange; the registered shares are mostly in firm hands and are not listed.

These consolidated financial statements were signed off by the Board of Directors on March 8, 2013, for publi-cation. The Annual General Meeting of shareholders, scheduled for April 9, 2013, will vote on these consoli-dated financial statements.

2 Summary of significant accounting policiesThe principal accounting policies applied in the prepara-tion of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparationThe consolidated financial statements of Gurit Holding AG have been prepared in accordance with the complete set of Swiss GAAP FER and are in conformity with the Swiss law and the requirements of the SIX Swiss exchange. They have been prepared under the historical cost convention, as modified by the revaluation of securi-ties (including derivative financial instruments) at fair value through profit or loss. All financial information in-cluded in the consolidated financial statements and notes to the consolidated financial statements are pre-sented in Swiss francs and rounded to the nearest thou-sand unless otherwise stated.

The preparation of financial statements in conformity with Swiss GAAP FER requires the use of certain critical accounting estimates. It also requires Management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where as-sumptions and estimates are significant to the consoli-dated financial statements, are disclosed in note 3.

2.2 Consolidation2.2.1 Changes in the scope of consolidationIn 2012, the Group incorporated the new subsidiaries Gurit do Brasil Representações Ltda, in Brazil, and Balsa-block CIA. LTDA., in Ecuador.

As at March 30, 2011, the Group acquired 100% of the ownership interest in Balseurop Ecuato Española, S.L., in Spain, together with its 99.4% owned subsidiary Delegación Ecuatoriana de Balsaflex España, Del.E.B.ES, CIA, LTDA, in Ecuador. In addition, the Group liquidated its wholly owned subsidiary Gurit (New Zealand) Ltd., in New Zealand, in 2011.

If the acquisition in the year 2011 had occurred on Janu-ary 1, 2011, total net sales of the Group would have been higher by CHF 8 270 000 in 2011. Further details on the scope of consolidation and changes in the scope of con-solidation are provided in notes 29 and 32.

noteS to the conSoliDateD financial StatementS

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paGe 37

2.2.2 SubsidiariesSubsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompany-ing a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are consid-ered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. The net assets taken over in an acquisition are measured initially at fair value at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisi-tion over the Group’s share of the newly valued net assets taken over is designated as goodwill. At the date of the acquisition, the acquired goodwill is offset with equity. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the differ-ence is also offset in equity. Subsequent adjustments to any contingent purchase consideration are recorded as an adjustment to the acquisition’s cost and to goodwill. Adjustments to the fair values of the acquired net assets are recorded in the income statement in subsequent periods.

Intercompany transactions, balances, and unrealized gains and losses on transactions between Group compa-nies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consis-tency with the policies adopted by the Group.

2.3 Foreign currency translation2.3.1 Functional and presentation currencyItems included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Swiss francs, which is the Company’s functional and the Group’s pre-sentation currency.

2.3.2 Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of mone-tary assets and liabilities denominated in foreign cur-rencies are recognized in the income statement, except when deferred in equity as qualifying cash flow hedges.

2.3.3 Group companiesThe results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presen-tation currency as follows:(a) assets and liabilities for each balance sheet presented

are translated at the closing rate at the date of that balance sheet;

(b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the trans-action dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(c) all resulting exchange differences are recognized as a separate component of equity.

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paGe 38

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders’ equity. When a foreign opera-tion is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the income statement as part of the gain or loss on sale.

Fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. For pur-poses of the disclosure of the effects of a theoretical capitalization, goodwill is treated as an asset of Gurit Holding AG and is carried in the Company’s functional currency.

The principal exchange rates versus the Swiss franc were as follows:

December 31, 2012 Ø 2012 December 31, 2011 Ø 2011

1 USD 0.9139 0.9380 0.9399 0.8871

1 EUR 1.2077 1.2055 1.2171 1.2336

1 GBP 1.4768 1.4865 1.4526 1.4221

1 CAD 0.9170 0.9384 0.9218 0.8971

1 CNY 0.1450 0.1488 0.1480 0.1374

2.4 Revenue recognitionRevenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates, and discounts and after eliminating sales within the Group.

The Group recognizes revenue when the amount of revenue can be reliably measured and when it is probable that future economic benefits will flow to the entity. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved.

2.5 Employee benefits2.5.1 Pension obligationsThe obligations of all Group companies in respect of re-tirement, death and disability are based on local rules and regulations in the respective countries. The obliga-tion in respect of the pension plans of all Group compa-nies is with the pension institution and not with the Group companies.

2.5.2 Termination benefitsTermination benefits are payable when employment is terminated by the Group before the normal termination date, or whenever an employee accepts voluntary redun-dancy in exchange for these benefits. The Group recog-nizes termination benefits when it is demonstrably com-mitted to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination bene-fits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than twelve months after the balance sheet date are discounted to present value. Provisions for termination benefits are recorded in the consolidated balance sheet within “provisions”.

2.5.3 Share-based compensationThe Group operates different equity-settled share-based compensation schemes, under which the entity receives services from directors and from employees for equity instruments of the Company (see note 30). The fair value of the services received in exchange for the grant of equity instruments is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the equity instruments granted.

2.6 Current and deferred income taxThe tax expense for the period comprises current and deferred income tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized directly in equity. In this case, the tax is also recognized in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

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Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. How-ever, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

2.7 Distributions to shareholdersDistributions to the Company’s shareholders are recog-nized as a liability in the Group’s financial statements in the period in which the distributions are approved by the Company’s shareholders.

2.8 Derivative financial instruments and hedging activitiesDerivatives are initially recognized at fair value on the date a derivative contract is entered into and are sub-sequently remeasured at their fair value. The method of recognizing the resulting gain or loss depends on wheth-er the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: hedges of the fair value of recognized assets or liabilities or a firm com-mitment (fair value hedge); or hedges of variability in cash flow for a particular risk associated with a recog-nized asset or liability or a highly probable forecast trans-action (cash flow hedge).

The Group documents at the inception of the transac-tion the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging trans-actions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair values of various derivative instruments used for hedging purposes are disclosed in note 15. Movements on the “hedging reserve” in shareholders’ equity are shown in the statement of changes in equity. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than twelve months, and as a current asset or liability when the remaining maturity of the hedged item is less than twelve months. Trading derivatives are classi-fied as a current asset or liability.

2.8.1 Cash flow hedgesThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss (for example, when the forecast sale that is hedged takes place).

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge account-ing, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the in come statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

2.8.2 Derivates accounted for at fair value through profit or lossCertain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any of these derivative instruments are recognized immediately in the income statement.

2.9 Cash and cash equivalentsCash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

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2.10 Trade receivablesTrade receivables are valued at par value less impair-ment, if any. A provision for impairment of trade receiv-ables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorga-nization, and default or delinquency in payments are considered indicators that the trade receivable is im-paired. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized in the income statement within “other operating expenses.” When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against “other operating expenses” in the income statement.

2.11 InventoriesInventories are stated at the lower of average cost price or manufacturing cost and net realizable value. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs, and related pro-duction overheads (based on normal operating capacity). It excludes borrowing costs. Early payment discounts are treated as a deduction of the purchase price. Net re-alizable value is the estimated selling price in the ordi-nary course of business, less applicable variable selling expenses.

