Annual Report 2016 - Ascom€¦ · architecture capabilities to devise integration and mobilization...

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Annual Report 2016

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Ascom is a global solutions provider focused on healthcare ICT and mobile workflow solutions. The vision of Ascom is to close digital information gaps allowing for the best possible decisions – anytime and anywhere. Ascom’s mission is to provide mission-critical, real-time solutions for highly mobile, ad hoc, and time-sensitive environments. Ascom uses its unique products and solutions and software architecture capabilities to devise integration and mobilization solutions to improve workflows for healthcare, industry and retail sectors.


Performance in CHF

25.0

20.0

15.0

10.0

5.0

Dec 12 Dec 13 Dec 14 Dec 15 Dec 16

Shareholder return

Share information

2016 2015

Share price at 31.12. in CHF 16.00 15.90

Market capitalization at 31.12. in CHFm 576.00 572.40

Nominal value per share in CHF 0.50 0.50

Shareholder return 2012 to 2016 1

Ascom SPI

2016 1 2015 2014 2013 2012

Dividend (CHF per share) 0.80 0.45 0.45 0.40 0.35

Average annual share price (CHF) 16.7 16.8 15.3 12.2 8.1

Dividend yield (%) 4.8% 2.7% 2.9% 3.3% 4.3%

+118% Ascom

+68% SPI

CH

F (re

bas

ed

to A

sco

m)

1 Share price performance plus dividend payments.

1 Proposal to the Annual General Meeting.


Ascom generates more than 63% of its global revenues from healthcare.

The installed base is impressive:■ Over 12,000 global hospital instal-

lations of Unite communication software

■ Over 6,900 global healthcare instal-lations of Ascom mobility including Ascom Myco

■ Over 100,000 global healthcare installations of Nurse Call Systems

■ Over 100 installations of Digistat suite of operating room, intensive care unit and medical device connectivity solutions

■ Over 80 healthcare-related apps for the smartphone Ascom Myco

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1ASCOM ANNUAL REPORT 2016 CONTENTS

Annual Report 2016

2 LettertoShareholders 4 PerformanceReport 6 BusinessReport10 Sustainability

Corporate Governance12 Corporatestructureandshareholders15 Capitalstructure 16 BoardofDirectors22 ExecutiveBoard24 Shareholders’participationrights25 Changeofcontrolanddefensivemeasures25 Auditors26 Informationpolicy

Remuneration Report27 AscomRemunerationPolicy33 Remunerationinfiscalyear201638 Shareownership39 Long-termincentiveplans

Financial statements 201643 Tableofcontents44 AscomGroup81 AscomHoldingAG

92 Worldwidecontacts93 Datesandcontacts

Declarationofforward-lookingstatements Publishingdetails

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2 ASCOM ANNUAL REPORT 2016 LETTER TO SHAREHOLDERS

Dear Shareholders2016 was a year of major changes in Ascom where important steps have been taken:

■■ Portfolio decision to convert Ascom from a divisional set-up to an integrated organization

■■ Sale of the Network Testing Division ■■ Strategic business focus on healthcare ICT and mobile workflow solutions

■■ Appointment of a new CEO with an excellent knowledge of the healthcare ICT industry and ex-pertise in software and solutions sales and delivery

■■ Increase of investments into cutting-edge software development teams, driving growth and gross margin in the coming years

■■ Dedicated focus on organic growth, no major acqui-sitions planned

■■ Asset light operation with substantial recurring revenues and solid balance sheet with a net cash position

Solid result for Wireless Solutions■■ Wireless Solutions achieved net revenue of CHF 300.8 million, with the healthcare businessgrowingbyabout5%.Therevenuelevelwasinlinewiththepreviousyeardespitefundamentalchangesin theorganizationandprocessesduetothetrans-formationofAscomtoaOneCompanybusiness.

■■ Supportedbyastrongersecondhalf-year,WirelessSolutionsachievedanEBITDAmarginof 14.0% (ad-justedfortheOneCompanyrestructuringcosts)de-spite higher R&D costs. Thanks to a higher grossmargin, the profitability in the second half-year in-creasedtoanEBITDAmarginof 17.7%(adjustedfortheOneCompanyrestructuringcosts).Giventhesea-sonality of the business, Ascom traditionally has astrongersecondhalf-year.

Divestment of Network Testing Division ■■ The former Network Testing Division continued tosufferfromtheverydifficultmarketenvironmentfortelecom operators with consolidating markets andsignificantpricepressureoverthelastyears.Inthefirst ninemonths, the formerNetwork TestingDivi-sionpostednetrevenueofCHF53.8millionwithanoperativelossofCHF20.0milliononEBITlevel.

■■ After20monthsofintensivesearchandnegotiations,wehavefoundagoodindustrialsolutionforallstake-holders and the right owner to develop and scale thisbusinessfurther.ThedivestmentoftheNetworkTestingDivisionwasclosedon30September2016.

■■ As announced in the media release of 22 August2016,thedivestmentoftheNetworkTestingDivisionledtoanextraordinarylossofCHF145.1million,re-sulting principally from the non-cash recycling ofgoodwill previously offset against shareholders’ equityaccordingtoSwissGAAPFER.

Implementation of the new OneCompany organization DuringQ4 2016, Ascom converted from a divisionalandregionalset-uptoaOneCompanyfunctionalorga-nization with one business, one mission and one culture.Goingforward,Ascomconcentratesitsinvest-mentsonhealthcareICTproductsandsolutions–withhealthcarebeing themost complex and challengingmobile workflow environment. Thus, innovation forhealthcarewillsupportsalesinmanyotherindustriestoo.Thefullyearresult2016wasimpactedbynon-re-curringcostsofCHF10.6millionfortheOneCompanyprogramwiththetargettolowerthefuturecostbase.

Letter to Share holders

JuhaniAnttila,Chairman(l.),HolgerCordes,CEO(r.)


3ASCOM ANNUAL REPORT 2016 LETTER TO SHAREHOLDERS

Dedicated focus on healthcareWirelessSolutionsprovedtobeastablebusinesswithgoodprofitabilityoverthefivelastyearswithEBITDAmarginsbetween14and17.5%.However, thegrowthplansdidnotfullymaterializeinwhichtheappreciationoftheSwissfranchadanegativeimpact.

In2015,theBoarddecidedtoacceleratetheWirelessSolutionsbusinessonhealthcareasthemostpromis-ingmarket.Healthcareaccountedfor63%ofthetotalrevenueofWirelessSolutionsin2016andAscom’sin-stalledbaseisimpressive:

■■ Over12,000globalhospitalinstallationsofUnite,ourintelligentcommunicationsoftware

■■ Over6,900globalhealthcareinstallationsofAscommobilityincludingAscomMyco

■■ Over100,000globalhealthcareinstallationsofnursecallsystemscovering1,000,000hospitalbeds

■■ Over100installationsofourDigistatsuiteofoperat-ing room, intensive care unit and medical device connectivitysolutions

■■ Over80healthcarerelatedappsforthesmartphoneAscomMyco

Theacceleratingdigitalizationof healthcare starts todriverapidgrowth.Thedigitalizationofhealthcarehassufferedfromthechallengetoreachthepointofcarewithitsmissioncritical,mobileandadhocworkflows.Ascomisuniquelypositionedtoprovidethisfinalmiss-inglinkforhealthcaretostartembracingthefullpoten-tialof information technologyandknowledgedrivenworkflows.Globalhealthcare ICTspend isapproach-ingUSD150billionperyear,growingatover7%.TheBoardofDirectorsandtheManagementareconvincedthat the healthcare market offers tangible growth opportunitiesforAscom,whocanleverageanimpres-siveinstalledbaseinthisexpandingmarket.

Dividend of CHF 0.80 per shareTheBoardofDirectorsproposestotheshareholdersadividendpaymentofCHF0.80pershare.Afterthedi-vestmentoftheNetworkTestingDivisionandthestra-tegic decision to focus on healthcare ICT as a one-businesscompany,theBoarddecidedtopayoutthemajorpartoftheproceedsfromthedivestmenttotheshareholders.Thanksto thesolidbalancesheetandfinancingoftheGroup,thereisnoimpactontheexecu-tionofthecommunicatedgrowthstrategy.

Over the last five years (2012–2016), the share-holderreturn(sharepriceperformanceplusdividendpayments)relatedtotheAscomshareamountsto118%(SwissPerformanceIndex,SPI:68%).

2016wasayearofmanychangesforAscom.Onbehalfof the entire Board of Directors and the ExecutiveBoard,wewouldliketothankourcustomersandbusi-

nesspartnersfortheconfidenceinourproducts,solu-tionsandservices.TheBoardofDirectorsalsothankstheformerCEOFritzMumenthaler,wholeftendofMay2016, for his many years of successful service for Ascom.Specialthanksgotoouremployeesworldwidefor their exemplary commitment and dedication to Ascom.

JuhaniAnttila HolgerCordesChairman CEO

A word of thanks from the ChairmanAsthecurrentChairmanoftheBoardofDirectors, Iwouldliketotakethisshareholderletterasanop-portunitytoexpressmysincerestthankstoyou,our valued shareholders. It was an honor for me toserveasChairmanofAscom’sBoardofDirectorsforthelastfifteenyears. I thankyouforthetrustandconfidenceyouhavegivenme.Youhavestronglysupportedus,theentireBoardofDirectorsandtheExecutiveBoard.

Ascomaimsalwaystomeetthehighdemandsin regards to corporategovernanceand thecom-panyputsalleffortsinimprovingthetransparencyfor its stakeholders. Thanks to all these efforts, aprofessionalsurveyamonglistedcompaniesinSwit-zerlandawardedAscomtop-notchqualityincorpo-rategovernance.IamproudthatAscomwasrankednumber2(from171listedSwisscompanies)accord-ing to the 2016 Corporate Governance Study ofzRating.

TheAscomGroupwasinaverycriticalsituationwhenIjoinedtheBoardfifteenyearsago.AscomasaSwissfocusedtelecomsupplierwithaverybroadportfoliowas severely hit by the liberalization andglobalizationoftheworldwidetelecommarket.IamverypleasedthatAscomhastransformeditselfcom-pletelyandstayedasanindependentcompanywithverypromisinggrowthopportunitiesinthenewdigi-talworldastheleaderofhealthcareICTsolutions.

JuhaniAnttila

TheBoardofDirectorsthankstheleavingmembersof theBoard,JuhaniAnttila,DrJ.T.Bergqvist,andUrsLeinhäuserfortheirveryvaluablecontributiontoAscom.JuhaniAnttilaservedasChairmanofAscomforfifteenyearsandsupportedthesuccessfultrans-formationofAscomwithhisclear-sightedstrategicthinkingandhisstrongpersonaldedication.


4 ASCOM ANNUAL REPORT 2016 ASCOM PERFORMANCE REPORT

Wireless Solutions once again proved to be a stable business with good profitability.

In 2016, Wireless Solutions made further prog-ress in its transformation into a leading provider of healthcare ICT solutions. As expected, the second half of 2016 developed more favorably than the first six months. Wireless Solutions closed the financial year 2016 with solid results, achieving overall net rev-enue of CHF 300.8 million, with the healthcare busi-nesses growing by about 5%.

Adjusted for the restructuring costs of CHF 10.4 million in connection with the OneCompany program, Wireless Solutions achieved in financial year 2016 an EBITDA margin of 14.0% (2015: 15.0%) with increased R&D costs. Supported by a higher gross margin, the profitability increased in the second half-year to an EBITDA margin of about 17.7% (adjusted for the One-Company restructuring costs) compared to 10.0% for the first half-year 2016 and to 15.5% for the second half-year 2015.

The increase in order backlog to CHF 121.8 mil-lion (2015: CHF 117.5 million) forms a solid basis for the sales performance in financial year 2017.

Healthcare segment grew by 5%2016wasayearof transformation forWirelessSolu-tions.Ontheonehand,furtherprogresswasmadeinthetransformationintoaleadingproviderofhealthcareICTandmobileworkflowsolutions.Ontheotherhand,theformerdivisionalorganizationwitharegionalset-upwasconvertedtoaOneCompanyorganizationwithaglobalplatformapproachinR&D,productmanage-mentandprocessstandardization.

Wireless Solutions further expanded its strongposition in healthcare ICT. The healthcare business,whichaccounts forabout63%ofWirelessSolutions’totalnetrevenue,grewbyabout5%in2016.However,decisioncyclesinthehealthcaremarketarebecoming

longerandprojectsaregettingmorecomplexandbig-gerthaninthepast.In2016,WirelessSolutionsgener-atedtotalnetrevenueofCHF300.8million,whichwasinlinewiththepreviousyear(CHF304.2million).

The development in growth markets such asSouth-east Asia, Middle East and Australia was verypositivewithoveralldouble-digitgrowth.GoodgrowthwasalsoachievedintheNordiccountries, theDACHregionandSouthernEurope(France/Italy)whilethede-velopmentintheBeneluxwasbelowexpectations.TheUKbusinessstillsufferedfromachallengingenviron-mentintheretailindustry,butmadegoodprogressinthehealthcareindustry.RevenuedevelopmentinNorthAmerica was weaker than expected due to a partial restructuringofthesalesorganizationandsomechan-neldistractions,whichwerelargelyfixedbytheendoftheyear.AlthoughsaleswithOEMpartnersimprovedinthesecondhalf-year,theydidnotmeetthelevelofthepreviousyear.TheSolutionLifeCycleManagementbusinesscontinuedtogrowin2016.

Ascomconcludedin2016theacquisitionandin-tegrationoftheItalianmedicalsoftwarecompanyUMS.Withthisimportantacquisition,Ascomgainedaccesstonewsoftwareandmedicaldeviceintegrationcapa-bilities.Moreover,AscomcouldestablishageographicfootprintinItaly.

IncomingordersamountedtoCHF303.3million(2015:CHF311.8million).Inthehealthcaresegment,WirelessSolutionswasabletosecureimportantwinssuchas:

■■ Humber River Hospital, Toronto (Canada): The newacute care facility isNorthAmerica’s first fully digitalfacilityandselectedworkflow-enhancingcommunica-tionsolutionsfromAscomWirelessSolutionsincludingmorethan600AscomMycosmartphonesforhealth-care,combinedwiththeAscomUnitesoftwareplatform

■■ OneofthelargestUShospitalsystemsordered1,000AscomMycounitswithupsellandgrowthpotentialforadditionalsolutions,whileanotherlargeUSregionalhealthcarenetworkordered500AscomMycounits

■■ HospitalCenterDNV-Godstrup(Denmark):intelligentpatientcallsolution“AscomWardAgent”

■■ SunshineCoastUniversityHospital (Australia):highavailabilityenterprisegrademessagesysteminclud-ingAscomMycoandi62unitsaswellasAscomUnite

■■ Major hospital group in Singapore: nurse call andworkflowsolution

■■ MedischSpectrumTwente,Enschede(Netherlands):UnitecommunicationplatformandAscomMycounits

■■ CHIELVR (major healthcare provider in Normandy,France): Integrated workflow intelligence solutionbasedonIP-DECT

Business resultsWireless Solutions: solid result with a higher profitability in the second half-year


5ASCOM ANNUAL REPORT 2016 ASCOM PERFORMANCE REPORT

The increase in order backlog to CHF 121.8 million (2015: CHF 117.5 million) and a book-to-bill ratio of 1.01 form a solid basis for the sales performance in financial year 2017.

Stronger profitability in the second half-yearThanks to a stronger second half-year, Ascom Wireless Solutions improved the gross margin for the full-year 2016 to 50.9% (2015: 50.5%).

The EBITDA was impacted by non-recurring costs for the OneCompany program of CHF 10.4 million. These measures initiated will lower the annual cost base by about CHF 10 million in 2017. Adjusted for the restructuring costs of CHF 10.4 million in connection with the OneCompany program, Wireless Solutions achieved in financial year 2016 an EBITDA margin of 14.0% (2015: 15.0%). Supported by a higher gross mar-gin, the profitability increased in the second half-year to an EBITDA margin of about 17.7% (adjusted for the OneCompany restructuring costs) compared to 10.0% for the first half-year 2016 and to 15.5% for the second half-year 2015.

Increased investments into R&DWireless Solutions invested about 9% of its revenue in R&D projects, whereby significant investments have been made into Ascom Myco updates, new generation of DECT handsets as well as next-generation nurse call systems and enhancements to the Unite platform. Overall, the expenses for R&D grew about 12% com-pared to 2015. Ascom Myco is performing well and an ecosystem with about 40 app developers has been built up. In addition, Ascom is developing own apps for Ascom Myco. Moreover, a new generation of DECT handsets has been launched by end of 2016.

Wireless Solutions Revenue by region

Wireless Solutions Revenue by segment

Europe 76% Switzerland 8%Belgium 3%France 8%Germany 13%Netherlands 17%Scandinavia 18%United Kingdom 5%Rest of Europe 4%

Middle East and Africa 1%

Asia Pacific 4%

Americas 19%

Others 9%

OEM 9%

Hospitals (healthcare) 46%

Secure establishments 5%

Hotel & Retail 5%

Elderly care (healthcare) 17%

Industry 9%

Network Testing generated significant lossThe former Network Testing Division continued to suffer from the very difficult market environment for telecom operators with consolidating markets and significant price pressure over the last years. In the first nine month of 2016, the former Network Testing Division (which was divested as of 30 September 2016) posted net revenue of CHF 53.8 million (full-year 2015: CHF 107.0 million) and an operating loss of CHF 20.0 million on EBIT level (full-year 2015: CHF –10.9 million).

As announced in the media release of 22 Au-gust 2016, the divestment of the Network Testing Division led to an extraordinary loss of CHF 145.1 million, resulting principally from the non-cash recy-cling of goodwill previously offset against share-holders’ equity according to Swiss GAAP FER.


6 ASCOM ANNUAL REPORT 2016 ASCOM BUSINESS REPORT

2000toover71yearsin2016.Althoughscientificprog-ressimprovesthepotentialqualityofcare,thecostoftherapiescontinuestorisesteeply.Theglobalaveragehealthcarespendpercapitahas risen from justoverUSD700in2006toclosetoUSD1,200currently.How-ever,thelowandflatglobalGDPgrowthoverthepastyearsresultsinaffordabilitygapsofincreaseddemandforcare.Overall,theshareofhealthcarerelatedGDPisattheedge–therearelackoffundstoclosethegapbetweenthedemandandaffordablesupplyofhealth-care.