2.12 Property, plant and equipmentProperty, plant and equipment are stated at historical cost less depreciation. Historical cost includes expen-diture that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future eco-nomic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecog-nized. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:– Plant and equipment: 4 –10 years,

in exceptional cases 15 years– Buildings: 40 – 50 years,– Other tangible assets: 4 –10 years

Any property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

The assets’ useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.14). Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within “other operating income” or within ”other operating expenses” in the income statement.

2.13 Intangible assetsIntangible assets contain patents, land-use rights, soft-ware and other intangible assets. They are carried at his-torical cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of the intangible assets over their estimated useful lives, which for patents, software, and other intan-gible assets normally do not exceed five years, but can extend to twelve years in exceptional cases. Land-use rights are amortized over 50 years, which represents the period of the use rights.

Internally generated intangible assets are not recognized as assets.

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2.14 Impairment of assetsAssets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Assets that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.15 BorrowingsBorrowings are recognized initially normally at par value, net of transaction costs incurred. Borrowings are subse-quently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemp-tion value is recognized in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.

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

Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of owner ship, are classified as finance leases. Finance leases are capitalized at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

2.17 Trade payables and other payablesTrade payables and other payables are recognized at par value.

2.18 ProvisionsProvisions for contingent purchase consideration, restructuring costs, legal cases, warranties, and others are recognized when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination pay-ments. Provisions are not recognized for future operating losses.

Where there are a number of similar obligations, the likeli-hood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pretax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

2.19 Equity2.19.1 Ordinary sharesOrdinary registered and bearer shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.19.2 Treasury sharesWhere any Group company purchases the Company’s equity share capital (“treasury shares”), the consider-ation paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity.

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2.19.3 Goodwill offset in equityGoodwill represents the excess of the cost of an acquisition over the Group’s share of the newly valued net assets taken over. At the date of the acquisition, the acquired goodwill is offset with equity.

For purposes of the disclosure of the effects of a theo-retical capitalization, acquired goodwill is amortized over five years and carried at cost less accumulated amortiza-tion and impairment losses. Impairment losses on good-will are not reversed.

In case of a disposal, acquired goodwill offset with equity at an earlier date is considered at original cost to deter-mine the profit or loss recognized in the income state-ment.

2.20 Government grantsGovernment grants are recognized when there is reason-able assurance that the entity will comply with the condi-tions related to them and that the grants will be received. The benefit of a government loan at a below-market rate of interest is treated as a government grant. The benefit of the below-market rate of interest shall be measured as the difference between the initial carrying value of the loan and the proceeds received.

Grants related to income are recognized over the periods necessary to match them with the related costs that they are intended to compensate. The timing of such recognition in the income statement will depend on the fulfillment of any conditions or obligations attaching to the grant.

Government grants related to assets are presented in the balance sheet by deducting the grant in arriving at the carrying amount of the asset. The income statement will be affected by a reduced depreciation charge over the useful life of the related asset.

3 Critical accounting estimates and assumptionsEstimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

3.1 Provision for impairment of trade receivablesAt the end of 2012, trade receivables at par value decreased from CHF 82 702 000 in prior year to CHF 63 377 000, whereas receivable balances overdue since more than 30 days increased slightly from CHF 12 125 000 at the end of 2011 to CHF 12 891 000 at the end of 2012. The slightly increased collection risk is reflected in the in-creased provision for impairment of CHF 2 324 000 (2011: CHF 1 231 000). Even though certain receivables in China are long overdue, there is no objective evidence that the Group will not be able to collect the carrying amounts of trade receivables. The overall credit risk is reduced by the fact that more than 50% of the Group’s trade receivable balance is covered by insurance at the end of 2012. Man-agement believes that the Group will be able to recover the carrying amount of trade receivables as recorded at the end of 2012.

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4 Risk managementRisk management forms an integral part of the Group’s conduct of business and is therefore an important part of each managers and employees daily business responsi-bility. Risk management is carried out by the Executive Committee (EC) and the Business Units’ management, under the supervision of the Board of Directors.

A formal risk management review and subsequently an update of the risk profiles are done by the Business Units and the Chief Executive Officer, which present their find-ings to the EC. The EC ensures that appropriate mea-sures are taken to mitigate the risks. The Board of Direc-tors is informed in the Board of Directors meetings of the Group’s risk profile and the mitigating action plans. If the Group is exposed to major new risks, the Chief Executive Officer or his deputy will inform the chairman of the Board of Directors immediately after he became aware of the risk in line with the delegation of authority and the standing orders of the Board of Directors with the Chief Executive Officer.

4.1 Risk assessmentRisks are categorized and prioritized by the Business Units’ management for market specific risks as well as by the EC for global Group risks. The risks are catego-rized into the following three categories:(a) Strategy execution risks: risks which endanger the

going concern of the Company and / or the implemen-tation of the Group’s strategy.

(b) Operational risks: risks related to inadequate busi-ness processes, human resources, and systems. Such risks are normally of a short and medium term nature.

(c) Financial risks: although all risks can ultimately be reduced to a financial impact, this category includes short or long term financial risks, which are not or only in a limited way linked to operational processes or the strategy implementation.

The different risks are assessed and prioritized according to their financial impact and their likelihood.

4.2 Strategy execution and operational risksStrategy execution risks are captured and assessed annually during the strategy workshops. Operational risks are closely linked to the internal control system. They are reviewed and assessed as part of the opera-tional reviews of the Business Units as well as by the EC reviews.

4.3 Financial risk managementDue to the global activities of Gurit, the Group is exposed to certain financial risks such as currency risks, interest rate risks, credit risks as well as liquidity risks. The EC defines the principles for the financial risk manage-ment. Rules exist for the management of liquid and financial assets. The respective legal entities manage their financial risks according to the defined risk policies with the aim of minimizing the above mentioned risks. If appropriate, derivative financial instruments are used to hedge certain risk positions.

4.3.1 Currency riskThe Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, the Euro, the GB pound, the Canadian dollar and the Chinese yuan (Renminbi). Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

Management has set up a policy to require Group compa-nies to manage their foreign exchange risk against their functional currency. The Group companies are required to hedge significant foreign exchange risk exposures in accordance with this policy. To manage their foreign ex-change risk arising from future commercial transactions and recognized assets and liabilities, entities in the Group use natural hedges (e. g. purchasing raw materials in the currency, in which the related sales are invoiced, and the utilization of loans and deposits denominated in the foreign currency of future commercial transactions and recognized assets and liabilities) and forward contracts, transacted in co-operation with Group treasury.

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency trans-lation risk. Currency exposure arising from the transla-tion of the net assets of the Group’s foreign operations is not hedged.

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4.3.2 Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate be-cause of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relate primarily to the Group’s borrowings issued at variable interest rates. The potential effect on the Group’s profit arising from this risk is assessed to be not significant.

4.3.3 Credit riskCredit risk arises from cash and cash equivalents, derivative financial instruments, and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables, and committed transactions. The Group assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by Management. The utilization of credit limits is regularly monitored. Gurit also has Group-wide credit insuring instruments in place to cover a significant portion of the outstanding trade receivables.

4.3.4 Liquidity riskPrudent liquidity risk management includes maintaining sufficient cash and the availability of funding from an adequate amount of committed and uncommitted credit facilities. Due to the dynamic nature of the underlying businesses, Group treasury maintains flexibility in fund-ing by maintaining availability under committed credit lines. The Group monitors its risk to a shortage of funds by reviewing short-term cash forecasts on a monthly ba-sis and performs annual cash forecasts once a year.