Inshort,theimpactofthesemacrotrendsareclear:■■ Increaseddemandsforhealthcareprovision■■ Constraintsonthesupplyofhealthcare■■ Increasedcostsforthedeliveryofhealthcare■■ Lessfundstocovertheseincreasedcosts

Inordertomeetthesechallenges,Ascombelievesthatakeysolutionisthedigitalizationofhealthcare.Digita-lizationallowshealthcareproviderstooptimizework-flowsandcreateasustainablecarecoststructureandatthesametimeimprovingpatientoutcomes.

Digitalization needs DigitalizationForhospitals tobecomedigital, theyneed integration,interoperability,harmonizationandnormalizationoftheirpatientworkflows,processesandhealthcareITsystems.

Aprerequisitefordigitalizationistheintegrationofthehospital’sITandcommunicationsystems.Seam-less integrationwith full interoperability isabsolutelyvital.Meaningfulandintelligentdatamustbecapturedat the hospital bed, analysed and transferred to therightpersonorsystemattherighttime.

Thisdigitalizationofhealthcarecontinuestogrowrapidly. Global healthcare ICT spend is approachingUSD150billionofspendperyear,growingatover7%.Within this, healthcare software spendgrows at 13%and is approaching a USD 50 billion market. Geo-graphically,NorthAmericaistheworld’slargestmarketatoverUSD70billionand9%growth.WesternEuropeis half of North America’s size and growth but stillservesasoneoftheworld’skeydrivers.Fromaper-centageperspective,theAsianandMiddleEastgeog-raphiesarethefastestgrowingmarketsat10and11%respectively. Ascom believes that our sector in thismarket is in the rangeofUSD3,3billion,growing toalmostUSD4,7billionbytheyear2020.

Ascom helps digitalize healthcareWeclosethedigitalinformationgapsbetweenthepa-tients’hospitalbed,nurses,doctors,cliniciansandhos-pital information systems. We capture patients’ vitalsigns, valuable data from themedical devices in pa-tients’ rooms, intensive care units (ICU), operatingrooms(OR)aswellaspatients’realtimeneedsandre-

Ascom’s installed base of healthcare customers and partners is large and growing:

■■ Over 12,000 global hospital installations of Unite, our intelligent communication software that intelli-gently manages, analyzes and delivers over 800 million critical alerts and events per year

■■ Over 6,600 global healthcare installations of Ascom mobility including Ascom Myco our ground break-ing healthcare mobile device platform

■■ Over 100,000 global healthcare installations of nurse call systems covering 1,000,000 hospital beds

■■ Over 100 installations of our Digistat suite of oper-ating room, intensive care unit and medical device connectivity solutions

■■ Over 80 healthcare related apps and technology partners around the world

Enabledbyour200healthcare-relateddevelopmentengineersaswellasbyour500professionalservicesandsupportstaffin16countries,Ascomdesigns,con-sults,delivers,integratesandservicesthemostglobalcustomerbaseinoursector.

These numbers highlight Ascom’s increasinglystrongpositioninintelligentlyclosinghealthcaredigitalinformationgapsbetween thepatientbed,cliniciansandhospitalinformationsystems.

Inotherswords,Ascomgeneratesmorethan63%ofourglobalrevenuesfromhealthcareandgrewourhealthcarerevenueby5%in2016.

Ascom benefits from strong market trendsTheglobalhealthcaremacrotrendsareclearandun-deniable.Theworld’sdemographicsaredramaticallyshifting,both increasing inpopulationandbecomingolder,resultinginincreaseddemandformoresupplyofmedicalcareoveralongerperiod.Globallifeexpec-tancyhasrisenfromanaverageofaround68yearsin

Ascom extends its footprint in the healthcare market and thrives on innovation


7ASCOM ANNUAL REPORT 2016 ASCOM BUSINESS REPORT

quests.Wedigitalizethisinformation,intelligentlyana-lyzeandfilterit,andsendthisvalueaddedinformationtotherightpersonorsystemattherighttime,regard-lessoftheirlocationinahospital.Underlyingallofthisisourleadershipinvoicecommunicationshelpingpa-tientsandcaregiverstostayintouchwherevertheyare.

Toensure thebestsolutions forourclients,ourprofessional services teams consultwith and advisethemonhowtoimprovetheirclinicalworkflows.Whenthe optimal solution is designed, we integrate theirhospitalinformationandmedicaldevicesystemswiththerequiredcomponentsofourportfoliosuchasourUnite software platforms, our Digistat ICU workflowsoftware,ourmedicaldeviceconnectivitysuitesandmanyotherapplicationsacrossourproductportfolioofnursecallsystems,featurephonesandAscomMycosmartdevices.Indoingso,Ascomensuresthatnurses,cliniciansandhospitalCIO’shavethevoiceandaction-ableinformationtheyneedimmediately.Thisinforma-tioncanbesimpleasapatient’srequestforablankettoascriticalandcomplexanactivityasnotifyingtherightcliniciansabouttheearlywarningsignsofsepsisorautomaticallyassemblingaresponseteamforalife-threateningevent.

Fromaneconomicperspective,oursolutionscanhelphospitalstodeploytheirlimitedresourcesinnurs-inginamorecosteffectivemanner.Whenworkflowsareefficient,hospitalstaffcanspendmoretimecaring

directlyfortheirpatients,animportantfactorinaccel-eratingpatients’recoveriesandfasterdischargefromahospital.Wehelppatientsgetimmediatetreatmentinanemergency,torecoverinquieterwards,withlessdistractionsandahigherlevelofengagementintheirowntreatment.Allofthiscanleadtobetterpatientout-comes and satisfaction that in turn can lead to de-creased cost structures for hospitals and increasedlevelsofreimbursement.

Increased innovation and solutionsIn2016,wecontinuedtoinvestbothorganicallyandbyacquiringUMS,theItalianICUandORclinicalsoftwareprovider.Wehavemadeour SoftwarePlatformR&Dactivities a standalone organization with increased focusonapplicationsandsoftwaresolutions.Inaddi-tion,in2016weinvestedfurtherintoourprofessionalconsultingservicesaswellasintonewchannels,new geographiesandnewstrategicpartners.

Over the courseof 2017, our clients and share-holderswillbenefitfromthelaunchofseveralnewso-lutions, new software capabilities, new applicationsandnewproductanddeviceplatformssuchasAscomMyco2.Concurrently,wecontinuetoexpandourap-plicationandchannelpartnerfootprint,makingourso-lutionsevenmore relevant andaccessible to clientsaroundtheworld.


8 ASCOM ANNUAL REPORT 2016 ASCOM BUSINESS REPORT

Ascom closes digital information gaps in healthcare

ClinicalInformation

Billing

Healthcare-relatedapps and technologypartners aroundthe world

80

Global healthcare installationsof Ascom mobility solutions

6,600

Global hospitalinstallations of Unite

12,000

Communication

Ascom Unite

messaging suite

Nurse

Patient Account Services, billing

(desktop)Patient Record

(desktop)

Labor Radiology

Emergency Room System

Pharmacy CPOC

OR System ADT

Nurse Call

ASCOM MYCO

Patient

ASCOM MYCO live sites

84


9ASCOM ANNUAL REPORT 2016 ASCOM BUSINESS REPORT

■■ Providingnursingstaff fastandsecureaccess todigitalpatientdata

■■ Fasterandmoreaccuratedecisionsandresponse atthepointofcare

■■ Seamlessintegrationofhealthcareinformationsystemsandmedicalequipment

■■ Fewerinterruptionsforcarestaff

■■ Moretimeforpersonalcareexperiencefor patients

■■ Carestaffwithaccess toallrelevantinformation ontheirhandsets,to avoidgoingbacktonurs-ingstation

■■ Harmoniousinteroper-abilityforend-to-end communication

Benefits of mobileAscom WorkflowSolutions

Clinical Alarms

Installations of nurse call systemin 1,000,000 hospital beds

100,000

Installations of OR, ICU(Scoring System in intensive careUnits) and medical deviceconnectivity software and solutions

100

Critical alerts and alarms per year800,000,000

Patient Beds

Patient Monitor

Ventilator

Infusion Pumps


10 ASCOM ANNUAL REPORT 2016 SUSTAINABILITY

SustainabilityInnovative products, together with socially and environmentally conscious behavior, for the benefit of all our stakeholders

Ascom is committed to conducting its business while complying with all applicable laws on international, national and local levels. As an international technol-ogy group Ascom aims to fulfill the high standards of environmental and social concerns while bringing the business forward as a comprehensive solution provider.

OurCodeofEthicalBusinessConductandseveralCor-porateDirectivesformthebasisofourcorporateculture.TheCodeofEthicalBusinessConductcontainsbindingprinciplesregardinganti-corruption,labor,humanrightsandtheenvironment.ItappliestoeveryAscomemploy-ee.In2016Ascomtooknumerousmeasurestofosterasociallyresponsibleandenvironmentallyfriendlywork-ingandbusinessenvironment.Ascomhasbeenasigna-tory of the United Nations Global Compact (UNGC)since2010andiscommittedtorespectingthe10prin-ciplesofhumanrights,laborrights,theenvironmentandanti-corruption.

Energy efficiency improvedThe three main elements of Ascom’s environmentalimpactarepowerconsumptionduringuse,materialsusedinitsproductsandsolutions,andbusinesstravelof employees. These account for close to 85% of Ascom’stotalcarbonfootprint.

Ascomcontinuestoaddresstheenergyefficiencyof its products and solutions on several fronts: TheMycoprojecthas identifiedvariouspotentialwaysofreducing power consumption of new hardware (e.g.speech,standby).ThenewversionofTelecareIPRe-peateriscalculatedtohaveapowerconsumptionofupto2%lowerthanpreviousversions.

Reparability and serviceability are included in Ascom’s initial design, giving predictable life-cyclecosts.Formallifecycleanalyseshavebeenperformedonkeyproducts.During2016,ananalysiswasmade

thatshowedthenecessityofweight-minimizingpack-agingmaterialusageandofusingmorerecycledpack-agingmaterial.

Sincebusinesstravelisourthirdlargestgeneratorofcarbonemissions, reducing theseemissions isa toppriority.In2016wemadefocusedeffortstodecreaseonsite maintenance in our service organization. Weimplementedseveralmeasures:

■■ RemotemonitoringintheNetherlandsreducedtrav-elinghoursby2,666hours

■■ Germany, Austria and Switzerland implemented acentralizedcallentry,whichincreasedthefirstreso-lutionrateandreducetravel

■■ TheFrenchservicecarfleetaverageemissionwasreducedfrom109gCO2/kmto98gCO2/km

■■ Thenumberofcontractcustomerswithremotefaulthandling in Norway has increased from 98 to 134. In Denmark, customers with surveillance have in-creasedfrom57to101

Ascomhasalsoreducedunnecessarybusinesstravelbyencouraging internal teamstomakebetteruseoftechnology-basedalternatives suchas videoconfer-encing, teleconferencingandonlinemeetings.Manylong-termimprovementshaveresulted:E.g.interconti-nental air travel fromSwedenhasdecreasedCO2eq by20%from2013to2016.

Ascomcomplieswithseveralinternationalregula-tions for protecting the environment. The companytakesEUchemicallegislationssuchasREACH(Regis-tration, Evaluation, Authorization and restriction ofChemicals)andRoHS(RestrictionofHazardousSub-stancesDirective)intoaccount.Ascomrequires100%supplierdocumentationonbillofmateriallevel,com-plementedwithrisk-basedtesting.ThecompanyalsomeetstheWasteElectricalandElectronicEquipmentDirective(WEEE)andisamemberinproducercompli-ance schemes. In addition, Ascom is certified by ISO14001,ISO9001andISO13485.

Monitoringoffirsttiercontractmanufacturersre-garding environmental issues occurs quarterly. Thereports includeCO2emissions,energyconsumption,waterandwaste.60%ofourfirsttiercontractmanufac-turersareISO14001certified.

Compliance is a key topic for AscomTo support the transformation of Ascom into an ICT healthcarecompany,wehavebuiltastrongcomplianceculture throughout the organization. Every Ascom em-ployeeisresponsibleforfullycomplyingwithourcompli-anceprinciples.

In order to improve the understanding and thesensibilityforthesetopics,allemployeeshadtopassacomprehensiveonlinecompliancetrainingincludingaself-assessmenttestinDecember2016.Thetraining


11ASCOM ANNUAL REPORT 2016 SUSTAINABILITY

enhances our employees’ ethical problem-solvingskillsandraisesawarenessofcriticalaspectsinacom-plex international business world. Additional on-sitecompliance trainingswere held in Italy and at a topmanagementmeetinginJanuary2016.

In addition, we completed Medical ComplianceCultureTrainingsinmostproductlinesandglobalfunc-tions(90%attendance)during2016.

Ascomhasanactiveandanonymouswhistleblow-ing procedure in place for anti-competitive practices,corruptionandbriberyissues.Besidethewhistleblowerchannel,acompliancehotlinehasbeensetupforinqui-riesrelatedtocompliancematters.Thesechannelsareaccessibletoallemployees.Noincidentswerereportedthroughourwhistleblowerchannelduring2016.

Wide diversity of employeesTheprincipleofnon-discrimination,andourcommitmenttoadiverseworkforce,islaiddownintheAscomCodeof Ethical Business Conduct. Diversity, particularly ofgender,ethnicityandgeneration, isacorevalueofallour recruiting, promotion and development activities.Equalityanddiversityplansareinplacewhererequiredbylaw.Recruitmentdiversity(male/female)amountedtoabout20%during2016,whiletherecruitmentdiversityofmanagementmembersreachedover30%.

Ascomhassignedcollectiveagreementsonwork-ingconditionswhereapplicable,includingagreementson remunerationandcompany-specificpensionplansforemployees.Regularassessmentsofindividualper-formanceareconductedonayearlybasis.

During2015and2016mostmanagersoftheformerWirelessSolutionsDivisionattendeda leadershipbootcamp.WealsostartedtheLeadershipDevelopmentPro-gramfornewmanagers.Withtheseprogramsweaimtoprovideeachmanagerwithaneightdayhands-on-skillstrainingtohelpthemfurtherdeveloptheirleadershipca-pacitybasedonourcorporatevaluesandprinciples.

Gold recognition level from EcoVadisSince2012,AscomhasbeenannuallyevaluatedbytheindependentCSRassessmentgroupEcoVadis(www.ecovadis.com)byrequestfromseverallargeEuropeancustomers.Ascomwasawardedthegoldrecognitionlevel inDecember2015.Thisexcellent resultmeansAscomisamongthetop5%performersevaluatedbyEcoVadis. The EcoVadismethodology takes into ac-count21CSRcriteriawhicharecontainedunderfourthemes: environment, labor, fair business practicesandsustainableprocurement.ThemethodologyandcriteriaareinlinewithinternationalCSRstandardsin-cludingtheGlobalReportingInitiative,UNGlobalCom-pact,andISO26000.Weplacedourselvesbetterthanaverageinallareas,anddistinguishedourselvesintheareaofenvironmentandfairbusinesspractices. For more information visit www.ascom.com/corp/

corporate-governance/sustainability.html

Purchasing activities include controls to ensurethatsupplierscomplywithapplicablelawsandregula-tions, including environmental protection, safety, fairlaborpracticesandrestrictionsonuseofconflictmin-erals. Contracts for first tier contract manufacturerscontainmandatorysustainabilityandcompliancecom-mitments.Ascomalsorequires thatourfirst tiercon-tractmanufacturermeet the tenprinciplesof theUNGlobalCompact;thisisverifiedbythemsigningaSus-tainabilityCommitmentincludedintheircontract.

In regards to the conflict minerals tin, tantalum,tungsten,andgold(3TG)Ascomiscommittedtoimple-menting responsible supply chains for minerals fromconflict-affectedandhigh-riskareas.During2015and2016,AscomimplementedprocessestobeconsistentwithOECDduediligencerequirements.Wehavecon-ductedReasonableCountryofOriginInquiry(RCOI)forsmelters/refiners reported in supply chains. The filelisted261smelters.33ofthesesmeltersaresourcingorthereisreasontobelievetheymaybesourcing,fromthecoveredcountries.All33ofthesesmelterscomplywiththeCFSP(ConflictFreeSourcingProgram)oftheCon-flict-FreeSourcingInitiative(CFSI).During2016continu-ingwork identifiedmoresmelters inoursupplychain,andatyear-endAscomgainedinformationonmorethan75%ofthese.Non-respondingsuppliershavebeenre-duced from 14% to4%.Ascomwill continue toobtainfurtherinformationonsuppliersof3TG.

“To support the transformation of Ascom into an ICT health-care company, we have built a strong compliance culture throughout the organization.” Holger Cordes, CEO Ascom


12 ASCOM ANNUAL REPORT 2016 CORPORATE GOVERNANCE

Corporate Governance

Listed corporation: Ascom Holding AG AscomHoldingAG(AscomHoldingSA,AscomHolding Ltd.)isajoint-stockCompanyheadquarteredinBaar,Switzerland.IthasasharecapitalofCHF18,000,000,dividedinto36,000,000registeredshareswithaparvalueofCHF0.50pershare.

TheCompany’sregisteredsharesaretradedontheSIXSwissExchangeSwissReportingStandardun-derISINCH0011339204,symbolascn.Tickersymbols:

■■ Bloomberg: ASCN SW■■ Reuters: ASCN.S

Market capitalization as of 31 December 2016 was CHF576.0million.

Unlisted Group companiesThefollowingcompaniesbelongtotheAscomHoldingAGscopeofconsolidation(seetableonpage14).1. CORPORATE STRUCTURE

AND SHAREHOLDERS

Ascom is fully committed to goodCorporateGover-nance. The information published in the CorporateGovernance report follows the SIX Swiss Exchangedirectivesonstandards relating toCorporateGover-nance. All information within this Corporate Gover-nancereportreferstorulesandregulationsthatwereineffectasof31December2016. Operating corporate structure (as of 1 January 2017)

*AlsomemberoftheExecutiveBoard.

CEOHolgerCordes*

LegalJudithBischof

Corp. Secretary &Communications / IR

DanielLack

North AmericaTimWhelehan

Regional Sales Organizations

COOClaesÖdman*

Software PlatformsAndréNeu

CFOBiankaWilson*

Marketing & Business Development

FrancisSchmeer*

SalesHolgerCordes*


13ASCOM ANNUAL REPORT 2016 CORPORATE GOVERNANCE

TheAscomTopManagement

LTR:DanielLack,JudithBischof,TimWhelehan,HolgerCordes,ClaesÖdman,BiankaWilson,AndréNeu,FrancisSchmeer.



Shareholders

Registered shareholdersAsof31December2016,therewere4,630shareholdersregisteredintheshareregisterofAscomHoldingAG.