At the reporting date, the Group analyzed liquidity as follows:

IN CHF 1000 2012 2011


Undrawn available committed credit lines 13 432 18 310

Total liquidity reserves and available credit lines 50 698 38 171

4.3.5 Capital risk managementThe 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.

In order to maintain or adjust the capital structure, the Group may adjust the amount of distribution payments to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital using the ratios and calcula-tions as shown below:

IN CHF 1000 2012 2011

Debt 31 263 52 462

EBITDA 36 564 44 807

Debt / EBITDA ratio 0.9 1.2

Assets 231 594 272 908

Equity 163 358 145 929

Equity ratio 70.5% 53.5%

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5 Net sales

IN CHF 1000 2012 (restated) 2011

Net sales by markets

Wind Energy 204 590 196 697

Tooling 24 936 43 216

Transportation 60 137 51 859

Industrial and Marine 57 553 49 764

Engineered Structures 3 804 3 183

Total net sales 351 020 344 719

Prior year net sales figures for Industrial and Marine and Engineered Structures have been restated to reflect the cur-rent year allocation of net sales between these two markets. Engineering services that were previously included in Industrial and Marine are now shown in Engineered Structures.

IN CHF 1000 2012 2011

Net sales by regions of destination

Europe 165 129 149 139

Asia 56 336 104 677

Americas 109 493 73 317

Rest of the world 20 062 17 586

Total net sales 351 020 344 719

6 Other operating income

IN CHF 1000 2012 2011

Gains from disposals of fixed assets 163 31

Reversal of impairment of other receivables – 2 045

Other income 1 439 1 075

Total other operating income 1 602 3 151

7 Personnel expense

IN CHF 1000 2012 2011

Salaries and wages 60 626 60 885

Pension expense 3 326 3 322

Social security expense 7 966 7 624

Other personnel expenses 4 883 4 120

Total personnel expense 76 801 75 951

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The pension expense is summarized as follows:

IN CHF 1000Nominal

valueRenounced

useBalance

sheetAccumula-

tionBalance

sheetResult from ECR within

personnel expense

Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 2012 Dec. 31, 2011 2012 2011

Employer contribution reserves (ECR)

Patronage funds / pension institutions – – – – – – –

Pension institutions – – – – – – –

Total – – – – – – –

IN CHF 1000Surplus/

deficitEconomical share

of the GroupChange to

previous yearContributions

accruedPension benefit expenses within personnel expense

Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2011 2012 2011

Economical benefit / obligation and pension expenses

Patronage funds / pension institutions – – – – – – –

Pension institutions without surplus / deficit – – – – – 3 326 3 322

Pension institutions with surplus – – – – – – –

Pension institutions with deficit – – – – – – –

Pension institutions without own assets – – – – – – –

Total – – – – – 3 326 3 322

8 Other operating expenses

IN CHF 1000 2012 2011

Utilities, maintenance, and rent expense 15 090 15 076

Non-recurring expense 3 699 894

Other operating expenses 25 194 27 180

Total other operating expenses 43 983 43 150

The non-recurring expense is summarized as follows:

IN CHF 1000 2012 2011

Losses from disposals of fixed assets 294 54

Losses from disposals of intangibles 36 146

Restructuring costs (note 20) 3 211 667

Other expenses 158 27

Total non-recurring expense 3 699 894

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9 Finance expense

IN CHF 1000 2012 2011

Interest expense 1 866 2 606

Exchange rate losses 1 089 1 923

Other finance expenses 397 184

Total finance expense 3 352 4 713

IN CHF 1000 2012

Exchange rate gains and losses per currency EUR GBP USD Other Total

Net gains per currency (note 10) 201 – 177 30 408

Net losses per currency – 126 – 11 – 577 – 375 – 1 089

Total 75 – 11 – 400 – 345 – 681

Whereof:

Gains per currency and balance sheet position 401 229 2 356 135 3 121

Losses per currency and balance sheet position – 326 – 240 – 2 756 – 480 – 3 802

IN CHF 1000 2011

Exchange rate gains and losses per currency EUR GBP USD Other Total

Net gains per currency (note 10) 566 78 1 090 589 2 323

Net losses per currency – 919 – 121 – 650 – 233 – 1 923

Total – 353 – 43 440 356 400

Whereof:

Gains per currency and balance sheet position 1 180 150 2 248 615 4 193

Losses per currency and balance sheet position – 1 533 – 193 – 1 808 – 259 – 3 793

10 Finance income

IN CHF 1000 2012 2011

Interest income 146 177

Exchange rate gains (note 9) 408 2 323

Other finance income – 4

Total finance income 554 2 504

11 Non-operating result

The non-operating gains of CHF 1 190 000 in 2012 and of CHF 2 903 000 in 2011 both relate to sales of operationally not needed land lots in Switzerland.

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12 Income tax (credit)/expense

IN CHF 1000 2012 2011

Deferred income tax (credit)/expense (note 24) – 10 797 632

Current income tax expense 8 172 5 865

Total income tax (credit)/expense – 2 625 6 497

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the average tax rate applicable to profits of the consolidated entities, as follows:

IN CHF 1000 2012 2011

Profit before tax 11 122 28 837

Tax expense at the average tax rate of 30.5% (2011: 21.4%) 3 396 6 182

Utilization of previously unrecognized tax losses – 501 – 290

Tax losses for which no deferred income tax asset was recognized 2 194 739

Effect of unrecognized deferred tax asset from temporary differences 3 392 –

Derecognition of previously recognized tax liability from temporary differences – 11 922 –

Recognition of previously unrecognized tax asset from temporary differences – – 209

Expenses not deductible for tax purposes 816 749

Adjustment in respect of prior years 319 – 275

Effect of tax concessions (research and development) – 368 – 309

Others 49 – 90

Income tax (credit)/expense recognized in profit or loss – 2 625 6 497

In 2012, the Group derecognized previously recognized tax liabilities from temporary differences in the amount of CHF 11 922 000. These temporary differences relate to investments in subsidiaries held by the Company, which in the past had been fully written down for statutory and for tax purposes. As the provisions on these investments were at the time accepted by the tax authorities as a reprocurement reserve (“Wiederbeschaffungsreserve”), it is very un-likely that the tax authorities would disallow these provisions in the future. A current tax liability would therefore only arise if the Company would sell these investments. With time and after the organizational restructuring of the Group as of February 1, 2013, and the resulting deeper integration of the various parts of the Group’s businesses, such po-tential sales of investments in subsidiaries have become unlikely. As a consequence, the related deferred tax liabilities were derecognized.

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14 Distribution to shareholders

The distribution to shareholders in 2012 out of reserves from capital contributions amounted to CHF 7 018 000 (CHF 3.00 per registered share and CHF 15.00 per bearer share). In 2011, a distribution out of reserves from capital contributions in the amount of CHF 7 004 000 (CHF 3.00 per registered share and CHF 15.00 per bearer share) was paid to the shareholders. A distribution out of reserves from capital contributions of CHF 3.00 per registered share and CHF 15.00 per bearer share, amounting to a total distribution of CHF 7 020 000, is to be proposed at the Annual General Meeting on April 9, 2013. These financial statements do not reflect this distribution payable.