Share ownership as of 31 December 2016

Number of shares Number of shareholders

1to100 889

101to1,000 2,424

1,001to5,000 1,047

5,001to10,000 124

Morethan10,000 146

Total 4,630

Significant shareholdersThe following significant shareholders exceeding athresholdof3%ofvotingrightswererecordedintheshareregisterasof31December2016:

■■ VeraisonSICAV,Zurich:7.62%■■ UBS Fund Management (Switzerland) AG, Basel:3.66%

Thisdoesnotcovershares,whicharenotregisteredintheshareregister(disposhares).Disposharesamount-edto35.23%asof31December2016.

In accordance with the disclosure announcementsmadeaccordingtoArticle120oftheFinancialMarketInfrastructureAct(FMIA),thefollowingpartieswithvot-ingrightsexceedingathresholdof3%areregardedassignificantshareholdersinAscom:

■■ UBS Fund Management (Switzerland) AG, Basel:Ascomsecurities representing5.32%of the votingrights(announcementdated27August2016)

■■ Schrodersplc,London,UK:Ascomsecuritiesrepre-senting5.068%ofthevotingrights(announcementdated11December2015)

■■ VeraisonSICAV,Zurich:Ascomsecuritiesrepresent-ing5.0176%ofthevotingrights(announcementdat-ed4March2016)

■■ Sterling Strategic Value Ltd., Tortola, British VirginIslands:Ascomsecuritiesrepresenting3.8652%ofthevotingrights(announcementdated15December2016)

■■ Credit Suisse Funds AG; Zürich: Ascom securitiesrepresenting3.30%of thevotingrights (announce-mentdated13September2016)

■■ NorgesBank,Oslo,Norway:Ascomsecuritiesrepre-senting 3.16% of the voting rights (announcementdated30April2014)

■■ BlackRock Inc., New York, USA: Ascom securitiesrepresenting2.69%ofthevotingrightsandsaleposi-tionsof0.96%(announcementdated24September2016)

Unlisted Group Companies: Ascom Holding AG (as of 31 December 2016)

Country Company Registered Office Share Capital Parent Company Group’s Interest

Australia GTMResourcesPty.Ltd. Chippendale AUD 3 AscomHoldingAG 100%

AscomIntegratedWirelessPty.Ltd. Chippendale AUD 3,000,000 GTMResourcesPty.Ltd. 100%

Belgium Ascom(Belgium)NV Brussels EUR 1,424,181 AscomHoldingAG 100%

Denmark AscomDanmarkA/S Glostrup DKK 1,200,000 AscomHoldingAG 100%

Finland AscomMiratelOy Turku EUR 33,638 AscomHoldingAG 100%

France Ascom(France)SA Nanterre EUR 2,000,000 AscomHoldingAG 100%

Germany AscomDeutschlandGmbH Frankfurta.M. EUR 2,137,200 AscomUnternehmensholdingGmbH 100%

TechnologieparkTeningenGmbH Emmendingen EUR 6,136,000 AscomUnternehmensholdingGmbH 94% AscomSolutionsLtd. 6%

AscomUnternehmensholdingGmbH Frankfurta.M. EUR 5,113,000 AscomHoldingAG 100%

Italy AscomUMSs.r.l. Scandicci EUR 100,000 AscomSolutionsLtd. 100%

Malaysia Ascom(Malaysia)SdnBhd Ampang MYR 1,000,000 AscomHoldingAG 100%

Netherlands Ascom(Nederland)BV Utrecht EUR 1,361,000 AscomSolutionsLtd. 100%

Norway Ascom(Norway)A/S Oslo NOK 1,250,000 AscomSolutionsLtd. 100%

Singapore AscomSolutions(Singapore)PteLtd Singapore SGD 50,000 AscomSolutionsLtd. 100%

Sweden Ascom(Sweden)AB Gothenburg SEK 96,154,000 AscomHoldingAG 100%

Switzerland AscomManagementLtd. Baar CHF 200,000 AscomHoldingAG 100%

MocsaAGinLiquidation Berne CHF 100,000 AscomHoldingAG 100%

AscomSolutionsLtd. Mägenwil CHF 10,000,000 AscomHoldingAG 100%

United Kingdom Ascom(UK)Ltd. Birmingham GBP 50,000 AscomSolutionsLtd. 100%

USA Ascom(US)Inc. MorrisvilleNC USD 1 AscomSolutionsLtd. 100%



Furtherdetailsregardingtheseshareholdersaswellasadditionalinformationregardingtheindividualdisclo-sure notices in 2016 are available on the disclosureplatform of the SIX Swiss Exchange at www.six- exchange-regulation.com/en/home/publications/ significant-shareholders.html?companyId=ASCOM

The freefloatof thesharesofAscomHoldingAG is100%since1November2013.

Asofthebalancesheetdate,theCompanyheld98,075treasury shares, representing 0.27% of voting rights.TheCompanyonlyheldownsharestobacktheongoinglong-term incentive plans (stock option plans, sharematchingplans).

Therearenoknownshareholders’agreements.

Cross-shareholdingsTheAscomGrouphasnotentered into cross-share-holdingswithother companies in termsof capitalorvotingrights.

2. CAPITAL STRUCTURE

Ordinary share capitalSince6April2006,thesharecapitalhasamountedtoCHF18,000,000,dividedinto36,000,000registeredshareswith apar valueofCHF0.50per share. Thesharecapitalisfullypaidup.

At theAnnualGeneralMeeting held on 6 April2006,theCompany’ssharecapitalwasreducedfromCHF 198,000,000 to CHF 18,000,000 (par valuereducedtoCHF0.50).ParvalueofCHF5perregis-teredsharewasrepaidon28June2006.

Share structure

Number31.12.16(CHFm) Number

31.12.15(CHFm)

Registered sharesparvalueCHF 0.50

36,000,000 18.0 36,000,000 18.0

Registered shareholders

4,630 4,412

Bonus certificatesAscomHoldingAGhasnot issuedanybonuscertifi-cates.

Authorized share capital/conditional share capitalTheCompanyhasnoauthorizedorconditional sharecapital.

Changes in equityThe equity of Ascom Holding AG has changed asfollows:

CHF 1,000 2016 2015 2014 1 2013

Sharecapital

18,000 18,000 18,000 18,000

Legalreserves

6,523 6,523 6,523 17,577

Retainedearnings

395,203 469,538 432,053 384,232

Treasuryshares

(1,046) (2,345) (9,206)

Total 418,680 491,716 447,370 419,809

1 ThefigureshavebeenadjustedtothenewSwissaccountinglegislation oftheSwissCodeofObligations.

Limitations on transferability and nominee registrations

■■ Inprinciple,theArticlesofAssociationofAscomHold-ingAGcontainnolimitationsontransferabilityandnostatutoryprivileges(www.ascom.com/corp/corporate-governance/directives-and-guidelines.html).

■■ Theshare registrationguidelinesarepublishedontheCompany’swebsite(www.ascom.com/en/share-registration-guidelines.pdf).

■■ Every person recorded in the share register is re-gardedasashareholderorbeneficiaryvis-à-vistheCompany.

■■ Forregisteredshares,ashareregisterismaintainedinwhichthenamesandaddressesoftheownersandbeneficiariesareentered.ChangesmustbereportedtotheCompany.

■■ Entryintheshareregisterrequiresproofofacquisi-tionof titletothesharesorofbeneficiarystatus.Apurchaserofregisteredsharesisenteredintheshareregisteruponrequestasavotingshareholderifhe/sheexpresslydeclaresthathe/sheacquiredthereg-isteredshares inhis/herownnameandonhis/herown account. If the purchaser is not prepared tomakesuchadeclaration,theBoardofDirectorsmayrefuseregistrationasavotingshareholder.

■■ After consulting the party involved, the Companymaydeleteentriesintheshareregisterifsuchentriesoccurredinconsequenceoffalsestatementsbythepurchaser.Thepurchasermustbeinformedimmedi-atelyofthedeletion.

■■ Admissionofnominees isdecidedby theBoardofDirectors.Noapplicationsinthisregardweresubmit-tedin2016.



Options/convertible bonds

Options/share matching plansAscomstockoptionplansaswellasthesharematch-ing plan are listed in the Remuneration Report on pages27to41.

Convertible bondsAscomHoldingAGhasnotissuedanyconvertiblebonds.

Management transactionsThelistingrulesoftheSIXSwissExchangestipulatea disclosure obligation in respect of managementtransactions, including exercise of options, acquisi-tionsandsalesofAscomshares.Toensurecompli-ancewiththeseprovisions,theBoardofDirectorshasissuedanAnnextotheOrganizationRegulations.De-tailscanbe foundon thedisclosureplatformof theSIXSwissExchangeatwww.six-exchange-regulation.com/en/home/publications/management-transac-tions.html?companyId=ASCOM

3. BOARD OF DIRECTORS

Primary tasks of the Board of DirectorsTheBoardofDirectorsholdsultimatedecision-makingauthorityanddeterminesthestrategic,organizationalandfinancialplanningguidelinesfortheGroupaswellas the Company objectives. The Board of Directors is responsible for theoveralldirectionaswellas the supervision and control of the management. It setsguidelinesforbusinesspoliciesandensuresthatit isregularlyinformedonthecourseofbusiness.

TheprimarytasksoftheBoardofDirectorsunderthe Swiss Code of Obligations and the Articles ofAssociationofAscomHoldingAGare:

■■ OverallmanagementoftheCompanyandtheGroup,including setting the strategic direction as well as issuingdirectivesasrequired

■■ Definingtheorganizationandmanagementstructure■■ Layingouttheformsofaccountingandfinancialcon-trolaswellasfinancialplanning

■■ AppointinganddischargingpersonsentrustedwiththemanagementandrepresentationoftheCompanyanddeterminingwhoisentitledtosignonbehalfoftheCompany

■■ Ultimatesupervisionofbusinessactivities■■ DrawinguptheAnnualReportandtheRemunerationReport as well as preparing the Annual GeneralMeetingandcarryingoutitsresolutions

■■ Informingthecourtsintheeventofexcessiveindebt-edness

■■ Passingresolutionsonthefinancingofbusiness,andinparticulardecidingoncapitalincreasesandIPOsand the consequent changes to the Articles of Association

■■ Passingresolutionsonparticipationsofmajor/strate-gicsignificance

■■ Determining thecompensation formembersof theBoardofDirectorsandtheExecutiveBoardsubjecttotheapprovaloftheAnnualGeneralMeeting

Election and composition of the Board of Directors of Ascom Holding AGTheArticlesofAssociationdefinetheelectionoftheBoardofDirectorsofAscomHoldingAGasfollows:

■■ TheBoardofDirectorsconsistsofatleastthreeandnotmorethansevenmembers.

■■ TheGeneralMeetingelects themembers and theChairmanoftheBoardofDirectorsindividually.

■■ ThetermsofofficeofthemembersoftheBoardofDirectorsaswellasthetermofofficeoftheChairmanoftheBoardofDirectorsshallendnolaterthanattheclosing of the ordinary General Meeting followingtheirelection.Re-electionispermitted.

■■ ThemajorityofthemembersoftheBoardofDirec-torsshallbeindependentmembers.

■■ Members of the Board of Directors retire from theBoardofDirectorsattheAnnualGeneralMeetingofthe respective yearwhen they complete their 70th yearofage.

Ascom’sArticles of Association are available on theCompany website: www.ascom.com/corp/corporate-governance/directives-and-guidelines.html

TheBoardofDirectorsaimsforabalancedprofession-alexpertiseanddiversityofitsmemberswhenpropos-ingthemforelectiontotheAnnualGeneralMeeting.Theselectionprocessisregardlessoforigin,national-ity,culture,religion,orgender.

AttheAnnualGeneralMeetingofAscomHoldingAGheldon13April2016,theshareholderselectedthefollowingmembersoftheBoardofDirectorsindividu-allyandforatermofoneyearuntiltheAnnualGeneralMeeting2017:

Member since Elected until AGM

JuhaniAnttila,Chairman 2001 2017

DrJ.T.Bergqvist 2005 2017

DrValentinChaperoRueda 2016 2017

DrHaraldDeutsch 2014 2017

UrsLeinhäuser 2015 2017

ChristinaStercken 2014 2017

AndreasUmbach 2010 2017



■■ Inaddition,membersoftheBoardofDirectorsmayoccupyorexercisefiveuncompensatedpositionsinthehighestmanagingor supervisingbodyof suchentities,wherebyexpenserecoveryisnocompensa-tion.

■■ TheChairmanoftheBoardofDirectorsmayexerciseatotalofuptothreepositionsinotherpubliclytradedcompanies.

■■ Inadditiontothesemandates,membersoftheBoardofDirectorsmayoccupyorexercisenotmorethanfivepositionsinseveraldifferentcompaniesthatformthesamegroupofcompaniesorpositions thatareheldbasedontheInstructionsoftheCompany.

JuhaniAnttilaalsoactedasCEOoftheAscomGroupconcurrentlyfrom1January2003to31May2004.

NoneoftheothermembersoftheBoardofDirec-torspreviouslyworkedfortheAscomGroup,nordoesanymemberoftheBoardofDirectorsperformanyper-manentmanagementorconsultancyfunctionsforim-portant Swiss or foreign interest groups or hold anyofficialpositionsorpoliticaloffices.

Mode of operation of the Board of DirectorsAsarule,theBoardofDirectorsmeetsonamonthlybasis.Additionalmeetingsorconferencecallsareheldasandwhennecessary.Ingeneral,theCEOandCFOattendallordinarymeetingsoftheBoardofDirectors.Inaddition,executivesessionsareheld.Othermem-bersoftheExecutiveBoardaswellasexternalexpertsareinvitedtoattendmeetingstoaddressspecifictop-icsifnecessary.

20 meetings (including both physical meetingsandconferencecalls)wereheldin2016.Boardatten-dancewas97.8%.TheordinarymeetingsoftheBoardofDirectorslastonefulldayandstrategymeetingslasttwodays.

Theshareholdersre-electedJuhaniAnttilaasaChair-man of the Board and Andreas Umbach, Dr J.T.Bergqvist,andDrHaraldDeutschasmembersoftheCompensationCommitteebothforatermofoneyear.

Allmembersof theBoardofDirectorsarenon-executive members. No member of the Board of DirectorshasanysignificantbusinessrelationshipwithAscomHoldingAGoritssubsidiaries.

Secretary of the Board of DirectorsDrDanielLackhasservedasSecretaryoftheBoard ofDirectorssinceMay2001.

Changes to the Board of DirectorsDrValentinChaperoRuedawaselectedasnewmem-ber to theBoardofDirectors at theAnnualGeneralMeeting2016foratermofoneyear.

Internal organization■■ ExceptfortheelectionoftheChairmanoftheBoardandthemembersoftheCompensationCommittee,theBoardofDirectorsisself-constitutinganddesig-nates its other committees and the Secretary. ThelatterneedsnotbeamemberoftheBoard.

■■ TheBoardofDirectorsisquoratewhenthemajorityofmembersarepresent. In theeventofcapital in-creases,suchaquorumisnotrequiredfordecisionsconcerningdefinitionofthecapitalincrease,amend-ments to theArticles of Association or resolutionsregardingthecapitalincreasereport.

■■ TheBoardofDirectorspasses its resolutionsby amajorityof thevotescast.TheChairmanholds thecastingvote.

■■ ResolutionsmayalsobeadoptedbywrittenconsenttoaproposalcirculatedbytheChairmanamongallmembersandpassedbyamajorityofallmembersoftheBoardofDirectors.

■■ Minutes are kept of deliberations and resolutions,andaresignedbytheChairmanandtheSecretary.

■■ Membersof theBoardofDirectorsmayexercise aconsultingmandatefortheAscomGroupalongsidetheiractivityontheBoard,subjecttotheunanimousconsentoftheBoardofDirectors.Therewerenosuchconsultingmandatesasofthebalancesheetdate.

Mandates outside the Ascom Group of members of the Board of Directors Article20dof theArticlesofAssociationdefinesthemandatesoutsidetheAscomGroup:

■■ Membersof theBoardofDirectorsmayoccupyorexercisefouradditionalpositionsagainstcompensa-tioninthehighestmanagingorsupervisingbodyofotherentitiesthatareobligedtobeenteredintothecommercialregisteroracomparableforeignregisterandthatareneithercontrolledbynorthatcontroltheCompany.



Members of the Board of Directors

Juhani Anttila Chairman

Nationality: Finland | Born 1954 |

Place of residence: Zug, Switzer-

land | Member since 2001 |

Chair man since 2002 | Elected

until AGM in 2017

StudiedlawattheUniversityof

Helsinki,Finland(1976Bache-

lor’sdegree,1978Master’s

degree);movedtoSwitzerland

in1978; 1981 – 1985Managing

PartneratCACorporateAdvisers,

Zurich;1985AppointedManag-

ingDirectorofNokiaGmbH,

Zurich,andresponsibleforvari-

ousactivitiesfortheNokia

Group;1990 – 1995Chairmanof

theExecutiveBoardofNokia

(Deutschland)GmbH,Pforzheim;

1996 – 2002CEOoftheSwisslog

Group;since 14 May 2002Chair-

manoftheBoardofDirectorsof

AscomHoldingAG;

1 January 2003 – 31 May 2004

alsoCEOoftheAscomGroup;

Since 2004ManagingPartnerof

ValcreaAG,Zug

Dr J.T. Bergqvist

Nationality: Finland | Born 1957 |

Place of residence: Helsinki,

Finland | Member since 2005 |

Elected until AGM in 2017

1981MasterofScience,Helsinki

UniversityofTechnology;1987

DoctorateinComputerScience,

HelsinkiUniversityofTechnology;

1980 – 1987Softwarespecialist

andProjectManageratNokia;

1988AssistantProfessorat

HelsinkiSchoolofEconomics;

1988 – 1995AreaGeneral

Manager,NokiaNetworks;1995

VicePresident,CellularTrans-

mission,NokiaNetworks;1997

SeniorVicePresident,Radio

AccessSystems,NokiaNetworks;

2000 – 2005Senior/Executive

VicePresident & GeneralManag-

er,GlobalBusinessUnits,Nokia

Networks;2002 – 2005Member

oftheGroupExecutiveBoard,

NokiaCorporation;2009 – 2012

CEO(andlaterChairman)of

K.HartwallOyAB,Söderkulla,

Finland;Since 2014Chairman

andCEOofHuurreGroup,

Vantaa,Finland

Dr Harald Deutsch

Nationality: Germany | Born

1962 | Place of residence:

Schwalbach am Taunus,

Germany | Member since 2014 |

Elected until AGM in 2017

1987Graduationasphysician.

Medicalexam,Universityof

Cologne;1988Approbation,and

memberofGermanMedical

Association;1988Graduationas

MasterofScience(MSc)inPhys-

ics,UniversityofCologne;1989

PromotiontoMedicalDoctor

(MD),UniversityofCologne;

1988 – 1989Bundeswehr(Ger-

manyArmedForces):Military

Surgeon;1990 – 1998Behring-

werkeAG,Marburg,Germany:

SoftwareDirector;1998 – 2003

BoozAllen & Hamilton,

Frankfurt/M.:PrincipalandMem-

beroftheGermanBoard;

2003 – 2008Accenture,Kron-

berg,Germany:Executive

PartnerandManagingDirector;

2008 – 2012CSCComputer

SciencesCorporation,Aldershot,

UK,andWiesbaden,Germany:

VicePresidenthealthcareEMEA;

2012–2015BearingPointGmbH,

Frankfurt/M.andAmsterdam:

PartnerandIndustryLeadhealth-

care;Since 2015Independent

Consultant

Dr Valentin Chapero

Nationality: Spain/Switzerland |

Born 1956 | Place of residence:

Wilen bei Wollerau, Switzerland |

Member since 2016 | Elected

until AGM in 2017

1986/1988MasterandPhD

(Drrer.nat.)inPhysics,University

ofHeidelberg,Germany;

1988 – 1992DirectorofSystems

IntegrationforMainframeUnix

Systems,SiemensNixdorfInfor-

mationsSystemsAG,Paderborn,

Germany;1992 – 1994VicePresi-

dentProfessionalServices,

SiemensNixdorfSpain,Madrid;

1994 – 1996VicePresidentNet-

workSystems,SiemensAG

Spain,Madrid;1996 – 1999 CEO

SiemensAudiologischeTechnik

GmbH,Erlangen,Germany;

2000 – 2002PresidentMobile

Network,SiemensAG,Munich;

2002 – 2011CEOSonovaHolding

AG,Stäfa;Since 2011Business

Angel & InvestorValameroHold-

ingAG,Wilenb.Wollerau;Since

2015Co-founderandPartner

VeraisonCapitalAG,Zurich



Urs Leinhäuser

Nationality: Switzerland | Born


Winterthur, Switzerland | Mem-

ber since 2015 | Elected until

AGM in 2017

1983DegreeinBusinessAdmin-

istration,ZurichUniversityof

AppliedSciences;1983 – 1986

CantonalTaxDepartmentSchaff-

hausen:TaxInspector;

1986 – 1988RefidarMooreSte-

phens,Zurich:TaxConsultant,

DeputyHeadTaxConsultancy

Department;1988 – 1994Cer-

berusAG,Männedorf:Group

Controller;1992AlsoManaging

DirectorCerberusDenmark;

1998IMDLausanne(SSE);

1995 – 1999GeorgFischerAG,

Schaffhausen:HeadofCorporate

Controlling;laterHeadofFinance

andControllingPipingSystems

Division;1999 – 2003Mövenpick

Holding,Adliswil:CFO,Group

ExecutiveCommittee;2003 – 2011

RieterHoldingAG,Winterthur:

CFOandHeadCorporateCen-

ter,GroupExecutiveCommittee;

2011 – 2014AutoneumHolding

AG,Winterthur:CFOandDeputy

CEO,GroupExecutiveBoard;

Since 2014Entrepreneurand

since 2016 PartnerAdulco

GmbH,Winterthur

Christina Stercken

Nationality: Germany | Born


Munich, Germany | Member

since 2014 | Elected until AGM

in 2017

1982MasterinEconomics,Uni-

versityofBonn;1983 – 1984BMW

PtyLtd.,Isando,SouthAfrica:

MarketingConsultant;

1985 – 1987SiemensAG,Munich:

ConsultantStrategicPlanning

andMarketingforCommunica-

tionandInformationTechnology

Group;1988 – 1989SiemensAG,

Munich:ConsultantManagement

ToolsandTraining,Corporate

Development & Strategy;

1989 – 1994SiemensAG,Munich:

SeniorConsultantCorporate

Projects(InhouseConsulting)

CorporateDevelopment & Strate-

gy;1994 – 1995SiemensAG,

Munich:HeadofRegionalStrate-

gy,CorporateDevelopment &

Strategy;1995 – 1997Siemens

Ltd.China,Beijing:Headof

TaskForceChina;1998 – 2000

SiemensBusinessServices

GmbH & OHG,Munich:Headof

BusinessUnitPublicSector;

2000 – 2006SiemensAG,

Munich:ManagingDirectorCor-

porateFinance,Mergers & Acqui-

sitions;Since 2006EAC – Euro

AsiaConsultingPartG,Munich,

Shanghai,Mumbai,andMoscow:

Partner

Andreas Umbach

Nationality: Switzerland/

Ger many | Born 1963 | Place of

residence: Zug, Switzerland |

Member since 2010 | Elected

until AGM in 2017

1989MasterinMechanicalEngi-

neering,TechnischeUniversität

Berlin;1991MasterofBusiness

Administration(MBA),University

ofTexas,AustinTX;1991 – 1995

ManagementAudit,Corporate

PlanningandDevelopingDepart-

ment,SiemensAG,Munich;

1995 – 1999CommercialManag-

er,BusinessUnitPilotandSens-

ingDevices,DrivesandAuto-

mationGroup,SiemensAG,

Erlangen,Germany;1999 – 2002

GeneralManager,subsequently

divisionPresidentofMetering,

PowerTransmissionandDistri-

butionGroup,SiemensMetering

AG,Zug;Since 2002President &

CEO,Landis+GyrGroup,Zug



Mandates outside the Ascom Group

(profit-oriented)


(non-profit-oriented)

JuhaniAnttila,Chairman

ActelionLtd.,AllschwilBL 1

AgrifuturaOy,Eura (Finland)

ValcreaAG,Zug

Anttila & Co.Advisors,Zug

DiamondCircleFoundation,Zug

DrJ.T.Bergqvist HuurreGroupOy, Vantaa(Finland)

RedlaIndustriförvaltningAb,Helsinki(Finland)

J.T.BergqvistOy,Helsinki(Finland)

None

DrValentin ChaperoRueda

GoldbachGroupAG, KüsnachtZH1

QuoAG,OpfikonZH

ValameroHoldingAG, Willenb.Wollerau(including

2mandatesinaffiliatedGroupcompanies)

None

DrHaraldDeutsch None None

UrsLeinhäuser BurckhardtCompressionHoldingAG,Winterthur 1 (including2mandatesin affiliatedGroupcompany)

LiechtensteinischeLandesbankAG,Vaduz,

Liechtenstein 1

AmmannGroupHoldingAG,Berne

(including1mandatein affiliatedGroupcompany)

VATGroupAG,HaagSG1

Universität St.Gallen, InstitutIFF, St.Gallen

ChristinaStercken EAC–EuroAsiaConsultingPartG,Munich(Germany) (including3mandatesin

affiliatedGroupcompanies)

Amara Foundatione.V.,

Munich(Germany)

AndreasUmbach Landis + GyrAG,Zug

WasserwerkeZugAG,Zug 1

Wirtschaftskammer,Zug(Chairman)

1 Publiclylistedcompanies.

Self-evaluation of the Board of DirectorsSince2005,theBoardofDirectorshascarriedoutaself-evaluationatyear-endonthebasisofastandard-ized process using a comprehensive questionnaire.Theresultsarediscussedinthefirstquarterinthenextyear,andanymeasuresnecessaryfor improvementsareagreedandimplementedasrequired.

Committees of the Board of DirectorsTosupporttheefficientandeffectiveorganizationofitsduties, theBoardofDirectorshassetupastructurewithtwopermanentcommitteeswhoseprimaryroleisto preparematerials as a basis for decisions by theBoardofDirectorsinspecializedareas.Thetwoper-manentcommitteesaretheAuditCommitteeandtheCompensationCommittee.Theauthoritytomakedeci-sionslieswiththeBoardofDirectors.AllmembersoftheBoardareentitledtoattendanymeetingsofthesecommittees.

ThenominationofcandidatesforelectiontotheBoardofDirectorsandtheselectionofcandidatesforappointment to theExecutiveBoardandasHeadofCorporateFunctionsaredonebytheentireBoard.

Audit Committee Members: Urs Leinhäuser (Chairman), Dr Valentin Chapero Rueda and Christina SterckenTheBoardofDirectorselects themembers and thechairmanoftheAuditCommitteeforatermofofficeofoneyearuntiltheclosingoftheordinaryGeneralMeet-ingfollowingtheelection.

TheAuditCommitteeiscomposedofthreenon-executivemembersoftheBoardofDirectorsandgen-erallymeetsfourtimesayear(atleastonemeetingperquarter),althoughtheChairpersonmayconvenemeet-ingsasoftenasbusinessrequires.SevenAuditCom-mitteemeetingswereheld in2016,generally lastingseveralhours,whereoftheexternalauditorsattendedfive.Committeeattendancewas94.7%.TheChairmanoftheBoardofDirectorsaswellat theCEOandtheCFOattendedallmeetings.TheSecretaryoftheBoardof Directors prepares themeetings and records theminutes.ThefullBoardofDirectorsiskeptinformedoftheAuditCommittee’sactivitiesfollowingeachmeet-ing,andreceivesacopyoftheminutes.

The Audit Committee’s main activities are:■■ Internalcontrol■■ Financialreporting■■ Financemanagement■■ Riskmanagement■■ Taxmanagement■■ Externalauditing■■ Compliance■■ Litigationmatters

Compensation Committee Members: Andreas Umbach (Chairman), Dr J.T. Bergqvist and Dr Harald DeutschAccordingtotheArticlesofAssociation, theGeneralMeeting elects the members of the CompensationCommitteeindividuallyforatermofofficeofoneyearuntil theclosingof theordinaryGeneralMeetingfol-lowing the election. The Compensation Committeeconsistsofatleasttwoandnotmorethanthreemem-bersof theBoardofDirectors. TheChairmanof theCompensationCommitteehastobeindependent.HeiselectedbytheBoardofDirectors.Intheeventthatthe Compensation Committee has fewer membersthanthenumberofmemberselectedbythelastGen-eral Meeting and is therefore not fully staffed, theBoardofDirectorselectsthemissingmembersfortheremainingterm.



■■ Defining the internal audit and submitting the pro-posaltotheAnnualGeneralMeetingforelectionoftheauditors

■■ Submitting proposals on dividends to the AnnualGeneralMeeting

■■ Issuingandimplementinglong-termincentiveplans

Information and control instruments in respect of the Executive Board/management instruments TheAscomGroup’smanagementinformationsystem(MIS)consistsofmanagementreportingandfinancialconsolidation.

Each month, the balance sheet, income state-ment, incomingorders,orderbacklogandemployeeheadcountfortheindividualcompaniesareenteredinthemanagementreportingsystem.ThisinformationisbasedontheregulationandaccountingstandardsandconsolidatedforthevariousdivisionsandfortheGroupasawhole,andcomparedagainstthepreviousyear’sfiguresandthecurrentbudget.TheExecutiveBoarddiscussestheresultsindetailonamonthlybasisanddecidesonactionstobetaken.

Full financial consolidation (including cash flowstatement) incompliancewith the regulationandac-countingstandardsisperformedonaquarterlybasis.

Financial reports are submitted to the Board ofDirectorsonamonthlybasis.Additionalmanagementinstrumentsformonitoringmanagementprocessesin-clude strategic medium-term planning (MTP), annualplanningandquarterlyforecasts.

Aquarterlyreportonpendinglawsuitsissubmit-tedtotheAuditCommittee.AspartofBusinessRiskandOpportunityManagement(BROM),anupdatedriskmapfortheGroupandtheindividualdivisionsissub-mittedtotheBoardofDirectorsonasemi-annualba-sis. Themeetings of theBoard ofDirectors and theAuditCommitteeareattendedbytheCEOandCFOaswell as, whenever necessary, by other members ofManagement.

Internal auditTheGroupdoesnothavean in-house internal auditfunction.TheBoardofDirectorsempoweredtheAuditCommitteetomandateanexternalauditfirmtocarryoutspecialfocusaudits,asneeded.Accordingly,suchinternal audits are conducted from time to time asmandated by the Audit Committee. During 2016, nospecialfocusauditshavebeencommissioned.Internalaudit fees are based on the scope of services rendered. Fees incurred in 2016 were nil (2015: CHF80,000).

The Compensation Committee is composed ofthreenon-executivemembersof theBoardofDirec-torsandisconvenedbytheChairpersonasoftenasbusinessrequires.Sevenmeetingswereheldin2016.Committeeattendancewas100%.TheChairmanoftheBoardattendedthreemeetingsin2016.TheCEOat-tendedthemeetingsasandwhenrequired.TheSec-retaryoftheBoardofDirectorspreparesthemeetingsandrecordstheminutes.ThefullBoardofDirectorsiskept informedof theCompensationCommittee’sac-tivitiesfollowingeachmeeting,andreceivesacopyoftheminutes.

AmajortaskoftheCompensationCommitteeistopreparetheresolutionoftheBoardofDirectorscon-cerningthecompensationofthemembersoftheBoardofDirectorsandthemembersoftheExecutiveBoardtobeapprovedbytheAnnualGeneralMeeting.Toful-fill itsduties,theCompensationCommitteemaycon-sult other persons and external consultants for sup-port.In2016,theCompensationCommitteemandatedanexternalconsultantinconnectionwiththeassess-mentoftheBoardfees.

Othermain fields ofwork of theCompensationCommitteeshallconsistofmakingrecommendationstotheBoardinrelationto

■■ AscomGroupremunerationpolicies■■ FixingcompensationmodelsfortheBoardofDirec-torsandtheTopManagement

■■ Implementationandmonitoringof long-term incen-tiveplans

Areas of responsibilityTheBoardofDirectorshasdelegatedtheoperationalmanagementof theCompany and theentireAscomGroup to theCEOunless otherwise requiredby thelaw, the Articles of Association or the OrganizationRegulations. The CEO, together with the ExecutiveBoard, is responsible for theoverallmanagement oftheAscomGroup.

The Board of Directors explicitly reserves thepowertodecideonthefollowingmatters:

■■ Authorizingimportantacquisitionsanddivestments■■ AppointinganddischargingmembersoftheExecu-tiveBoardandtheTopManagement

■■ Definingcompensationmodels formembersof theBoardofDirectorsandtheExecutiveBoard(subjecttotheapprovaloftheAnnualGeneralMeeting),andtheTopManagement

■■ Approvingthebudget■■ Arranging public bonds and important frameworkcreditagreements

■■ Substantialinvestments■■ Issuing theOrganizationRegulations and their An-nexes



Risk managementAsaninternationallyactivegroup,Ascomisexposedtoavarietyof risksarising from itsoperations in thenormalcourseofbusiness.Riskmanagementisthere-foreanintegralpartofGroupmanagementandhencepartof thebusinessprocesses.GroupTreasurycen-trallymonitorsfinancialrisks(liquidity,foreigncurrency,interest rate, credit risks) in accordancewith writtenguidelines.Capitalriskisalsomonitoredusingdefinedthresholdsforthedebtratioandtheequityratio.

Further informationonriskmanagementcanbefound in note 28 to the financial statements of the AscomGrouponpage71ofthisAnnualReport.

Internal Control System (ICS)ABoarddirectiveof 11December2008and the ICSmanualgoverntheInternalControlSystem(ICS).TheICSensurestheimplementationofappropriateproce-duresandmeasuresforthepurposeofidentifyingandmonitoringthemainfinancialriskstowhichtheCom-panyisexposed.Inparticular,theaimoftheICSistoensuretheintegrityandcompletenessofaccounting,toprovidetimelyandreliablefinancialreporting,andtoprevent,minimizeandidentifyerrorsandirregularitiesinthefinancialstatements.

Inordertoachievethesetargets,Groupcompa-nies in scope are determined annually. Hereby, it isensuredthatatleast80%oftherevenueandoftotalassetsof theGroupare covered.Theexternal auditconfirms theexistenceof the ICS inconnectionwiththeyear-endaudit.Additionally,externalauditsubmitsimprovementsuggestionsonayearlybasis,whichareimplementedinthefollowingyear.

4. EXECUTIVE BOARD

The Executive Board of the Ascom GroupTheBoardofDirectorshasdelegatedtheoperationalmanagementof theCompany and theentireAscomGroup to theCEOunless otherwise requiredby thelaw, the Articles of Association or the OrganizationRegulations.AsmembersoftheExecutiveBoardareconsideredtheCEOandeach furtherpersonwho isexplicitlyappointedassuchbytheBoardofDirectors.Asarule,membersoftheBoardofDirectorsshallnotbeontheExecutiveBoard.

Composition of the Ascom Executive BoardThe Ascom Group Executive Board comprised the followingmembersasof31December2016:

Executive Board member since

HolgerCordes CEO 01.06.2016

BiankaWilson CFO 01.10.2013

ClaesÖdman COO(formerGeneralManager

WirelessSolutions)

14.06.2011(COOsince 01.10.2016)

FrancisSchmeer HeadofMarketing&BusinessDevelopment

(formerHeadof Strategy&Business

Development)

01.09.2014 (HeadofMarketing&

BusinessDev. since01.10.2016)

Changes in the Executive BoardHolgerCordesreplacedFritzMumenthalerasCEOoftheAscomGroupasof1June2016.

Rikard Lundqvist, formerGeneralManagerNet-workTestingDivision,lefttheCompanyafterthesaleofthedivisionasof30September2016.

Mandates outside the Ascom Group of members of the Executive BoardArticle20dof theArticlesofAssociationdefinesthemandatesoutsidetheAscomGroup:

■■ Members of the Executive Board may occupy or exercise– subject to theapproval of theBoardofDirectors–oneadditionalpositionagainstcompen-sationinthehighestmanagingorsupervisingbodyofotherentitiesthatareobligedtobeenteredintothe commercial register or a comparable foreignregister and that areneither controlledbynor thatcontroltheCompany.

■■ In addition, members of the Executive Board may occupyorexercisethreeuncompensatedpositionsinthehighestmanagingorsupervisingbodyofsuchentities,wherebyexpense recovery isnocompen-sation.