15 Derivative financial instruments

IN CHF 1000 2012 2011

Assets Liabilities Assets Liabilities

Cash flow hedges, categorized as derivatives used for hedging – – 201 – – 122

Cash flow hedges, categorized as derivatives at fair value through profit and loss 38 – 78 206 – 507

Total derivative financial instruments 38 – 279 206 – 629

Whereof:

Current portion 38 – 186 206 – 629

Non-current portion – – 93 – –

All of the Group’s cash flow hedges relate to foreign exchange instruments. The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates until 2015.

13 Earnings per share

Basic and diluted earnings per share are calculated on the basis of the profit for the year and the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares. The calculation takes into account the different par values of the bearer and registered shares. The Company does not have any categories of dilutive potential ordinary shares. 2012 2011

Profit for the year (in CHF 1000): 13 747 22 340

Weighted average number of shares in issue during the year:

Bearer shares 419 789 419 074

Registered shares 239 797 239 800

Basic and also diluted earnings per share (in CHF):

Bearer shares (par value of CHF 50) 29.39 47.83

Registered shares (par value of CHF 10) 5.88 9.57

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16 Trade receivables

IN CHF 1000 2012 2011

Trade receivables 63 377 82 702

Less: provision for impairment – 2 324 – 1 231

Trade receivables – net 61 053 81 471

Aging of trade receivables

Not due 36 347 61 323

Overdue 1 – 15 days 11 975 5 893

Overdue 16 – 30 days 2 164 3 361

Overdue more than 30 days 12 891 12 125

Total trade receivables 63 377 82 702

Less: provision for impairment – 2 324 – 1 231

Total trade receivables – net 61 053 81 471

Movements on the provision for impairment

Balance at January 1 1 231 1 161

Provision for receivables impairment 1 582 289

Receivables written off as uncollectible – 341 – 73

Unused amounts reversed – 99 – 156

Exchange differences – 49 10

Balance at December 31 2 324 1 231

Trade receivables by currency

US dollar 17 862 31 086

GB pound 4 027 3 943

Euro 24 307 17 174

Chinese yuan (Renminbi) 14 204 28 229

Others 653 1 039

Total trade receivables – net 61 053 81 471

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17 Other receivables

IN CHF 1000 2012 2011

Other receivables 4 336 6 855

Loans 1 591 2 476

Total other receivables 5 927 9 331

Whereof:

Current portion 5 044 7 731

Non-current portion 883 1 600

18 Prepayments and accrued income

IN CHF 1000 2012 2011

Current income tax assets 1 168 414

Prepaid expenses 3 271 3 090

Accrued income 2 575 4 587

Total prepayments and accrued income 7 014 8 091

19 Inventories

IN CHF 1000 2012 2011

Raw materials 18 181 20 862

Work in progress 2 196 3 812

Semi-finished and finished goods 22 844 29 135

Total inventories 43 221 53 809

Less: inventory provision – 6 661 – 4 747

Total inventories – net 36 560 49 062

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20 Property, plant and equipment

IN CHF 1000

Plant and

equipment Real estate

Equipment under

construction

Other tangible

assets

Total property, plant and

equipment

Cost

Balance at January 1, 2011 109 145 43 818 15 072 633 168 668

Additions 3 111 1 512 4 916 234 9 773

Acquisition of subsidiaries (note 29) 2 300 1 339 54 78 3 771

Disposals – 2 068 – 2 066 – – 8 – 4 142

Reclassifications 11 659 5 136 – 17 390 595 –

Exchange differences 621 684 – 479 29 855

Balance at December 31, 2011 124 768 50 423 2 173 1 561 178 925

Additions 3 149 1 048 608 142 4 947

Disposals – 3 065 – 2 366 – – 41 – 5 472

Reclassifications 1 759 492 – 2 251 – –

Exchange differences – 817 – 480 16 – 20 – 1 301

Balance at December 31, 2012 125 794 49 117 546 1 642 177 099

Accumulated depreciation

Balance at January 1, 2011 59 439 11 780 – 337 71 556

Depreciation charge 9 914 1 163 – 171 11 248

Impairment charge 1 949 – – – 1 949

Impairment reversal – 197 – – – – 197

Disposals – 1 688 – 1 163 – – 8 – 2 859

Reclassifications – 482 – – 482 –

Exchange differences 49 26 – 14 89

Balance at December 31, 2011 68 984 11 806 – 996 81 786

Depreciation charge 9 681 1 290 – 219 11 190

Impairment charge 10 581 22 – – 10 603

Disposals – 2 507 – 361 – – 39 – 2 907

Reclassifications – 20 – – 20 –

Exchange differences – 568 – 43 – – 15 – 626

Balance at December 31, 2012 86 151 12 714 – 1 181 100 046

Net book values

Balance at January 1, 2011 49 706 32 038 15 072 296 97 112


Balance at December 31, 2012 39 643 36 403 546 461 77 053

The reduced outlook in the wind energy market, especially in the US and China, suffering from over-capacities and price pressure forced the Group to adapt its production capacity. The Group therefore mothballed its prepreg produc-tion in Canada and China and reduced its global work-force by some 150 employees. The impairment charge of CHF 10 603 000 in 2012 on property, plant and equipment relates mainly to the mothballed equipment in Canada and China and to a lesser extent to specific prepreg equipment at other production sites. The impairment charge of CHF 1 949 000 in 2011 related to the pregreg production in China. In connection with the reduced market outlook, the Group recorded restructuring costs of CHF 3 211 000 during 2012 within “other operating expenses” and inventory impairments of CHF 1 400 000 within “material expenses”.

At December 31, 2012, the net book value of leased property, plant and equipment amounted to zero (2011: CHF 111 000). After the sale of an operationally not needed land lot in Switzerland in 2012, there is no undeveloped land remaining within the category real estate (2011: CHF 2 000 000). Fire insurance values of property, plant and equipment amounted to CHF 218 000 000 (2011: CHF 202 000 000).

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21 Intangible assets

IN CHF 1000Patents and trademarks

Land-use rights

Software and other

intangibles

Total intangible

assets

Cost

Balance at January 1, 2011 3 573 3 027 5 946 12 546

Additions 248 – 87 335

Acquisition of subsidiaries (note 29) 1 – 31 32

Disposals – 784 – – 1 266 – 2 050

Exchange differences – 33 110 – 29 48


Additions 506 – 570 1 076

Disposals – 70 – – – 70

Exchange differences 22 – 63 – 13 – 54


Accumulated amortization

Balance at January 1, 2011 2 054 71 4 435 6 560

Amortization charge 258 59 444 761

Disposals – 638 – – 1 266 – 1 904

Exchange differences – 19 7 – 25 – 37

Balance at December 31, 2011 1 655 137 3 588 5 380

Amortization charge 292 59 453 804

Impairment charge – – 47 47

Disposals – 34 – – – 34

Exchange differences 5 – 4 – 1 –

Balance at December 31, 2012 1 918 192 4 087 6 197

Net book values




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22 Borrowings

IN CHF 1000 2012 2011

Current

Bank overdrafts 6 854 15 912

Bank loans 9 238 7 417

Other loans 285 1 827

Total current borrowings 16 377 25 156

Non-current

Bank loans 14 790 26 757

Other loans 96 549

Total non-current borrowings 14 886 27 306

Total borrowings 31 263 52 462

Bank loans mature until 2016 and bear average interest rates of 1.9% annually (2011: 2.9%). Other loans mature until 2014 and bear average interest rates of 0.2% (2011: 0.1%). Finance lease liabilities included in total borrowings amounted to CHF 16 000 at December 31, 2012 (2011: CHF 69 000).