■■ In addition to these mandates, members of the ExecutiveBoardmayoccupyorexercisenotmorethanfivepositionsinseveraldifferentcompaniesthatformthesamegroupofcompaniesorpositionsthatareheldbasedontheinstructionsoftheCompany.


against compensation


without compensation

HolgerCordes None None

BiankaWilson None Ascaro Vorsorgestiftung,

Berne 2

ClaesÖdman SensysGatsoGroupAB,Stockholm(Sweden) 1

None

FrancisSchmeer None None

1 Publiclylistedcompany.2PositionheldbasedontheinstructionsoftheCompany.



Members of the Executive Board (as of 1 January 2017)

Claes Ödman COO

Nationality: Sweden | Born 1965

1990MasterofScienceinEngi-

neeringPhysicsandMasterof

BusinessAdministration(Chalm-

ersUniversityGothenburg);

1990 – 1994AreaManagerSaab

MarineElectronicsAB,Gothen-

burg;1994 – 1998AreaManager

EricssonRadioSystems,Stock-

holm;1998 – 2001VicePresident

EricssonTaiwanLtd.,Taipei

(Taiwan); 2001 – 2005Presi-

dent & CountryManagerEricsson

TelecomPTELtd.,Singapore;

2005 – 2011VicePresidentErics-

sonAB,Stockholm(2005–2008:

MultimediaSolutions;2008–2009

HeadofSalesandMarketing;

2010HeadofRegionProject;

2010–2011EngagementPractic-

esRegionNorthernEuropeand

CentralAsia);2011 – 2016General

ManagerWirelessSolutions

andmemberoftheExecutive

BoardoftheAscomGroup;Since

1 October 2016COOandmem-

beroftheExecutiveBoardofthe

AscomGroup

Holger Cordes Chief Executive Officer

Nationality: Germany |

Born 1969

1995MasterofEconomicsfrom

UniversitédePoitiers(France);

1997Diplom–Volkswirt(Diplo-

maofEconomics)fromUniversity

ofMarburg(Germany);

1997 – 2000ProjectLeaderSAP/

SeniorFP&AAnalystPaulaner

BrauereiKG,Munich;2000 – 2002

ManagerControllingandProcess

Organization,EuropeanTelecom-

municationsHoldingAG,

Frankfurt/M.;2002 – 2006

RegionalControllerMainland

Europe/DirectorInternational

FinancialPlanningandAnalysis,

AspectSoftware,London;

2007 – 2010FinanceDirector

EMEA,CernerGroup,London;

2010 – 2014GeneralManager

CentralEurope,CernerGroup,

Frankfurt/M.;2014 – 2016 COO

EuropeandLatinAmerica,

CernerGroup,Frankfurt/M.;

Since 1 June 2016CEOand

memberoftheExecutiveBoard

oftheAscomGroup

Bianka Wilson Chief Financial Officer

Nationality: Switzerland/

Germany | Born 1967

1993BachelorofBusiness

AdministrationfromCameron

University,LawtonOK(USA);

1994MasterofProfessional

AccountingfromUniversityof

Texas,AustinTX(USA);

1995 – 2000AuditManager

KPMG,HoustonTX(USA);1997

USCertifiedPublicAccountant;

2000 – 2007SeniorManager

KPMG(TransactionServices,

InternationalAccounting & Report-

ing),Zurich;2007Executive

MBA,KPMGEMBAProgram,

ENPCSchoolofInternational

Management,Paris/Universityof

Edinburgh(UK);2007 – 2013

PartnerofKPMG(Advisory),

Zurich;Since 1 October 2013

CFOandmemberoftheExecu-

tiveBoardoftheAscomGroup

Francis Schmeer Head of Marketing & Business Development

Nationality: USA | Born 1972

1994BachelorofMarketing

GeorgetownUniversity,Washing-

tonDC(USA);1994 – 1999Gold-

manSachs,AssociateNewYork/

London;2001MasterofBusiness

Administration,LondonBusiness

School;2001 – 2003Samsung

Group,GlobalStrategist,Seoul;

2003 – 2005T-MobileInterna-

tional,InternationalMarketing

HeadofSMSandIPMessaging

London/Bonn;2005 – 2006

EmpowerInteractive,Chief

MarketingOfficer,London/Singa-

pore;2006 – 2009SonyEricsson

MobileCommunications,Vice

President & GlobalHeadofStrat-

egyandCorporateDevelop-

ment,London/Lund(Sweden);

2010 – 2013OCOerlikonGroup

ExecutiveVicePresident & Head

ofGroupBusinessDevelopment,

MemberofExecutiveLeadership

Team,Pfäffikon(Switzerland);

2014 – 2016HeadofStrategy &

BusinessDevelopmentand


oftheAscomGroup;Since

1 October 2016HeadofMarket-

ing & BusinessDevelopmentand


oftheAscomGroup



■■ Sole proprietor companies, partnerships and legalentities may be represented persons with written authorizationtoactontheirbehalf.

■■ TheBoardofDirectorsmakestherequisitearrange-mentstodeterminevotingrightsandtoestablishtheresultsofvotesandelections.

Independent RepresentativeAccordingtotheArticlesofAssociation, theGeneralMeeting elects an Independent Representative. ThetermofofficeoftheIndependentRepresentativeendswith theclosingof theordinaryGeneralMeeting fol-lowing the election of the Independent Representa-tive.Re-electionisadmissible.IftheCompanyhasnoIndependent Representative, the Board of Directorsdesignates an Independent Representative for thenextGeneralMeeting.

The Independent Representative is obliged tovotethesharesforwhichheorshereceivedproxiesinaccordancewiththeinstructionsgiven.Ifheorshehasnotreceivedanyinstructionswithrespecttovotes,heorsheabstainsfromvotingtherespectiveshares.Thegeneral instruction formotions containedand/or notcontainedintheinvitationtovoteinlinewiththemotionoftheBoardofDirectorsqualifiesasavalidinstructionfortheexerciseofthevotingright.

TheshareholderselectedattheAnnualGeneralMeetingheldon13April2016FranzMüller,Berne,asIndependentRepresentativeforatermofoneyearun-tilthecompletionoftheAnnualGeneralMeeting2017,andDrAlexanderKernen,Berne,ashisrepresentative.FranzMüller andDrAlexander Kernen are indepen-dent and have no further mandates for the AscomGroup.

AllshareholdershavethepossibilitytoregisterontheSherpanyplatformandtogiveon-lineinstructionstotheIndependentRepresentative(www.ascom.com/en/index/investor-relations/annual-general-meeting.htm).Details of the electronic proxies and voting in-structionstotheIndependentRepresentativeareex-plainedintheinvitationtotheAnnualGeneralMeeting.

Resolutions and electionsTheGeneralMeetingiscapableofpassingresolutionsregardlessofthenumberofsharesrepresented.

Unlessthe lawor theArticlesofAssociationre-quireotherwise,theGeneralMeetingshallpassreso-lutionsandelectionswithanabsolutemajorityofthevotes validly cast, whereby abstentions, blank votesandinvalidvotesshallnotcountasvotescast.

TheBoardofDirectorsshalldefinethevotingpro-cedure.Shareholders representingregisteredshareswithanominalvalueofCHF 100,000may requestasecret ballot. This threshold corresponds to 0.5% of thevotes.

Executive CommitteeTheExecutiveCommitteeisanextendedpanel,whichsupportstheExecutiveBoard.Inadditiontothemem-bersoftheExecutiveBoarditconsistsofthefollowingfurthermembers:

DrJudithBischof GeneralCounsel

DrDanielLack CompanySecretary & Communications/IR

AndréNeu HeadofPlatformSolutions

TimWhelehan ManagingDirectorNorthAmerica

Mode of operation of the Executive BoardAsarule,ahalf-orfull-daymeetingoftheExecutiveBoardisheldonamonthlybasis.Additionalmeetingsorconferencecallsareheldasandwhennecessary.Elevenmeetingswereheldin2016.

Management contractsTherearenomanagementcontractswithintheAscomGroup.

Business relationships with closely related companies and personsNosignificantbusinesstransactionsexistwithcloselyrelatedcompaniesorpersons.

5. COMPENSATION, SHAREHOLDINGS AND LOANS

Alldetailsofcompensation,shareholdingsand loansarelistedintheRemunerationReportonpages27to41tothisAnnualReport.

6. SHAREHOLDERS’ PARTICIPATION RIGHTS

Voting rights and protective rights Shareholders in Swiss public listed companies haveextensiveparticipationandprotectiverightsgovernedinprinciplebytheSwissCodeofObligations(OR)andsupplementedbytherespectiveCompany’sArticlesofAssociation.

Annual General Meeting

Voting rights and representation■■ Eachshareentitlestheholdertoonevoterepresent-edattheAnnualGeneralMeeting.Therearenovot-ingrightrestrictions.

■■ EachshareholdermayberepresentedattheAnnualGeneralMeetingbyathirdpersonwhoisauthorizedasproxyinwritingorbytheIndependentRepresen-tative.



According to Article 704 of the Swiss Code of Obligations, the following resolutionsof theGeneralMeetingrequireatleasttwothirdsofthevotesrepre-sentedandtheabsolutemajorityofthenominalvalueof shares represented to be passed: changing theCompany’spurpose;creatingvotingshares;changinglimitations on transferability of registered shares; anauthorizedorconditionalcapitalincrease;acapitalin-creaseoutofequity,againstassetcontributionorforthepurposeofassettakeoverandthegrantingofspe-cialbenefits;limitingorrevokingofsubscriptionrights;relocationoftheCompany’sregisteredoffice;dissolu-tionoftheCompany.

Convocation of the General Meeting The General Meeting is convened by the Board of Directorsor,ifneeded,bytheauditors.

Convocation is effected no later than 30 daysbeforethedateofthemeetingbyasingleannounce-mentintheCompany’spublicationofrecord(theSwissOfficialGazetteofCommerce–SOGC)andbylettertotheregisteredshareholders.

AgendaIn accordancewith Article 699 para. 3 of the SwissCodeofObligations,requeststoplaceanitemontheagendamustbesubmittedtotheBoardofDirectorsnolaterthan45daysbeforethedateoftheGeneralMeet-ing.ThepartysubmittingsuchrequestmustrepresentsharesofatleastCHF100,000parvalue.

Theinvitationtosubmitagendaitemsispublishedinasingleannouncement in theCompany’spublica-tionorgan(theSOGC).

Registration in the share registerAll shareholders recorded in the share register as voting shareholders 10 days before the date of theGeneralMeetingareadmittedtothemeetinganden-titledtovote.

The Board of Directors is empowered to strike entriesfromtheshareregisterwithretroactiveeffect totheregistrationdateif,afterconsultingthepartiesinvolved, it determines that such entries have beenmade based on false information on the part of the acquirer.

ShareholderswhodisposeoftheirsharesbeforetheGeneralMeetingarenolongerentitledtovote.

7. CHANGE OF CONTROL AND DEFENSIVE MEASURES

Obligation to submit a purchase offerTheArticlesofAssociationofAscomHoldingAGcon-tain neither an opting-out nor an opting-up clause (Article125FinancialMarketInfrastructureAct(FMIA)).Any party who acquires one-third (331/3%) of share

capital inAscomHoldingAGisobligedunderArticle135FMIAtosubmitapublicpurchaseofferforthere-mainingshares.

Change of control clausesContractsofemploymentwithmembersoftheExecu-tiveBoard,othermembersoftheExecutiveCommitteeorothermembersoftheseniormanagementprovidefornospecialseverancepayment.

TheperiodofnoticeformembersoftheExecutiveBoardismaximal12months.

IntheeventofatakeoverandadelistingoftheCompany,theparticipantsoftheAscomsharematch-ingplansshallreceivethesamenumberofmatchingsharesastheyhold investmentsharesat thedateofthepublicationofthedelisting.

8. AUDITORS

AuditorsThe auditors are appointed by the Annual GeneralMeeting for a term of one year. Pricewaterhouse-CoopersAG,Zurich(formerlySTG-Coopers & LybrandLtd),haveactedasauditorssince1987.AccordingtotheSwissCodeofObligations,theleadauditorhastoberotatedatleasteverysevenyears.ThomasWallmerisauditor-in-chargesince2015.

Auditing feePricewaterhouseCoopersAGwaspaidcompensationofCHF549,700(previousyear:CHF681,400)forser-vicesinconnectionwithauditingtheannualfinancialstatementsofAscomHoldingAGandtheGroupcom-paniesaswellastheconsolidatedstatementsof theAscomGroupfortheyearended31December2016.

Additional feesPricewaterhouseCoopers AGwas paid the followingadditionalfeesin2016:

Taxconsulting CHF 21,000(previousyear:CHF 17,000)

Miscellaneous CHF119,900(previousyear:CHF 147,000)

Total CHF 140,900(previousyear:CHF 164,000)

The level of the non-audit fees of Pricewaterhouse-CoopersAGamountingtoCHF140,900correspondsto25.6%ofthetotalauditfeesofCHF549.700.

Monitoring and control instrumentsAs a committeeof theBoard ofDirectors, theAuditCommitteeevaluatestheperformance,feesandinde-pendenceoftheexternalauditorseachyear.

The external auditors prepare a detailed audit reportatleastonceayearandreportindetailtotheAuditCommittee.Themainfindingsandrecommenda-



■■ Adhocmediaconferencesandanalystcalls■■ Analyst & InvestorDay■■ AnnualGeneralMeetingofShareholders■■ Roadshowsforinstitutionalinvestors

Media releasesIn accordance with the provisions of the SIX Swiss Exchange,Ascompublishesinformationonanadhocand regular basis. Furthermore, Ascom publishes Ascommediareleasesonsignificantbusinessactivi-tiesandonimportantproductandserviceinnovations.

Online communicationThewebsitewww.ascom.comprovidesacomprehen-siveoverviewof theCompany’sstructureandactivi-tiesandtheofferingsoftheindividualbusinessunits.

All media releases and presentations at mediaconferencescanbedownloadedfromthewebsiteathttp://www.ascom.com/en/index/latest-news-corporate.htm and http://www.ascom.com/en/index/investor-relations/ir-reports-presentations.htm.Mediareleasesmayalsobereceivedbye-mailbysubscribingtotheNewsServiceonthewebsite.

TheArticlesofAssociationofAscomHoldingAG,theOrganization Regulations, a current extract fromtheCommercialRegister, theCodeofBusinessCon-ductandtheshareregistrationguidelinescanalsobedownloaded from the website under “CorporateGovernance”(http://www.ascom.com/en/index/corpo-rate-governance/articles-of-association.htm).Themin-utesofpastAnnualGeneralMeetingsareavailableathttp://www.ascom.com/en/index/investor-relations/financial-calendar/annual-general-meeting.htm.

Implementation of publication requirements under stock exchange regulationsTheBoardofDirectorshasissuedanAnnextotheOr-ganizationRegulationsentitled“CorporatePolicyandProcedureonInsiderTrading”,whichinparticularpro-hibits Ascom employees and governing bodies of Ascomfromengagingin insidertrading.Anabsolutebanontradingappliesduringaperiodoffourweekspriortothepublicationoftheannualresultsandhalf-yearresults.

Informationonmanagementtransactionsispub-lished at https://www.six-exchange-regulation.com/en/home/publications/management-transactions.html.Detailed information on disclosure announcementscan be viewed at https://www.six-exchange-regula-tion.com/en/home/publications/significant-sharehold-ers.html.

Dates and contactsAlistofimportantdatesin2017andCorporateCom-munications and Investor Relations contacts is pro-videdonpage93ofthisAnnualReport.

tions contained in the audit reports of the external auditorsarethendiscussedindetailwiththeCFO.

In2016,theexternalauditorsdrewuptwodetailed managementreports(fortheHalf-YearReportandtheAnnualReport).TheexternalauditorsattendedfiveoftheAuditCommitteemeetingsheldin2016.

Each year, the Board of Directors reviews the selectionofauditorsinordertoproposethemtoshare-holdersforappointmentattheAnnualGeneralMeet-ing.Theaimistoensurethegeneralindependenceoftheauditorsaswellasthepersonalindependenceoftheauditor-in-chargeanddeterminetheirunderstand-ingofAscom’sbusinessactivitiesandthespecificbusi-nessrisksrelevantforAscom,thenatureofcollabora-tion between the external auditors and the AuditCommittee, and the manner in which support isprovidedforimplementationofthelegalprovisionsaswellas requirements fromregulationandaccountingstandards(SwissGAAPFER).

TheAuditCommitteeassessestheeffectivenessoftheauditorsincompliancewiththelegalprovisionsinSwitzerland.TheBoardofDirectorsbasestherota-tion cycle for the auditor-in-charge on the relevantprovisionsoftheSwissCodeofObligations,accordingtowhichtheauditor-in-chargemayperformthisman-datefornomorethansevenyears.

TheAuditCommitteealsoexaminestheratiobe-tweenthefeefortheannualauditandfeesforaddi-tionalservicesperformedbytheauditors,inordertoensurethattheauditors’independenceisnotimpaired.Forthe2016reportingyear,theBoardofDirectorscon-cluded that theauditors’ independencewas fullyas-sured.

9. INFORMATION POLICY

TheBoardofDirectorsandtheExecutiveBoardhaveundertakentoaligntheirorganizationalstructurewiththelatestcorporategovernancestandards.

Ascom’s informationpolicy isbasedoncommit-menttoahighdegreeoftransparencyandequaltreat-mentofallstakeholdergroups.CorporateCommunica-tionscomeundertheremitoftheCompanySecretary.Ascomprovidesawiderangeofcommunicationtoolstokeepitsshareholders,themedia,analystsandotherstakeholdergroupsinformed:

Publications■■ AnnualReport■■ Half-YearReport■■ TheofficialpublicationorganistheSwissOfficialGazetteofCommerce(SOGC)(www.shab.ch)

Events■■ AnnualMediaConferenceandHalf-YearMedia Conferenceformediarepresentativesandanalysts


27ASCOM ANNUAL REPORT 2016 REMUNERATION REPORT

NotePricewaterhouseCoopers AG as statutory auditors have audited the Remuneration ReportaccordingtoClause17oftheOrdinanceagainstExcessiveCompensation(“OaEC”).Theauditwas limited to the informationcontained in thesections II/1 lit.a, II/2 (Table “Compensation ExecutiveBoard2016”),II/2lit.gandII/2lit.h;allmarkedas“auditedinformation”.

I. ASCOM REMUNERATION POLICY

1. Corporate Governance as basis of the remuneration policy

RemunerationisapartofCorporateGovernance(seealsop.12to26oftheAnnualReport)andCorporateGovernanceisakeytopicforAscom.BoththeBoardofDirectorsandManagementarecommittedtogoodCorporateGovernanceinordertoensuresustainabledevelopmentoftheCompany.AccordingtotheArticlesofAssociation,itisamajortaskoftheCompensationCommitteetopreparetheresolutionoftheBoardofDirectorsconcerningthecompensationofthemembersoftheBoardofDirectorsandthemembersoftheExecutiveBoardtobeap-provedbytheAnnualGeneralMeeting.

Basic rules and regulations to be followed are set out in:■■ SwissCodeofObligations■■ OrdinanceagainstExcessiveCompensationwithrespecttostockexchangelistedcompa-nies(“OaEC”)

■■ ListingRulesofSIXSwissExchange■■ ArticlesofAssociationofAscomHoldingAG(dated15April2015)■■ OrganizationalRegulationsofAscomHoldingAG(dated15April2015)■■ AscomCodeofEthicalBusinessConduct(dated15February2012)■■ SwissCodeofBestPracticeforCorporateGovernance

TheArticlesofAssociationandtheOrganizationalRegulationsofAscomHoldingAGareavail-ableontheCompanywebsite:www.ascom.com/corp/corporate-governance/directives-and-guidelines.html

2. Remuneration principles for the Board of Directors

a) Legal backgroundAccordingtoArticle20boftheArticlesofAssociation,thecompensationofthemembersoftheBoardofDirectorsshallbeadequate,competitiveandperformance-orientedandshallbesetinlinewiththeoperativeandstrategicgoals,thesuccessoftheCompany,aswellasthelong-terminterestsoftheshareholders.

b) Compensation structureMembersoftheBoardofDirectorsreceiveafeeinaccordancewiththeRemunerationRegula-tions(AnnextotheOrganizationRegulations).ThemembersoftheBoardofDirectorsreceiveafixedfeewithoutavariablecomponent,andthisfeeispaidincash.Nootherremunerationispaid.MembersoftheBoardofDirectorsreceivenoseverancepayment.

ThefeesformembersoftheBoardofDirectorsarereviewedonanannualbasisandaresetbythefullBoardofDirectorssubjecttotheapprovaloftheAnnualGeneralMeeting.Theassessmentofthefeesisbasedonexternal(e.g.benchmarktootherinternationalstock-listedtechnologycompanieswithsimilarmarketcapitalization)andinternalcriteria (e.g.workload,requestofavailability).Committeework,additionalmeetingsorspecialprojectsarenotcom-pensatedwithanadditionalfeeandnoattendancefeesarepaidouteither.

Remuneration Report


28 ASCOM ANNUAL REPORT 2016 REMUNERATION REPORT

AccordingtoArticle20eoftheArticlesofAssociation,expenserecoveryisnocompensa-tion. The Company reimburses the members of the Board of Directors for all necessary expense,alsoinformoflumpsumexpenserecoverieswithintheamountacceptedbythetaxauthorities.

In2016,themandateoftheChairmancorrespondedtoabout40%ofhisworkingtime,andthemandateoftheBoardmemberstoabout10%oftheirworkingtime.

c) Board feesThefeesforthemembersoftheBoardremainedunchangedsince1January2011.Anordinarymemberof theBoardofDirectors receivesanannualgross remunerationofCHF 120,000,whiletheChairmaniscompensatedwithagrossremunerationofCHF300,000perannum.

TheBoardofDirectorsdecidedtoreducetheBoardfeesasoftheAnnualGeneralMeeting2017:■■ ChairmanoftheBoard: AnnualgrossremunerationofCHF200,000■■ MemberoftheBoard: AnnualgrossremunerationofCHF100,000

Inaddition,allBoardmembersareencouragedtoholdAscomshareswiththevalueoftheBoardcompensationofoneyear.

d) Mandates outside the Ascom GroupArticle20doftheArticlesofAssociationdefinesthemandatesoutsidetheAscomGroup:

■■ MembersoftheBoardofDirectorsmayoccupyorexercisefouradditionalpositionsagainstcompensationinthehighestmanagingorsupervisingbodyofotherentitiesthatareobligedtobeenteredintothecommercialregisteroracomparableforeignregisterandthatarenei-thercontrolledbynorthatcontroltheCompany.

■■ Inaddition,membersoftheBoardofDirectorsmayoccupyorexercisefiveuncompensatedpositionsinthehighestmanagingorsupervisingbodyofsuchentities,wherebyexpenserecoveryisnocompensation.


■■ Inadditiontothesemandates,membersoftheBoardofDirectorsmayoccupyorexercisenotmorethanfivepositionsinseveraldifferentcompaniesthatformthesamegroupofcom-paniesorpositionsthatareheldbasedontheInstructionsoftheCompany.

ThemembersoftheBoardofDirectorscomplywiththisregulation.ThemandatesoutsidetheAscomGrouparelistedintheCorporateGovernancepart(p. 20).

3. Remuneration principles for the Executive Board

a) Legal backgroundAccordingtoArticle20boftheArticlesofAssociation,thecompensationofthemembersoftheExecutiveBoardshallbeadequate,competitiveandperformance-orientedandshallbesetinlinewiththeoperativeandstrategicgoals,thesuccessoftheCompany,aswellasthelong-terminterestsoftheshareholders.

TheCompanymaypaytothemembersoftheExecutiveBoardinadditiontoafixedcom-pensationaperformance-relatedcompensationincash.TheamountofsuchcompensationisdependentonthequalitativeandquantitativegoalsandparametersdeterminedbytheBoardofDirectors,inparticulartheoverallresultoftheCompanyandtheindividualcontributionoftherespectivemember.

The amount of the performance-related compensation of amember of the ExecutiveBoard(excludinganypossibleallocationofequitysecurities,conversionrights,optionrightsorotherrightswithequitysecuritiesasunderlying)cannotexceedthefixedcompensationofsuchmember.



AccordingtoArticle20bSection3oftheArticlesofAssociation,theCompanymayalsoallocate,besideacashcompensation,equity securities, conversion rights,option rightsorotherrightswithequitysecuritiesasunderlyingtothemembersoftheExecutiveBoardaspartoftheirtotalcompensation(“long-termincentive”).Incaseofanallocationofequitysecurities,conversionrights,optionrightsorotherrightswithequitysecuritiesasunderlying,theamountofthecompensationisequaltothevalueofthesecuritiesor,respectively,therightsallocated,determinedasatthetimeoftheallocation(grant)inaccordancewiththeaccountingstandardsappliedbytheCompanyforitsconsolidatedaccounts.Thetotalvalueofthelong-termincen-tiveforamemberoftheExecutiveBoardcannotexceed50%ofhisfixedcompensation.

b) Appointment of members of the Executive BoardAsmembersoftheExecutiveBoardareconsideredtheCEOandeachfurtherpersonwhoisexplicitlyappointedassuchbytheBoardofDirectors.

Asof31December2016,theExecutiveBoardconsistedoffourmembers:CEO(changeasof1June2016),CFO,COO(GeneralManagerWirelessSolutionsDivisionuntil30September2016),andHeadofMarketing & BusinessDevelopment.TheformerCEOlefttheCompanyasof31May2016,anddueto thesaleof theNetworkTestingDivision, theGeneralManagerNetworkTestinglefttheCompanyasof30September2016.

c) Determination of the remuneration of the Executive Board membersTheremunerationpackageofthemembersoftheExecutiveBoardconsistsofthreeparts:

■■ Base salary (fixed compensation in cash) including social benefits: according to marketbenchmarksofthepeergroup(otherinternationalstock-listedtechnologycompanieswithsimilarmarketcapitalization)

■■ Performance-related variable compensation(incash):dependentonthequantitativegoalsandparameterssuchasnetrevenue,EBITDA,NWCasdeterminedbytheBoardofDirectors.ThegoalsshallbeinlinewiththeyearlybudgetsoftheCompany.Performance-relatedvari-ablecompensationcannotexceedthefixedcompensation.

■■ Long-term incentive (share matching plan):TheBoardofDirectorsdecidedtointroduceasharematchingplanasa long-term incentive insteadofoptions.The long-term incentiveconsistsofaretentionpartandaperformance-relatedpart.Duringadefinedsubscriptionperiod,themembersoftheExecutiveBoardasbeneficiarieshavetheopportunitytobuyCompanysharesatmarketpriceasinvestmentsharesuptoacertainnumberofsharesasdeterminedbytheBoardofDirectors.TheCompanywillmatchtheinvestmentshareswithadditionalsharesbasedonthefulfillmentofdefinedemployment-basedandperformance-basedcriteria.Beneficiarieshavetokeeptheinvestmentsharesforaperiodofthreeyearsinordertobenefitfromtheplan.Thebeneficiariesreceiveacertainpercentageofthenum-beroftheirinvestmentsharesasmatchingsharesafterathree-yearvestingperiodforfree(“retentionpart”),iftheiremploymentcontractwithAscomhasnotbeenterminatedatthispointoftime.Moreover,thebeneficiariesmayget–uptoacertainpercentageofthenumberof their investment shares–matchingshares inaddition,provided thatdefinedmid-termprofitabilitytargetsareachieved(“performance-relatedpart”).Asamaximum,theCompanywillhonoreachinvestmentsharewithonematchingshare.

AccordingtoArticle20eoftheArticlesofAssociation,expenserecoveryisnocompensation.TheCompanyreimbursesthemembersoftheExecutiveBoardforallnecessaryexpense,alsoinformofcarallowancesandotherlumpsumexpenserecoverieswithintheamountacceptedbythetaxauthorities.



d) System of CEO Compensation

Salary part Target salary CEO

Long-termincentive(sharematchingplan) Opportunitytoinvestinvestmentshares uptoamaximumofCHF325,000

Variablecompensation(performance-related) Minimalvariablesalary:CHF0Targetvariablesalary:CHF325,000

Maximalvariablesalary:CHF650,000

Fixedcompensation(basesalary) CHF650,000

e) Number of external mandates and functionsArticle20doftheArticlesofAssociationdefinethemandatesoutsidetheAscomGroup:

■■ MembersoftheExecutiveBoardmayoccupyorexercise–subjecttotheapprovaloftheBoardofDirectors–oneadditionalpositionagainstcompensationinthehighestmanagingorsuper-visingbodyofotherentitiesthatareobligedtobeenteredintothecommercialregisteroracomparableforeignregisterandthatareneithercontrolledbynorthatcontroltheCompany.

■■ Inaddition,membersoftheExecutiveBoardmayoccupyorexercisethreeuncompensatedpositions in thehighestmanagingor supervisingbodyof suchentities,wherebyexpense recoveryisnocompensation.

■■ Inadditiontothesemandates,membersoftheExecutiveBoardmayoccupyorexercisenotmorethanfivepositionsinseveraldifferentcompaniesthatformthesamegroupofcompaniesorpositionsthatareheldbasedontheInstructionsoftheCompany.

ThemembersoftheExecutiveBoardcomplywiththisregulation.ThemandatesoutsidetheAscomGrouparelistedintheCorporateGovernancepart(p.22).

f) Employment agreements with members of the Executive BoardAccordingtoArticle20coftheArticlesofAssociation,employmentagreementswithmembersoftheExecutiveBoardthatformthebasisofthecompensationfortherespectivemembersareenteredintoforafixedtermofnotmorethanoneyearoranindefinitetermwithaterminationperiodofnotmorethantwelvemonthsaspertheendofeachcalendarmonth.

AllmembersoftheExecutiveBoardcomplywiththisregulation.

g) Pension paymentsAccordingtoArticle20coftheArticlesofAssociation,themembersoftheExecutiveBoardreceive pension payments from the occupational pension scheme in accordancewith thedomesticor foreignoccupationalwelfare laworpensionregulationsapplicabletothem, in-cludingpossiblesupplementarybenefits.

PensionpaymentsoutsidetheoccupationalpensionschemetoamemberoftheExecu-tiveBoardbytheCompany,anaffiliateoftheCompanyoranythirdpartyareadmissibletotheextentofnotmorethan25%oftheannualtotalcompensationofthepersonconcerned,asfarastherespectivepersonisnotaffiliatedtoaSwissorforeignbenefitinstitution.



4. Approval Mechanism

a) Statutory approval mechanismAccordingtoArticle20eoftheArticlesofAssociation,theGeneralMeetingvotesannually,separatelyandinabindingmanneronthemaximumtotalamountsproposedbytheBoardofDirectorsfor:

■■ Thecompensationof theBoardofDirectors for theyearofofficefollowingtheordinaryGeneralMeetinguntilthenextordinaryGeneralMeeting

■■ ThefixedcompensationoftheExecutiveBoardforthenextfiscalyear(1January–31De-cember)followingtheordinaryGeneralMeeting

■■ ThevariableandothercompensationoftheExecutiveBoard(includingtheallocationofequitysecurities,conversionrights,optionrightsorotherrightswithequitysecuritiesasunderlying)forthesameapprovalperiod

Inaddition, theBoardofDirectors submits the remuneration report for thebusinessyearpriortotheAnnualGeneralMeetingforaconsultativevote.

AsfarasatotalamountapprovedforthecompensationoftheExecutiveBoardisinsufficienttocompensatemembersoftheExecutiveBoardappointedorpromotedwithintheExecutiveBoardaftertherespectiveresolutionoftheGeneralMeetinguntilthebeginningofthefollow-ingApprovalPeriod,theCompanymayuseanadditionalamountpursuanttoArticle19OaECinadditionto thepreviouslyapprovedtotalcompensation for theExecutiveBoard for therespectiveApprovalPeriod.Suchanadditionalamountisonlyavailablewithinthefollowinglimits:fortheCEOanamountwhichisnotmorethan20%higherthanthecompensationofitspredecessorandforamemberoftheExecutiveBoardanamountwhichisnotmorethan20%higherthantheamountavailableonaverageformembersoftheExecutiveBoard(excl.theCEO) for theApprovalPeriod.TheGeneralMeetingdoesnotvoteontheusedadditionalamount.

AccordingtoArticle20eoftheArticlesofAssociation,theCompanyisentitledtocompensaterecoverableclaims,whichanewlyappointedmemberoftheBoardofDirectorsormemberoftheExecutiveBoardwouldhavehadtowardshisorherpreviousemployerorprincipal,ifthismemberhadnotchangedthecompany.Therecoverabilityoftheclaimshastobeexam-inedbyanindependentexpert.

Ascom Compensation Approval Mechanism

Compensation for the Board of Directors

Compensation for the Executive Board

FixedcompensationfortheBoard ofDirectorsuntilnextyear’sAGM

FixedcompensationfortheExecu-tiveBoardforthefiscalyear2018

Performance-basedcompensationbasedontherealizedperformanceofthefiscalyear2018

“MaximumTotal CompensationBudget” forfixedcompensation oftheBoardofDirectors

“MaximumTotal CompensationBudget” forfixedcompensation andperformance-based compensationbased onrealizedperformance aswellasforthelong- termincentive(LTI)

Prospective binding voteConsultative vote about remuneration report 2016

AGM 2017April 2017

AGM 2018 April 2018

1.1.2017 1.1.2018 1.1.2019



b) Level of decision authority

Type of compensation Compensation Committee Full Board of Directors Annual General Meeting

Compensation Board of Directors

MaximumcompensationfortheBoardofDirectors fortheperioduntilthenextAnnualGeneralMeeting

Recommendation ProposaltotheAnnualGeneralMeeting 1

Approval

Individualcompensationforthemembers oftheBoardofDirectorsinthereportingyear

Proposal Approval 1 –

Compensation Executive Board

Maximumcompensationforthemembers oftheExecutiveBoard(fixedcompensation, variablecompensation,long-termincentive)for thefiscalyearfollowingtheAnnualGeneralMeeting

Recommendation ProposaltotheAnnualGeneralMeeting

Approval

IndividualcompensationfortheCEO (fixedcompensation,variablecompensation, long-termincentive)inthereportingyear

Review, recommendation

Approval –

Individualcompensation(fixedcompensation,variable compensation,long-termincentive)forthemembers oftheExecutiveBoard(withoutCEO)inthereportingyear

Reviewattherequest oftheCEO,

recommendation

Approval –

1 InanycaseofpotentialconflictofinteresttherespectivememberoftheBoardofDirectorsshallabstainfromvoting.

c) Approvals of the Annual General Meeting 2016TheshareholdersapprovedthefollowingmaximumamountsforfuturecompensationsattheAnnualGeneralMeeting2016:

■■ BoardofDirectors:maximalamountofCHF1,020,000fortheperiodfromtheAnnualGen-eralMeeting2016until theAnnualGeneralMeeting2017 (subject toadditionalemployercontributions togovernmental social insurances to theextent theyconstituteor increasepensionbenefitsforthebeneficiaries).

■■ ExecutiveBoard(forfivemembers)forthebusinessyear2017: –MaximalamountofCHF2,500,000asfixedcompensation(includingcontributionstopen-

sionfundsandothersocialbenefitsandsubjecttoadditionalemployercontributionstogovernmentalsocialinsurancestotheextenttheyconstituteorincreasepensionbenefitsforthebeneficiaries).

–MaximalamountofCHF1,900,000asvariablecompensation –MaximalamountofCHF900,000aslong-termincentive



II. REMUNERATION IN FISCAL YEAR 2016

1. Board of Directors

a) Remuneration in fiscal year 2016 (audited information)MembersoftheBoardofDirectorswerepaidagrossremunerationtotalingCHF985,000infiscalyear2016(2015:CHF900,000).

2016 1 Gross remuneration includ-ing employee contributions

to the Swiss social insurances

2016 Employer contributions

to the Swiss social insurances (AHV/IV/ALV)

2015 1 Gross remuneration includ-ing employee contributions

to the Swiss social insurances

2015 Employer contributions

to the Swiss social insurances (AHV/IV/ALV)

JuhaniAnttila,Chairman 300,000 17,764 300,000 17,706

DrJ.T.Bergqvist 120,000 7,470 120,000 7,500

DrHaraldDeutsch 120,000 – 120,000 –

UrsLeinhäuser 2 120,000 7,470 85,000 5,312

ChristinaStercken 120,000 – 120,000 –

AndreasUmbach 120,000 7,470 120,000 7,500

DrValentinChaperoRueda3 85,000 5,291 – –

CorneliaGehrig4 – – 35,000 2,187

Total 985,000 45,465 900,000 40,205

1IncludingemployeecontributionstotheSwisssocialinsurances(AHV/IV/ALV).2SinceAnnualGeneralMeeting2015.3SinceAnnualGeneralMeeting2016.4UntilAnnualGeneralMeeting2015.

■■ AccordingtoSwiss law, theCompanypaidSwisssocial insurance (AHV/IV/ALV)employercontributionsforthemembersoftheBoard.ThesepaymentsdonotrepresentanadditionalremunerationforthemembersoftheBoardastheydoneitherconstitutenorincreaseSwisssocialinsurancepensionbenefitsduetotheactuarialcap.

■■ NomemberoftheBoardofDirectorsreceivedanyadditionalremunerationasdefinedbyArt.663bbisoftheSwissCodeofObligations.