There were no secured bank borrowings included in total borrowings at the end of 2012. In 2011, secured bank bor-rowings of CHF 499 000 were secured as follows:

IN CHF 1000 2012 2011

Cash and cash equivalents – 2 387

Receivables – 26 262

Inventories – 9 125

Property, plant and equipment – 23 589

Total net book value of pledged assets – 61 363

Borrowings become due as follows:

IN CHF 1000 2012 2011

3 months or less 12 487 21 590

4 – 12 months 3 890 3 566

1 – 5 years 14 886 27 306


The carrying amounts of the Group’s borrowings are denominated in the following currencies:

IN CHF 1000 2012 2011

Currency

Swiss franc 13 000 18 000

Canadian dollar 4 032 7 805

Chinese yuan (Renminbi) 383 8 566

US dollar 13 075 16 317

Others currencies 773 1 774


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23 Accrued liabilities and deferred income

IN CHF 1000 2012 2011

Current income tax liabilities 947 1 226

Advance payments from customers 945 982

Accruals 9 064 11 879

Total accrued liabilities and deferred income 10 956 14 087

24 Deferred income tax

IN CHF 1000 2012 2011

Deferred income tax assets 1 017 2 216

Deferred income tax (liabilities) – 901 – 12 862

Deferred income tax assets/(liabilities), net 116 – 10 646

The movement on the deferred income tax account is as follows:

IN CHF 1000 2012 2011

Balance at January 1 – 10 646 – 10 128

Deferred income tax credit/(expense) (note 12) 10 797 – 632

Acquisition of subsidiaries (note 29) – 127

Exchange differences – 35 – 13

Balance at December 31 116 – 10 646

Deferred income tax assets and liabilities arise from temporary differences between the tax bases and their carrying amounts in the Group’s financial statements in the following balance sheet items:

IN CHF 1000 2012 2011

Deferred

tax assetsDeferred

tax liabilitiesDeferred

tax assetsDeferred

tax liabilities

Trade receivables 138 40 299 31

Other receivables 490 – 754 –

Inventories 168 159 774 137

Property, plant and equipment 90 319 101 603

Intangible assets 507 82 592 2

Investments in subsidiaries – 779 – 12 701

Provisions 107 64 231 61

Other liabilities 62 3 264 126

Offset of deferred income tax assets and liabilities – 545 – 545 – 799 – 799

Total 1 017 901 2 216 12 862

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paGe 56

The Group did not recognize deferred income tax assets of CHF 6 929 000 (2011: CHF 8 463 000) in respect of unused tax losses amounting to CHF 29 170 000 (2011: CHF 38 332 000). These tax losses expire as shown in the table below:

IN CHF 1000 2012 2011

0 – 3 years 9 369 23 586

4 – 6 years 4 456 6 299

Over 6 years 15 345 8 447

Total unrecognized tax losses 29 170 38 332

25 Provisions

IN CHF 1000

Contingent purchase

considerationLegal cases Restructuring Other

Total provisions


Utilized during the year – 4 232 – 17 – 70 – 655 – 4 974

Additions 12 201 – – 433 12 634

Unused amounts reversed – 8 693 – 282 – 25 – 245 – 9 245

Revaluation – 799 – – – – 799

Exchange differences – – 7 – 1 58 50


Utilized during the year – 881 – – 1 010 – 363 – 2 254

Additions – – 3 211 625 3 836

Unused amounts reversed – 11 237 – – – 1 298 – 12 535

Revaluation 65 – – – 65

Exchange differences – – – 34 – 7 – 41


Whereof at December 31, 2011:

Current portion 892 83 31 947 1 953

Non-current portion 12 369 – – 1 492 13 861

Whereof at December 31, 2012:

Current portion – 74 1 339 678 2 091

Non-current portion 1 208 9 859 718 2 794

The provisions for contingent purchase consideration relate to the acquisition of subsidiaries during 2009 and 2011. A portion of the total purchase consideration is contingent on the acquired companies’ future performances. The amount of the provisions corresponds to Management’s best estimate of the future payment in 2014.

Other provisions comprise principally warranty and site restoration provisions.

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26 Equity

The issued share capital of the Company consists of 420 000 bearer shares (2011: 420 000 shares) with a par value of CHF 50.00 each and 240 000 registered shares (2011: 240 000 shares) with a par value of CHF 10.00 each. All issued shares are fully paid. The Company has no authorized or conditional capital.

At December 31, 2012, “treasury shares” consisted of 1 bearer share (2011: 571 shares) and 205 registered shares (2011: 200 shares).

The entitlement to dividend payments is based on the par value of the shares, while the voting power is defined by the number of shares.

The Company’s statutory or legal reserves that may not be distributed amounted to CHF 4 717 000 at December 31, 2012 (2011: CHF 5 179 000).

Goodwill from acquisitions Goodwill from acquisitions is fully offset against equity at the date of acquisition. The impact of the theoretical capi-talization and amortization of goodwill is disclosed below:

IN CHF 1000 CostAccumulated amortization

Theoretical net book value

Balance at January 1, 2011 29 230 – 5 907 23 323

Additions (note 29) 19 346 – 19 346

Subsequent purchase price adjustments – 9 419 – – 9 419

Amortization charge – – 6 680 – 6 680

Balance at December 31, 2011 39 157 – 12 587 26 570

Subsequent purchase price adjustments – 11 237 – – 11 237

Amortization charge – – 4 376 – 4 376

Balance at December 31, 2012 27 920 – 16 963 10 957

Subsequent purchase price adjustments relate to reductions of the contingent purchase consideration from acquisi-tions of subsidiaries during 2009 and 2011 (see note 25) and to other price adjustments that are not related to the acquired companies’ performances.

Impact on income statement:

IN CHF 1000 2012 2011

Profit for the year according to the consolidated income statement 13 747 22 340

Amortization of goodwill – 4 376 – 6 680

Theoretical profit for the year including amortization of goodwill 9 371 15 660

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Impact on balance sheet:

IN CHF 1000 2012 2011

Equity according to the balance sheet 163 358 145 929

Theoretical capitalization of goodwill (net book value) 10 957 26 570

Theoretical equity including net book value of goodwill 174 315 172 499

Equity according to balance sheet 163 358 145 929

Equity as % of total assets 70.5% 53.5%

Theoretical equity including net book value of goodwill 174 315 172 499

Theoretical equity including net book value of goodwill as % of total assets 71.9% 57.6%

27 Contingent liabilities

On January 26, 2010, customer Seaway Domus has summoned Gurit to appear before the District Court of and at Luxembourg, in order to intervene in the proceedings between Seaway Group S.a.r.l, Slovenia, and its customer Poncin Yachts, France. The proceedings between Seaway and Poncin is in relation to a yacht manufactured by Seaway for Poncin. Gurit supplied material for the manufacture of said yacht to Seaway. Based on the still limited information available to Gurit, the situation remains unclear. Management assumes that a potential claim would be partially cov-ered by the Group’s product and professional liability insurance. As of the date of this report it is still not possible to evaluate a potential damage to the Group. However, based on information from Gurit’s attorneys, the case is expected to be officially dismissed by the court in 2013. It therefore seems that Gurit’s liability risk has been reduced. No provi-sion has been recorded.