■■ NoremunerationwasmadetopartiescloselyrelatedtotheBoardofDirectors.■■ NomembersoftheBoardofDirectorsorcloselyrelatedpartiesweregrantedanyloansbytheCompanynordosuchloansexist.

b) Compliance with the decisions of the Annual General Meeting 2015According to thepreviousArticlesofAssociation, theshareholdersapproved the followingmaximumamountsforfuturecompensationsattheAnnualGeneralMeeting2015:CHF900,000 fortheBoardofDirectorsfortheperiodfromtheAnnualGeneralMeeting2015untiltheAnnual GeneralMeeting2016.

TheremunerationamountingtoCHF900,000paidtothemembersoftheBoardofDirec-torsintheperiodbetweentheAnnualGeneralMeeting2015andtheAnnualGeneralMeeting2016isinlinewiththeapprovaloftheAnnualGeneralMeeting2015.

2. Executive Board

a) Members of the Executive BoardIn2016,theExecutiveBoardconsistedofthefollowingmembers:

■■ HolgerCordes,CEO(since1June2016)■■ BiankaWilson,CFO■■ ClaesÖdman,COO(GeneralManagerWirelessSolutionsuntil30September2016)■■ FrancisSchmeer,HeadofMarketing&BusinessDevelopment■■ FritzMumenthaler,CEO(until31May2016)■■ RikardLundqvist,GeneralManagerNetworkTesting(until30September2016)



Compensation Executive Board 2016 (audited information)

in CHF Basic salary Variable salary component

Miscellaneous Pension contributions

LTI 6 Total

CEO(since1.6.2016) 379,1691 189,5831 31,0455 36,608 293,551 929,956

CFO 325,0001 63,1801 – 36,882 72,860 497,922

COO(formerGMWirelessSolutions) 290,8082 19,542 1,1194 86,582 – 398,051

HeadofMarketing & Business Development

320,0001 62,2081 – 32,653 – 414,861

FormerCEO–incharge(until31.5.2016)–periodafterresignation(1.6.–31.12.2016)

270,8331

379,169167,7081

94,7921––

37,52952,539

–53,7157

376,070580,215

FormerGMNetworkTesting (until30.9.2016)

277,8773 62,556 15,2304 10,491 – 366,154

Total Executive Board in 2016 2,242,856 559,569 47,394 293,284 420,126 3,563,229

1 IncludingthestatutoryemployeecontributionspaidtotheSwisssocialinsurance.2=SEK2,520,000.3 =USD280,769.4Contributionstomedicalbenefitplans.5Accommodationallowance.6Weightedaveragefairvalueofthematchingsharesatgrant(1investmentshare=CHF16.123).7 Compensationaccordingtoemploymentcontract.

Compensation Executive Board 2015 (audited information)

in CHF Basic salary Variable salary component

Miscellaneous Pension contributions

LTI 6 Total

CEO 650,0001 164,1251 3,1804 88,672 276,534 1,182,511

CFO 325,0001 65,6501 – 37,036 – 427,686

GMWirelessSolutions 276,0002 93,840 1,1154 82,190 – 453,145

GMNetworkTesting 352,5903 9,167 84,1515 10,239 112,227 568,374

HeadofStrategy & Business Development

320,0001 64,6401 – 30,176 8,449 423,265

Total Executive Board in 2015 1,923,590 397,422 88,446 248,313 397,210 3,054,982

1 IncludingthestatutoryemployercontributionspaidtotheSwisssocialinsurance.2=SEK2,400,000.3 =USD365,000.4Contributionstomedicalbenefitplansandspecialpremiums.5Contributionstomedicalbenefitplansandpayoutofholidayaccruals.6Weightedaveragefairvalueofthematchingsharesatgrant(1investmentshare=CHF15.363).

AccordingtoSwisslaw,theCompanypaidthefollowingSwisssocialinsurance(AHV/IV/ALV)employercontributionsforthemembersoftheExecutiveBoard:

in CHF Employer contributions to the Swiss social insurances

(AHV/IV/ALV)

2016 2015

CEO(since1June2016) 23,594 –

CFO 24,084 23,383

COO(formerGMWirelessSolutions) - -

HeadofMarketing&BusinessDevelopment 22,526 21,548

FormerCEO–incharge(until31.5.2016)–periodafterresignation(1.6.–31.12.2016)

24,83935,533

63,056

FormerGMNetworkTesting(until30September2016) – –

Total 130,576 107,987

TheseSwisssocial insuranceemployercontributionsdonot representanadditional remu-nerationforthemembersoftheExecutiveBoardastheydoneitherconstitutenorincreaseSwisssocialinsurancepensionbenefitsduetotheactuarialcap.



TheCompanypaidfortheCOO(formerGeneralManagerWirelessSolutions)employercontributionsofCHF39,799(2015:CHF62,406)totheSwedishsocialinsurances.Thesecon-tributionsdoneitherconstitutenorincreasethepensionbenefitsoftheemployee.

b) Fixed compensationThebasicsalaries(includingsocialbenefits)paidtothemembersoftheExecutiveBoardinthe2016financialyeartotaledCHF2,242,856(2015:CHF1,923,590).AdjustedfortheamountpaidtotheformerCEOafterhisresignationfromtheExecutiveBoardasof31May2016,thetotalamountrelatedtothefixedcompensationpaidtotheactivemembersoftheExecutiveBoardin2016isCHF1,863,687.

c) Performance-related variable compensation■■ PrinciplesTargetsaredefinedatthebeginningofeachyearinalignmentwiththebudgettargetsbythefullBoardofDirectors.Ifalldefinedtargetsareachievedinfull,therespectivememberoftheExecutiveBoardreceivesapredeterminedpercentageofhisbasicsalaryasavariablecom-ponent(performance-relatedpart).Iftheresultsfallshort,novariablesalarycomponentispaid.

TheCEOreceivesavariablesalarycomponentof50%ofhisbasicsalaryonfullyachiev-ingalltargets.Incaseswherethetargetssetareexceeded,theCEOispaidahighervariablesalarycomponent(performance-relatedpart)upto100%ofhisbasicsalary.

TheothermembersoftheExecutiveBoardreceiveavariablesalarycomponentof40%oftheirbasicsalaryonfullyachievingalltargets.Incaseswherethetargetssetareexceeded,theGeneralManagersarepaidavariablesalarycomponent(performance-relatedpart)uptoamaximumof80%oftheirbasicsalaries.

Performance-relatedvariablecompensationcannotexceedthefixedcompensationofamemberoftheExecutiveBoard.

■■ Performance-related targets 2016TheBoardofDirectorssettheperformancetargetsfor2016withtheaimtoincentivizeprofit-ablegrowthoftheGroupandtoassurefinancialstability.

Theperformance-relatedvariablecompensationfortheCEO,theCFO,andtheHeadofMarketing&BusinessDevelopment in2016was linkedtotheachievementof thefollowingmeasurablequantitativetargets(incl.weighting):

■■ Netrevenue:30%■■ EBITDA:40%■■ Networkingcapital:30%

InagreementwiththeBudget2016,thetargetsweredefinedasfollows(adjustedforthesaleofNetworkTesting):

■■ NetrevenueGroup:CHF348.4million■■ EBITDAGroup:CHF29.3million■■ NetworkingcapitalGroup:16.9%

TheCFOandtheHeadofMarketing&BusinessDevelopmentoverallachieved48.4%oftheperformance-relatedtargetpotentialsetfor2016.Thus,theCFOreceivesaperformance-re-latedvariablecompensationofCHF63,180andtheHeadofMarketing&BusinessDevelop-mentaperformance-relatedvariablecompensationofCHF62,208,forbothcorrespondingto19.4%oftheirbasicsalary.

Theperformance-relatedvariablecompensationfortheCOO(formerDivisionalGeneralMan-agerWirelessSolutions)for2016waslinkedtotheachievementofthefollowingmeasurablequantitativetargets(incl.weighting):

■■ EBITDAGroup:20%■■ NetrevenueWirelessSolutionsDivision:45%■■ EBITDAWirelessSolutionsDivision:25%■■ NetworkingcapitalWirelessSolutionsDivision:10%



InagreementwiththeBudget2016, thetargetsweredefinedasfollows(Grouptargetsad-justedforthesaleofNetworkTesting):

■■ EBITDAGroup:CHF29.3million■■ NetrevenueWirelessSolutionsDivision:CHF326.2million■■ EBITDAWirelessSolutionsDivision:CHF50.0million■■ NetworkingcapitalWirelessSolutionsDivision:13.8%

In2016,theCOO(formerGeneralManagerWirelessSolutions)achieved16.8%ofthetargetpotentialset.Thus,hereceivesaperformance-relatedvariablecompensationofCHF19,542correspondingto6.7%ofhisbasissalary.

ThenewCEOstartingat 1 June2016 receivedaguaranteedvariablepayment for2016of CHF189,583accordingtohisemploymentcontract.

TheformerCEO(leavingasof31May2016)receivedavariablepaymentofCHF67,708forthefirstfivemonthsasactingCEOandanotherpaymentofCHF94,792forthetimeafterhisres-ignation,bothaccordingtohisemploymentcontract.TheformerGeneralManagerNetworkTesting(leavingasof30September2016)receivedavariablepaymentofCHF62,556accord-ingtohisemploymentcontract.

The variable salary component amounts to CHF 559,569 in 2016 (2015: CHF 397,422). AdjustedfortheamountpaidtotheformerCEOafterhisresignationfromtheExecutiveBoard,the total amount related to the variable compensation paid to the activemembers of the ExecutiveBoardin2016isCHF464,777.ThevariablesalarycomponentwillbepaidinApril2017,followingtheapprovalofthe2016financialstatementsattheAnnualGeneralMeeting.

In2016,thevariablesalarycomponent(performance-relatedpart)corresponds15.5%ofthebasicsalaryoftheotherthreeExecutiveBoardmembers(CFO,COO,HeadofMarketing& BusinessDevelopment)servingforthefullperiod(2015:18.3%).

d) Long-term incentiveTheBoardofDirectorsdecidedtointroducetheAscomsharematchingplan2016.Theben-eficiariesget35%ofthenumberoftheirinvestmentsharesasmatchingsharesafterathree-yearvestingperiodforfree(“retentionpart”),iftheiremploymentcontractwithAscomhasnotbeenterminatedatthatpointintime.Inaddition,thebeneficiariesmaygetupto65%ofthenumberoftheirinvestmentsharesasmatchingshares,providedthatdefinedmid-termprofit-ability targetsareachieved (“performance-relatedpart”).TheBoardofDirectors linked themid-termprofitabilitytargetstotheEBITDAmarginoftheAscomcorebusinessachievedinfiscalyear2018.Inordertoreceiveadditionalmatchingshares,theAscomcorebusinessmustachieveatleastanEBITDAmarginof15.0%in2018.Everyparticipantwillreceivethemaximumof65%ofadditionalinvestmentsharesincasethattheEBITDAmarginoftheAscomcorebusi-nessin2018amountsto19.0%orhigher.Asamaximum,theCompanywillhonoreachinvest-mentsharewithonematchingshare.

ThenewCEO (starting asof 1 June2016) invested 18,207 investment shares and theothermembersoftheExecutiveBoardintotalinvested4,519investmentshares.ThefairvalueofamatchingshareatgrantamountstoCHF16.123(weightedaveragefairvalue).Thus,thefairvalueofallmatchingsharesallocatedtotheExecutiveBoardamountstoCHF366,411whereofan amount ofCHF293,551 for thematching shares is allocated to theCEO, assuming fullachievementofallperformancetargets.

TheformerCEOreceivedacompensationofCHF53,715accordingtohisemploymentcontract.

e) Total compensation of the members of the Executive BoardThe total compensation in 2016 for all members of the Executive Board amounted to CHF3,563,229(2015:CHF3,054,982).AdjustedfortheamountpaidtotheformerCEOafterhisresignationfromtheExecutiveBoard,thetotalamountrelatedtothefixedcompensationpaidtotheactivemembersoftheExecutiveBoardin2016isCHF2,983,014.



f) Highest compensationThehighesttotalremunerationwithintheAscomGroupwaspaidtotheformerCEO(inchargeuntil 31May2016).The total remunerationpaid to the formerCEO in2016consistedofanamountofCHF376,070fortheperiodasactingCEOandofanamountofCHF580,215paidfortheperiodafterresignation(1June–31December2016).Thus,thetotalremunerationpaidtotheformerCEOamountedtoCHF956,285(2015:CHF1,182,511).

g) Additional payments (audited information)Nomembers of the ExecutiveBoard received any additional payments as definedbyArt.663bbis of theSwissCodeofObligations, norwereanypaymentsmade toparties closely relatedtotheExecutiveBoard.

TheCompanygrantednomembersoftheExecutiveBoardorcloselyrelatedpartiesanyloansnordosuchloansexist.

h) Severance payments (audited information)ContractsofemploymentwithmembersoftheExecutiveBoardprovidefornospecialsever-ancepayment.TheperiodofnoticeformembersoftheExecutiveBoardismaximal12months.

IntheeventofatakeoverandadelistingoftheCompany,theparticipantsoftheAscomsharematchingplansshallreceivethesamenumberofmatchingsharesastheyholdinvest-mentsharesatthedateofthepublicationofthedelisting.

i) Compliance with the decisions of the Annual General Meeting 2015TheshareholdersapprovedthefollowingmaximumamountsforfuturecompensationsattheAnnualGeneralMeeting2015forthethen5membersoftheExecutiveBoardforfiscalyear2016:

■■ CHF2,500,000asfixedcompensation(includingcontributionstopensionfundsandothersocialbenefits)

■■ CHF1,900,000asvariablecompensation■■ CHF900,000aslong-termincentive

AccordingtoArticle20eSection3oftheArticlesofAssociation,theCompanymayuseanadditionalamountpursuant toArticle 19OaECas faras the totalamountapproved for thecompensationoftheExecutiveBoardisinsufficienttocompensatemembersoftheExecutiveBoardappointedaftertheresolutionoftheGeneralMeetinguntilthebeginningofthefollowingApprovalPeriod.

ThenewCEOoftheAscomGroupwasappointedasof1June2016.AccordingtoArticle20eSection 3 of the Articles of Association, an additional amount, which is not more than 20%higher than thecompensationof itspredecessor,wouldbeavailable forsuchacase. InlinewiththecontractualcompensationoftheformerCEO,thisadditionalamountwouldbe CHF1,950,000inmaximum.

AccordingtoArticle20eSection5oftheArticlesofAssociation,theBoardofDirectorsisen-titledtopayouttheapprovedtotalamountsrespectivelytheadditionalamountofallkindsofadmissiblecompensation.

TheAnnualGeneralMeeting2015approvedatotalamountofCHF5,300,000forthecompen-sationoftheExecutiveBoardin2016.InspiteoftheappointmentofanewCEO,noadditionalamountaccordingtotheArticlesofAssociationhastobedecidedasthetotalcompensationpaidtotheExecutiveBoardin2016ofCHF3,562.971(includinganamountofCHF580,215paid to the former CEO after his resignation) is in line with the approved amount of CHF5,300,000bytheAnnualGeneralMeeting2015.



Reported compensation of the Executive Board during fiscal year 2016 compared to the amount approved by shareholders

In CHF Executive Board compensation earned during

FY 2016(6 members)

Maximum amount approved by shareholders

at the 2015 AGM(5 members)

Amount within the amount approved by shareholders

at the 2015 AGM and compensation ratio

Fixedcompensation (includingcontribution topensionfundsand othersocialbenefits)

2,536,1401 2,500,000 Yes(accordingtoArt.20eofthe

ArticlesofAssociation)

Variablecompensation 559,5691 1,900,000 Yes29.4%

Long-termincentive(LTI) 420,1261 900,000 Yes46.7%

Total compensation Executive Board

3,563,2291 5,300,000 Yes67,2%

1 IncludingthepaymentsmadetotheformerCEOafterhisresignation.

The corresponding reporting of the Executive Board compensation 2017 approved by the AnnualGeneralMeeting2016aswellasthereportingofthecompensationratiowillbedis-closedintheRemunerationReport2017.

3. Former members of the Executive Board

NoformermembersoftheExecutiveBoardorpartiescloselyrelatedtothemreceivedanypaymentsorloansfromtheCompanyin2016.

III. SHARE OWNERSHIP

NumberofsharesandoptionsheldinAscomHoldingAGasof31December2016:

1. Board of Directors

AllmembersoftheBoardofDirectorsandcloselyrelatedparties,intotal:143,750shares.

Shares 1

JuhaniAnttila,Chairman 80,000

DrJ.T.Bergqvist 20,000

DrValentinChaperoRueda –

DrHaraldDeutsch 2,000

UrsLeinhäuser –

ChristinaStercken –

AndreasUmbach 41,750

Total Board of Directors 143,750

1 AcquiredbytheBoardmembersfromthemarket.

NomembersoftheBoardofDirectorsorcloselyrelatedpartiesholdanyconversionoroptionrights.



2. Executive Board

AllmembersoftheExecutiveBoardandcloselyrelatedparties,intotal:25,515sharesandnooptions.

Shares 1

HolgerCordes,CEO 18,500

BiankaWilson,CFO 5,870

ClaesÖdman,COO 595

FrancisSchmeer,HeadofMarketing & BusinessDevelopment 550

Total Executive Board 25,515

1 AcquiredbythemembersoftheExecutiveBoardfromthemarket.

3. Share allotment in 2016

AccordingtotheprovisionsoftheAscomsharematchingplan2013,AscomHoldingAGallottedin201620,552sharesto11remainingparticipantsoftheAscomsharematchingplan2013.

AsaconsequenceofthedivestmentoftheNetworkTestingDivisionasof30September2016,thefollowingnumberofshareswereallocatedtoformeremployeesoftheNetworkTestingDivisionaccordingtotheprovisionsoftheAscomsharematchingplans2014and2015:

■■ 5,967sharesto9participantsoftheAscomsharematchingplan2014■■ 18,150sharesto13participantsoftheAscomsharematchingplan2015

AscomHoldingAGallottednofurthersharesin2016.

IV. LONG-TERM INCENTIVE PLANS

1. Ascom stock option plan 2012

InaccordancewiththeresolutionpassedbytheBoardofDirectorson18April2012,atotalof486,000optionswereissuedto36membersofAscom’sseniormanagementon18April2012,eachoptionentitlingtheholdertopurchaseonesharewithaparvalueofCHF0.50(cash-settledoptionsallocatedtoUSresidentsentitletheholdertoreceivethedifferencebetweenexerciseandstrikepriceincash).ThestrikepriceisCHF9.00.Theoptionshaveatermoffiveyearsandaresubjecttoafixedvestingperiodofthreeyears(oneparticipantisentitledunderthetermsofhiscontractofemploymenttoexerciseonethirdoftheoptionsafteroneyear)andanexercisehurdle(thesharepricemusthaveoutperformedtheSMIindexwithinanygiven12-monthperiod).