The Group has other contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from these contingent liabilities.

28 Commitments

Capital expenditures for the purchase of property, plant and equipment contracted for at the balance sheet date but not yet incurred amount to CHF 750 000 (2011: CHF 1 988 000).

The future aggregate minimum lease payments under non-cancelable operating leases are as follows:

IN CHF 1000 2012 2011

No later than 1 year 3 201 3 401

Later than 1 year, no later than 5 years 8 262 8 852

Later than 5 years 7 124 8 319

Total commitments 18 587 20 572

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29 Acquisition of subsidiaries

In March 2011, the Group acquired 100% ownership interests in Balseurop Ecuato Española, S.L. (see also note 2.2.1). The trans action is summarized as follows:

IN CHF 1000 2012 2011

Cash paid – 14 293

Direct costs related to the acquisitions – 363

Deferred and contingent consideration (note 25) – 12 201

Total purchase consideration – 26 857

Fair value of net assets acquired – – 7 511

Goodwill (note 26) – 19 346

The value of the assets and liabilities as per the date of the acquisition is as follows:

Cash and cash equivalents – 983

Trade and other receivables – 7 911

Inventories – 4 716

Deferred income tax assets (note 24) – 127

Property, plant and equipment (note 20) – 3 771

Intangible assets (note 21) – 32

Borrowings – – 7 839

Trade and other payables – – 2 190

Total net assets acquired – 7 511

The cash outflow on the acquisition is summarized as follows:

Purchase consideration settled in cash – 14 656

Less: cash and cash equivalents in subsidiaries acquired – – 983

Cash outflow on acquisition of subsidiaries acquired during the year – 13 673

Purchase consideration relating to subsidiaries acquired in 2009 and 2011 settled in cash (note 25) 881 4 232

Cash outflow on acquisition of subsidiaries 881 17 905

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30 Related party transactions

IN CHF 1000 2012 2011

Salaries and other short-term employee benefits 3 220 2 862

Post-employment benefits (including employers’ social charges) 501 419

Share-based compensation 339 328

Total Key Management compensation 4 060 3 609

Further details are provided in note 8 to the financial statements of Gurit Holding AG. Key Management includes members of the Board of Directors and members of the Executive Committee.

The members of the Board of Directors receive a fixed number of bearer shares of the Company as part of their total annual remuneration. These shares are subject to a lock-up period of three years. The last date when the Board of Directors passed a new resolution in respect of this plan was June 30, 2009. This date represents the grant date for the measurement of the fair value of these shares. For the year 2012, the Board of Directors received, in aggregate, 150 bearer shares, which are expensed at a fair value of CHF 494 per share (2011: 150 bearer shares at a fair value of CHF 494 per share).

The Chief Executive Officer receives a fixed number of 300 bearer shares of the Company per year as part of his total annual compensation. These shares are subject to a lock-up period of three years. The amended employment contract was signed on April 21, 2009. This date represents the grant date for all future periods as long as the employment contract is not modified. The fair value of the shares at the grant date is CHF 399 per share.

In accordance with a management share participation plan, selected categories of management receive a part of their variable compensation in form of bearer shares of the Company. This plan was approved by the Board of Directors on April 29, 2011, and entered into force on that date. In 2012, Key Management members received, in aggregate, 335 bearer shares (2011: 250 bearer shares). The fair value of the shares at the grant date was CHF 432 (2011: CHF 538) per share.

31 Subsequent events

No significant events occurred between the balance sheet date and March 8, 2013, the date when the consolidated financial statements were signed off by the Board of Directors for publication.

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32 Subsidiaries

Company ActivityRegistered

capitalGroup ownership and voting rights

2012 2011

Australia

Gurit (Australia) Pty Ltd., Mona Vale Dormant company AUD 55 000 100% 100%

Brazil

Gurit do Brasil Representações Ltda, Sorocaba**

Sales of composite materials BRL 100 000 100% 0%

Canada

Gurit (Canada) Inc., Magog Production and sales of composite materials CAD 34 626 898 100% 100%

China

Cheer Tech Investment, Hong Kong Holding company HKD 1 100% 100%

China Techno Foam, Qingdao Production and sales of composite materials CNY 62 465 324 100% 100%

Gurit (Tianjin), Tianjin Production and sales of composite materials CNY 128 856 923 100% 100%

Suzhou Red Maple, Taicang Production and sales of composite process equipment CNY 68 559 206 100% 100%

Ecuador

Balsablock CIA. LTDA., Guayaquil** Production of balsa wood core panels USD 1 000 000 99%* 0%

Delegacion Ecuatoriana de Balsaflex España, Del.E.B.ES, CIA, LTDA, Quevedo

Production of balsa wood core panels USD 1 500 000 99%* 99%*

Germany

Gurit (Kassel) GmbH, Kassel Production and sales of composite materials EUR 100 000 100% 100%

India

Gurit (India) Pvt. Ltd, Pune Sales of composite materials INR 3 269 080 100% 100%

Italy

Gurit (Italy) S.R.L., Dusino San Michele Sales of composite materials EUR 10 000 100% 100%

New Zealand

High Modulus International, Auckland Holding company NZD 400 002 100% 100%

Gurit (Asia Pacific) Ltd., Auckland Structural engineering, production and sales of composite materials NZD 400 001 100% 100%

Spain

Balseurop Ecuato Española, S.L., Fontcoberta

Sales of balsa wood core panels EUR 1 000 000 100% 100%

Gurit (Spain) S.A., Albacete Production and sales of composite materials EUR 1 552 774 100% 100%

Switzerland

Heberlein & Co. AG, Wattwil Real estate company CHF 1 000 000 100% 100%

Gurit (Ittigen) AG, Ittigen Dormant company CHF 6 500 000 100% 100%

Gurit Services AG, Zurich Management service company CHF 500 000 100% 100%

Gurit (Zullwil) AG, Zullwil Production and sales of composite materials CHF 7 500 000 100% 100%

United Kingdom

Gurit Automotive Ltd., Newport Production and sales of car body panels GBP 500 000 100% 100%

Gurit Material Systems Ltd., Newport Holding company GBP 52 011 300 100% 100%

Gurit (Newport) Ltd., Newport Dormant company GBP 50 000 100% 100%

Gurit (UK) Ltd., Newport Structural engineering, production and sales of composite materials GBP 142 571 100% 100%

High Modulus Europe, Hamble Dormant company GBP 400 100% 100%

SP Group Ltd., Newport Holding company GBP 3 333 324 100% 100%

SP Holdings, Newport Holding company GBP 1 394 554 100% 100%

USA

Gurit (USA) Inc., Bristol Structural engineering, production and sales of composite materials USD 3 000 100% 100%

* Minority interests are ignored due to immateriality** Company incorporated

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report of tHe StatutorY auDitor to tHe General MeetinG on tHe conSoliDateD financial StateMentS

As statutory auditor, we have audited the consolidated financial statements of Gurit Holding AG, which comprise the income statement, balance sheet, cash flow statement, statement of changes in equity, and notes (pages 32 to 61), for the year ended December 31, 2012.

Board of Directors’ ResponsibilityThe Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This responsibility includes designing, implement-ing 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 re-sponsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. 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 assess-ments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OpinionIn our opinion, the consolidated financial statements for the year ended December 31, 2012, give a true and fair view of the financial position, the results of operations, and the cash flows in accordance with Swiss GAAP FER and comply with Swiss law.

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

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

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

PricewaterhouseCoopers AG

Stefan Gerber Stefanie BöhmAudit expert Audit expertAuditor in charge

Zurich, March 8, 2013

33.indd 62 08.03.2013 16:37:25


financial report – Gurit HolDinG aG

paGe 63

incoMe StateMent

IN CHF 1000Year ended

December 31, 2012Year ended

December 31, 2011

Income from investments 7 902 6 421

Other income 864 1 054

Release of provision on loans to third parties – 2 045

Finance income 3 958 4 050 Total income 12 724 13 570

Provision on loans to group companies – 2 605 –

Finance expense – 1 013 – 1 491

Stewardship expense – 3 070 – 3 556

Administration expense – 1 102 – 1 136 Total expenses – 7 790 – 6 183


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balance SHeet

IN CHF 1000 NoteAt December 31,

2012 At December 31,

2011

Assets


Other receivables from third parties 435 1 161

Other receivables from Group companies 702 862

Prepayments and accrued income 49 –

Loans to third parties 678 683

Loans to Group companies 2 083 4 384

Current assets 5 724 8 827

Loans to third parties – 683

Loans to Group companies 28 365 43 291

Investments 2 104 460 115 643

Treasury shares 6 15 249

Non-current assets 132 840 159 866

Total assets 138 564 168 693

Liabilities and equity

Bank loans 3 000 –

Other payables to third parties 91 396

Other payables to Group companies 391 2 499

Loans from Group companies 4 700 13 153

Accruals and provisions 914 1 931

Current liabilities 9 096 17 979

Bank loans 10 000 18 000

Provisions 1 208 12 368

Non-current liabilities 11 208 30 368

Total liabilities 20 304 48 347

Share capital 4 23 400 23 400

General reserves: reserves from capital contributions 5 32 724 39 744

Reserves for treasury shares 6 37 499

Retained earnings 62 099 56 703

Total equity 118 260 120 346

Total liabilities and equity 138 564 168 693

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noteS to tHe financial StateMentS

1 Contingent liabilities

IN CHF 1000 2012 2011

Guarantees in favor of banks of subsidiaries, as security for bank loans of these subsidiaries 1 773 2 647

Guarantees in favor of banks of the Group, in respect to credit frame agreements of the Group 63 247 58 557

Other guarantees – 609

2 Investments

Company ActivityRegistered

capitalOwnership and

voting rights

2012 2011

Brazil

Gurit do Brasil Representações Ltda, Sorocaba* Sales of composite materials BRL 100 000 99% 0%

Canada

Gurit (Canada) Inc., Magog Production and sales of composite materials CAD 34 626 898 29% 29%

China

Cheer Tech Investment, Hong Kong Holding company HKD 1 100% 100%

China Techno Foam, Qingdao Production and sales of composite materials CNY 62 465 324 100% 100%

Gurit (Tianjin), Tianjin Production and sales of composite materials CNY 128 856 923 100% 100%

India

Gurit (India) Pvt. Ltd, Pune Sales of composite materials INR 3 269 080 100% 100%

Italy

Gurit (Italy) S.R.L., Dusino San Michele Sales of composite materials EUR 10 000 100% 100%

New Zealand

High Modulus International, Auckland Holding company NZD 400 002 100% 100%

Spain

Balseurop Ecuato Española, S.L., Fontcoberta

Sales of balsa wood core panels EUR 1 000 000 100% 100%

Switzerland

Heberlein & Co. AG, Wattwil Real estate company CHF 1 000 000 100% 100%

Gurit (Ittigen) AG, Ittigen Real estate company CHF 6 500 000 100% 100%

Gurit Services AG, Zurich Management service company CHF 500 000 100% 100%

Gurit (Zullwil) AG, Zullwil Production and sales of composite materials CHF 7 500 000 100% 100%

United Kingdom

Gurit Material Systems Ltd., Newport Holding company GBP 52 011 300 100% 100%

Gurit Automotive Ltd., Newport Production and sales of car body panels GBP 500 000 100% 100%

* Company incorporated during the year

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3 Significant shareholders

In percentage of all voting rights (all above 3%) 2012 2011

Huwa Finanz- und Beteiligungs AG, Heerbrugg (registered shares) 33.33% 33.33%

Whale Holding AG, Zug (Martin Bisang, Küsnacht) 5.30% 3.33%

Robert Heberlein, Zumikon 4.60% 4.12%

Sarasin Investmentfonds AG, Basel 3.11% 3.11%

BlackRock Inc., New York, USA 2.76% 3.28%

4 Share capital

The share capital at December 31 consisted of:

IN CHF 1000 2012 2011

240 000 registered shares at CHF 10 2 400 2 400

420 000 bearer shares at CHF 50 21 000 21 000

Total share capital 23 400 23 400

5 Reserves from capital contributions

As of January 1, 2011, the change from the nominal principle to the capital contribution principle has been executed in the Swiss tax system. In order to comply with the new tax regulations, the balance sheet of Gurit Holding AG contains since 2010 a separate account for “reserves from capital contributions”. Based on the final approval from the tax authorities of the total amount of reserves from capital contributions and based on the resolutions of the Annual General Meeting held on April 29, 2011, Gurit Holding AG transferred amounts from “free reserves” and from “retained earnings” to “reserves from capital contributions”.

IN CHF 1000 2012 2011

Balance at January 1 39 744 11 700

Transfers from free reserves – 32 845

Transfers from retained earnings – 2 219

Distribution of reserves from capital contributions – 7 020 – 7 020

Balance at December 31 32 724 39 744

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6 Treasury shares

The reserves for treasury shares were valued using the weighted average purchase price method. At December 31, 2012, the reserves for treasury shares amounted to CHF 37 000 (2011: CHF 499 000) and thereby covered the trea-sury shares recognized as assets of CHF 15 000 (2011: CHF 249 000).

In number of shares 2012 2011

Registered shares:

Balance at January 1 200 200

Additions (at CHF 98.00 each) 5 –

Disposals – –

Balance at December 31 205 200

Bearer shares:

Balance at January 1 571 1 496

Additions (at CHF 499.80 each) 440 –

Disposals (used for share-based compensation of Board of Directors) – 150 – 150

Disposals (used for share-based compensation of employees) – 860 – 775

Balance at December 31 1 571

7 Hidden reserves

IN CHF 1000 2012 2011

Release of hidden reserves 8 436 –

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8 Management compensation

The following table shows the compensation of Key Management personnel in line with § 663b bis and § 663c of the Swiss Code of Obligations. Variable compensation contains the accrued bonuses for the year 2012, which will be paid out in 2013. Other compensation comprises pension contributions and social benefits.

IN CHF 1000 2012

Fixed cash

compensation

Fixed share-based

compensation

Variable cash

compensation

Variable share-based

compensationOther

compensationTotal

compensation

Board of Directors

Peter Leupp (member, Chairman since April 23, 2012) 193 26 – – 1 220

Dr Paul Hälg (Chairman until April 23, 2012) 84 – – – 13 97

Robert Heberlein (member) 80 12 – – 9 101

Nick Huber (member) 80 12 – – 14 106

Urs Kaufmann (member) 80 12 – – 14 106

Peter Pauli (member) 53 12 – – 14 79

Total Board of Directors 570 74 – – 65 709

Executive Committee

Rudolf Hadorn (CEO) 521 120 229 – 135 1 005

Other members 1 617 – 283 145 301 2 346

Total Executive Committee 2 138 120 512 145 436 3 351

Total Management compensation 2 708 194 512 145 501 4 060

IN CHF 1000 2011

Fixed cash

compensation

Fixed share-based

compensation

Variable cash

compensation

Variable share-based

compensationOther

compensationTotal

compensation

Board of Directors

Dr Paul Hälg (Chairman) 250 25 – – 39 314

Robert Heberlein (member) 80 12 – – 9 101

Nick Huber (member) 80 12 – – 14 106

Urs Kaufmann (member) 80 12 – – 14 106

Peter Leupp (member) 80 12 – – 14 106

Total Board of Directors 570 73 – – 90 733

Executive Committee

Rudolf Hadorn (CEO) 521 120 256 – 106 1 003

Other members 1 310 – 205 135 223 1 873

Total Executive Committee 1 831 120 461 135 329 2 876

Total Management compensation 2 401 193 461 135 419 3 609

No other compensations of former members of the Board of Directors or the Executive Committee took place in 2012 and in 2011. There were no transactions with current or former members of the Board of Directors or the Executive Committee (or their close family members) at conditions, which are not at arm’s length. No loans or advances were granted to members of the Board of Directors or the Executive Committee (or their close family members).

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9 Management participation

In number of shares 2012

Bearer shares

Registered shares

Board of Directors

Peter Leupp (Chairman) 150 –

Robert Heberlein (member) 10 740 19 545

Nick Huber (member) 230 –

Urs Kaufmann (member) 235 –

Peter Pauli (member) 250 –

Total Board of Directors 11 605 19 545

Executive Committee

Rudolf Hadorn (CEO) 1 301 –

Markus Knüsli Amacker (member) 100 –

Rudolf Gerber (member) 100 –

Graham Harvey (member) 150 –

Paul Goddard (member) 65 –

Kees Reijnen (member) 450 –

Damian Bannister (member) 100 –

Total Executive Committee 2 266 –

Total Management participation 13 871 19 545

In number of shares 2011

Bearer shares

Registered shares

Board of Directors

Dr Paul Hälg (Chairman) 500 –

Robert Heberlein (member) 10 215 19 545

Nick Huber (member) 425 –

Urs Kaufmann (member) 210 –

Peter Leupp (member) 125 –

Total Board of Directors 11 475 19 545

Executive Committee

Rudolf Hadorn (CEO) 1 001 –

Markus Knüsli Amacker (member) 50 –

Rudolf Gerber (member) 150 –

Graham Harvey (member) 124 –

Kees Reijnen (member) 400 –

Damian Bannister (member) 50 –

Total Executive Committee 1 775 –

Total Management participation 13 250 19 545

10 Risk Management

Gurit Holding AG is fully integrated into the Group-wide risk assessment process which is described in note 4.1 to the consolidated financial statements.

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paGe 70

propoSal of tHe boarD of DirectorS for tHe appropriation of available earninGS anD reServeS froM capital contributionS

Appropriation of available earnings as proposed by the Board of Directors

IN CHF 1000 2012 2011

Retained earnings carried forward from previous year 56 703 50 785

Net profit for the year 4 934 7 387

Transfer to reserves from capital contributions – – 2 219

Release of reserves for treasury shares 462 750

Retained earnings available to the Annual General Meeting 62 099 56 703

Transfer to general reserves – 4 680 –

To be carried forward 57 419 56 703

Appropriation of reserves from capital contributions

IN CHF 1000 2012 2011

Reserves from capital contributions carried forward from previous year 32 724 39 744

Distribution to shareholders from reserves from capital contributions – 7 020 – 7 020

To be carried forward 25 704 32 724

If this proposal is approved by the Annual General Meeting on April 9, 2013, the distributions will be made as follows:

CHF 3.00 per registered shareCHF 15.00 per bearer share

The distribution is payable on submission of voucher number 32.

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paGe 71

report of tHe StatutorY auDitor to tHe General MeetinG on tHe financial StateMentS

As statutory auditor, we have audited the financial statements of Gurit Holding AG, which comprise the income statement, balance sheet, and notes (pages 63 to 69), for the year ended December 31, 2012.

Board of Directors’ ResponsibilityThe Board of Directors is responsible for the preparation of the financial statements in accordance with the require-ments of Swiss law and the Company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from mate-rial 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 ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. 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 state-ments. 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 state-ments. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements for the year ended December 31, 2012, comply with Swiss law and the Company’s articles of incorporation. Report on other legal requirementsWe confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and indepen-dence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

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

PricewaterhouseCoopers AG

Stefan Gerber Stefanie BöhmAudit expert Audit expertAuditor in charge

Zurich, March 8, 2013

33.indd 71 08.03.2013 16:37:26

Registered office

Gurit Holding AGEbnater Strasse 79CH-9630 WattwilSwitzerland

Gurit Group Management

Gurit Services AGValeska Gogrewe; Executive AssistantSchaffhauserstrasse 339CH-8050 Zurich OerlikonSwitzerland

Phone +41 (0)44 316 15 50Telefax +41 (0)44 316 15 69

www.gurit.comCorporate e-mail: [email protected]


MoSt iMportant aDDreSSeS

paGe 72

Gurit aDDreSSeS

33.indd 72 08.03.2013 16:37:27

imprint

gurit holding Ag, Wattwil, switzerlandc/o gurit services Ag, schaffhauserstrasse 339, ch-8050 Zürich Bernhard Schweizer, Group Communications / Investor Relations

pictures:Photo archives of Gurit companies; (10) iStock photo; (14) Aston Martin Lagonda; (18) arripay, published on Flickr under Creative Commons license by attribution / non commercial; (6, 32, 35, 36) Christian Höfliger

printing:Neidhart + Schön AG, Zurich

This Annual Report contains forward-looking statements that include risk and uncertainties regarding the future global developments that cannot be influenced by the Company.

gurit – delivering the future of composite solutions. We specialize in advanced

composite materials, production tools, components, and engineering services

for demanding industries such as wind energy, aerospace, rail, automotive,

marine, civil engineering, architecture, ocean energy, agriculture and new appli-

cations where materials such as metal, wood or concrete are being replaced by

engineered, durable and lightweight composite solutions. Our complete materi-

als offering comprises glass, carbon, and aramid fibre prepregs, structural foam

and balsa wood core materials, gel coats, adhesives, resins, and consumables.

Our components business includes large-scale tooling moulds, rapid prototyping

and the manufacture of certain finished parts. Our engineering services combine

an unparalleled know-how in materials manufacturing, composite processing, and

structural engineering with a high responsiveness based on our global presence.

Gurit Holding AGEbnater Strasse 79CH-9630 Wattwilwww.gurit.com G

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delivering the future of composite solutions

Annual Report 2012

Gurit Annual Report 2012

Economy & Finance

Transcript of Gurit Annual Report 2012