19,232oftheremaining59,000optionsoutstandingatthebeginningoftheyearwereexercisedin2016.Thus,39,768optionsarestilloutstanding.



2. Ascom share matching plan 2014

TheBoardofDirectorsdecidedin itsBoardMeetingof31March2014to introduceasharematchingplan2014fortheAscomseniormanagementasalong-termincentive.Thebeneficia-rieshadtheopportunitytobuyCompanysharesduringadefinedsubscriptionperiodatmarketpriceasinvestmentsharesuptoacertainnumberofsharesasdeterminedbytheBoardofDirectors.TheCompanywillmatchtheinvestmentshareswithadditionalsharesbasedonthefulfillmentofdefinedemployment-basedandperformance-basedcriteria.Beneficiarieshavetokeeptheinvestmentsharesforaperiodofthreeyearsinordertobenefitfromtheplan.Theyget35%ofthenumberoftheirinvestmentsharesasmatchingsharesafterathree-yearsvest-ingperiodforfree,iftheiremploymentcontractwithAscomhasnotbeenterminatedatthispointintime.Inaddition,thebeneficiariesmaygetupto65%ofthenumberoftheirinvestmentsharesasmatchingsharesinaddition,providedthatdefinedmid-termprofitabilitytargetsareachieved.TheBoardofDirectorslinkedthemid-termprofitabilitytargetstotheEBITDAmarginoftheAscomcorebusinessachievedinfiscalyear2016.Inordertodistributeadditionalmatch-ingshares to thebeneficiaries, theAscomcorebusinessmustachieveat leastanEBITDAmarginof15.7%in2016.Everyparticipantwillreceivethemaximumof65%ofadditionalinvest-mentsharesincasetheEBITDAmarginoftheAscomcorebusinessin2016amountsto17.2%orhigher.Asamaximum,theCompanywillhonoreachinvestmentsharewithonematchingshare.

36membersoftheAscomseniormanagementdecidedtoparticipateandtheyinvestedintotal36,427investmentshares.9participantswith5,967investmentsharesintotalquittedtheplanduetothedivestmentoftheNetworkTestingDivision.Anotherthreeparticipantswith2,185investmentsharesquittedtheplanduetothedivestmentofthebusinessunitSystems&Solutions.3,050investmentshareswereforfeitedin2016.Thus,25,225investmentsharesstillmayqualifyformatchingshares.


TheBoardofDirectorsdecidedinitsBoardMeetingof21August2015tointroduceasharematchingplan2015fortheAscomseniormanagementasalong-termincentive.Thebenefi-ciarieshadtheopportunitytobuyCompanysharesduringadefinedsubscriptionperiodatmarketpriceasinvestmentsharesuptoacertainnumberofsharesasdeterminedbytheBoardofDirectors.TheCompanywillmatchtheinvestmentshareswithadditionalsharesbasedonthe fulfillment of definedemployment-basedandperformance-based criteria. Beneficiarieshavetokeeptheinvestmentsharesforaperiodofthreeyearsinordertobenefitfromtheplan.Theyget35%ofthenumberoftheirinvestmentsharesasmatchingsharesafterathree-yearsvestingperiodforfree,iftheiremploymentcontractwithAscomhasnotbeenterminatedatthispointintime.Inaddition,thebeneficiariesmaygetupto65%ofthenumberoftheirinvest-mentsharesasmatchingsharesinaddition,providedthatdefinedmid-termprofitabilitytargetsareachieved.TheBoardofDirectorslinkedthemid-termprofitabilitytargetstotheEBITDAmarginof theAscomcorebusinessachievedinfiscalyear2017. Inordertodistributeaddi-tionalmatchingsharestothebeneficiaries,theAscomcorebusinessmustachieveatleastanEBITDAmarginof14.0%in2017.Everyparticipantwillreceivethemaximumof65%ofaddi-tional investment shares in case the EBITDAmargin of the Ascom core business in 2017amountsto18.0%orhigher.Asamaximum,theCompanywillhonoreachinvestmentsharewithonematchingshare.

42membersoftheAscomseniormanagementdecidedtoparticipateandtheyinvestedintotal60,550investmentshares.13participantswith18,150investmentsharesintotalquittedtheplanduetothedivestmentoftheNetworkTestingDivision.300investmentshareswereforfeitedin2016.Thus,42,100investmentsharesstillmayqualifyformatchingshares.




TheBoardofDirectorsdecidedinitsBoardMeetingof26August2016tointroduceasharematchingplan2016fortheAscomseniormanagementasalong-termincentive.Thebenefi-ciarieshadtheopportunitytobuyCompanysharesduringadefinedsubscriptionperiodatmarketpriceasinvestmentsharesuptoacertainnumberofsharesasdeterminedbytheBoardofDirectors.TheCompanywillmatchtheinvestmentshareswithadditionalsharesbasedonthe fulfillment of definedemployment-basedandperformance-based criteria. Beneficiarieshavetokeeptheinvestmentsharesforaperiodofthreeyearsinordertobenefitfromtheplan.Theyget35%ofthenumberoftheirinvestmentsharesasmatchingsharesafterathree-yearsvestingperiodforfree,iftheiremploymentcontractwithAscomhasnotbeenterminatedatthispointintime.Inaddition,thebeneficiariesmaygetupto65%ofthenumberoftheirinvest-mentsharesasmatchingsharesinaddition,providedthatdefinedmid-termprofitabilitytargetsareachieved.TheBoardofDirectorslinkedthemid-termprofitabilitytargetstotheEBITDAmarginoftheAscomcorebusinessachievedinfiscalyear2018.Inordertodistributeaddi-tionalmatchingsharestothebeneficiaries,theAscomcorebusinessmustachieveatleastanEBITDAmarginof15.0%in2018.Everyparticipantwillreceivethemaximumof65%ofaddi-tional investment shares in case the EBITDAmargin of the Ascom core business in 2018amountsto19.0%orhigher.Asamaximum,theCompanywillhonoreachinvestmentsharewithonematchingshare.

19membersoftheAscomseniormanagementdecidedtoparticipateandtheyinvestedintotal42,630investmentshares.1,400investmentshareswereforfeitedin2016.Thus,41,230investmentsharesstillmayqualifyformatchingshares.

5. Options held of 31 December 2016

SOP Duration in years

Strike price in CHF

Issued options

Exercised options

Expired options

Retained options

2012 5 9.00 486,000 413,232 33,000 39,768

6. Investment shares held of 31 December 2016

Share matching plan Matching date Underlying yearly result

Lower perfor - mance hurdle

(EBITDA margin)

Upper perfor - mance hurdle

(EBITDA margin)

Number of outstanding invest-

ment shares

2014 30.06.2017 2016 15.7% 17.2% 25,225

2015 30.06.2018 2017 14.0% 18.0% 42,100

2016 30.06.2019 2018 15.0% 19.0% 41,230

Asof31December2016,108,555investmentshareswereoutstanding.Eachinvestmentsharemayentitletheholdertoamaximumofonematchingshare.

The39,768sharessubjecttoexerciseofissuedandoutstandingoptionsasof31Decem-ber 2016, together with the 108,555 outstanding matching shares, correspond in total to 0.41%ofthetotalsharecapitaloftheCompany.


42 ASCOM ANNUAL REPORT 2016 REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING ON THE REMUNERATION REPORT 2015

To the General Meeting of Ascom Holding AG, Baar

Report of the statutory auditor to the General Meeting

Wehaveauditedtheinformationmarkedas“Auditedinformation”intheaccompanyingremu-nerationreportfortheyearended31December2016.

Board of Directors’ responsibilityTheBoardofDirectors is responsible for thepreparationandoverall fairpresentationof the remunerationreportinaccordancewithSwisslawandtheOrdinanceagainstExcessiveCompen-sationinStockExchangeListedCompanies(Ordinance).TheBoardofDirectorsisalsorespon-siblefordesigningtheremunerationsystemanddefiningindividualremunerationpackages.

Auditor’s responsibilityOur responsibility is to express anopinionon the accompanying remuneration report.Weconductedouraudit inaccordancewithSwissAuditingStandards.ThosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheremunerationreportcomplieswithSwisslawandarticles14–16oftheOrdinance.

Anauditinvolvesperformingprocedurestoobtainauditevidenceonthedisclosuresmadeintheremunerationreportwithregardtocompensation, loansandcredits inaccordancewitharticles14–16oftheOrdinance.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentof therisksofmaterialmisstatements in theremunerationreport,whetherduetofraudorerror.Thisauditalsoincludesevaluatingthereasonablenessofthemethodsappliedtovaluecomponentsofremuneration,aswellasassessingtheoverallpre-sentationoftheremunerationreport.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

OpinionInouropinion,theremunerationreportofAscomHoldingAGfortheyearended31Decem-ber2016complieswithSwisslawandarticles14–16oftheOrdinance.

PricewaterhouseCoopersAG

ThomasWallmer DanielWyssAuditexpert AuditexpertAuditorincharge

Zurich,27February2017


Ascom Group44 Consolidatedbalancesheet45 Consolidatedincomestatement46 Consolidatedstatementofchangesinequity47 Consolidatedstatementofcashflows48 Notestotheconsolidatedfinancialstatements76 Reportofthestatutoryauditorsontheconsolidated financialstatements80 Summaryofkeyfinancialdata

Ascom Holding AG81 Balancesheet82 Incomestatement83 Notestotheannualfinancialstatements86 Commentsonthefinancialstatements87 Proposalsfortheappropriationofretainedearnings andreservesfromcapitalcontribution201688 Reportofthestatutoryauditorsonthe financialstatements91 Keyfinancialdataonthesharecapital

Financial statements 2016

E_00_GB16_Finanzbericht_(Layout CC14) _P_-gelöst.indd 43 01.03.17 07:44

ASCOMFINANCIALSTATEMENTS2016 GROUP CONSOLIDATED BALANCE SHEET44

Consolidated balance sheet

Assets

CHFm Note 31.12.2016 31.12.2015

Cashandcashequivalents 34.3 57.4

Tradereceivables 6 65.9 101.8

Othershort-termreceivables 7 12.0 12.6

Inventoriesandworkinprogress 8 18.5 22.6

Prepaymentsandaccruedincome 14.1 10.3

Current assets 144.8 204.7

Property,plantandequipment 9 11.3 14.4

Intangibleassets 10 38.5 40.7

Financialassets 11 30.5 26.6

Non-current assets 80.3 81.7

Total assets 225.1 286.4

Liabilities and shareholders’ equity

CHFm Note 31.12.2016 31.12.2015

Borrowings 12 – 20.0

Tradepayables 20.5 29.4

Otherliabilities 13 14.7 21.1

Provisions 14 16.2 6.7

Customerprepaymentsanddeferredrevenue 16 21.2 29.4

Accruedliabilities 17 25.1 33.0

Current liabilities 97.7 139.6

Borrowings 12 10.2 0.1

Otherliabilities 3.0 0.4

Provisions 14,15,24 33.3 29.6

Non-current liabilities 46.5 30.1

Total liabilities 144.2 169.7

Sharecapital 18 18.0 18.0

Capitalreserves 15.0 14.6

Ownshares 18 (1.0) (2.3)

Retainedearnings 48.9 86.4

Shareholders’ equity 80.9 116.7

Total liabilities and shareholders’ equity 225.1 286.4

Thenotesonpages48to75areanintegralpartoftheconsolidatedfinancialstatements.


45ASCOMFINANCIALSTATEMENTS2016 GROUP CONSOLIDATED INCOME STATEMENT

Consolidated income statement

CHFm Note 2016 2015

Netrevenue 19 354.3 410.8

Costofsales 5,20 (176.8) (204.1)

Gross profit 177.5 206.7

Marketingandsales 5,20 (92.7) (98.6)

Researchanddevelopment 5,20 (40.2) (43.1)

Administration 5,20 (37.2) (31.7)

Otheroperatingincome 21 0.3 2.8

Otheroperatingexpenses 21 (6.4) (8.8)

Operating result (EBIT) 1.3 27.3

Financialincome 22 0.7 6.4

Financialexpenses 22 (3.6) (2.0)

Ordinary result (1.6) 31.7

Non-operatingresult 23 (0.6) 0.4

Extraordinaryresult 3 (145.1) –

Profit/(loss) before income tax (147.3) 32.1

Incometax 24 1.6 (7.8)

Group profit/(loss) for the period 1 (145.7) 24.3

1 Attributable to the owners of the parent.

Earnings per share in CHF

CHFm Note 2016 2015

Basic 25 (4.07) 0.69

Diluted 25 (4.06) 0.68

Additional information – non-GAAP measuresCHFm Note 2016 2015

EBITDA 4 16.9 43.8

EBITDAbeforerestructuringcosts 4 27.3 47.8



46 ASCOMFINANCIALSTATEMENTS2016 GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to owners of the parent

Capital reserves Retained earnings

CHFm Share capital 1

Own shares 1

Share premium

Other capital

reserves

Currency translation

adjustments

Goodwill offset

Other retained earnings

Total share holders’

equity

Balance at 1.1.2015 18.0 (9.2) 1.1 11.5 (3.1) (175.6) 265.2 107.9

Groupprofit/(loss)fortheperiod – – – – – – 24.3 24.3

Currencytranslationadjustments – – – – (8.6) – – (8.6)

Goodwilloffsetwithequity – – – – – – – –

Share-basedpayments – – – 0.2 – – – 0.2

Purchaseofownshares – (0.2) – – – – – (0.2)

Disposalofownshares – 7.1 – 1.8 – – – 8.9

Dividendpaid – – – – – – (15.8) (15.8)

Balance at 31.12.2015 18.0 (2.3) 1.1 13.5 (11.7) (175.6) 273.7 116.7

Groupprofit/(loss)fortheperiod – – – – – – (145.7) (145.7)

Currencytranslationadjustments – – – – 3.7 – – 3.7

Goodwilloffsetwithequity – – – – – 120.6 – 120.6

Share-basedpayments – – – 0.8 – – – 0.8

Purchaseofownshares – – – – – – – –

Disposalofownshares – 1.3 – (0.4) – – – 0.9

Dividendspaid – – – – – – (16.1) (16.1)

Balance at 31.12.2016 18.0 (1.0) 1.1 13.9 (8.0) (55.0) 111.9 80.9

1 Refer to note 18.

Non-distributablestatutoryandlegalreservesofAscomHoldingAG;CHF3.6million(previousyear:CHF3.6million).

Consolidated statement of changes in equity



47ASCOMFINANCIALSTATEMENTS2016 GROUP CONSOLIDATED STATEMENT OF CASH FLOWS

Consolidated statement of cash flows

CHFm Note 2016 2015

Groupprofit/(loss)fortheperiod (145.7) 24.3

+ Depreciationofproperty,plantandequipment 9 3.3 3.6

+ Amortizationofintangibleassets 10 12.3 12.8

+ (Profit)/lossfromimpairment/reversalofimpairment 9,10 0.3 0.4

+/−(Profit)/lossfromdivestmentofasubsidiaryorbusiness 139.8 (2.6)

+ Share-basedpayments 0.8 0.3

+/−Addition/(release)ofprovisions 14 19.0 5.6

+/−Adjustmentfornon-cashitems (5.8) (0.4)

+/−Changeininventoryandworkinprogress (1.7) (0.9)

+/−Changeintradereceivables 2.6 2.2

+/−Changeintradepayables (3.2) (1.5)

+/−Changeinotherreceivablesandprepayments (2.9) 11.3

+/−Changeinaccruedandothershort-termliabilitiesanddeferredincome (9.4) (19.2)

− Interestincome 22 (0.7) (0.2)

+ Interestexpenses 22 0.9 0.9

+ Interestreceived 0.7 0.2

− Interestpaid (0.2) (0.2)

+ Incometaxexpenses 24 (1.6) 7.8

− Incometaxpaid (3.5) (10.1)

+/−Foreigncurrencytranslationdifferencesonintra-grouppositions 1.0 (1.0)

Cash flow from operating activities 6.0 33.3

− Purchaseofproperty,plantandequipment 9 (4.0) (4.3)

+ Proceedsfromdisposalofproperty,plantandequipment 0.6 –

− Purchaseofintangibleassets 10 (14.4) (9.0)

− Acquisitionofasubsidiaryorbusiness 3 (5.8) (1.8)

+ Proceedsfromdivestmentofasubsidiaryorbusiness 21.1 0.7

+/−Changeinfinancialassetsandothernon-currentassets – 1.1

Cash flow from investing activities (2.5) (13.3)

+/−Proceedsfrom/(repaymentof)short-termborrowings (20.2) 30.0

+/−Proceedsfrom/(repaymentof)long-termborrowings 9.8 (33.0)

+ Proceedsfromdisposalofownshares 0.9 8.9

− Purchaseofownshares 18 – (0.2)

− Dividendspaid (16.1) (15.8)

Cash flow from financing activities (25.6) (10.1)

+/−Foreigncurrencytranslationdifferencesoncashandcashequivalents (1.0) (2.7)

Increase/(decrease) in cash and cash equivalents (23.1) 7.2

+ Cashandcashequivalentsat1.1. 57.4 50.2

Cash and cash equivalents at 31.12. 34.3 57.4



48 ASCOMFINANCIALSTATEMENTS2016 GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Ascomisaglobalsolutionsproviderofmobileworkflowsolutions,mission-critical,real-timeICTsolutionsforhighlymobile,adhoc,andtime-sensitiveenvironmentsinhealthcare,industry,securityandretailsectors. Until30September2016,theGroupwasactiveintwobusinessesoperatedwithintwodivisions,WirelessSolutionsandNetworkTesting.Effective30September2016,AscomdivestedtheNetworkTestingDivision,exitingthemobilenetworktestingbusi-ness.ThecontinuingbusinesscomprisesthebusinessunitpreviouslyreferredtoastheWire-lessSolutionsDivision.

AscomisheadquarteredinBaar(Switzerland),hassubsidiariesin15countriesandemploysaround1,200peopleworldwide.AscomHoldingAG,theparentcompanyoftheGroup,isapubliclimitedcompanyanditsregisteredshares(symbolASCN)arelistedontheSIXSwissExchangeinZurich(Switzerland).

2. SUMMARY OF THE GENERAL GROUP ACCOUNTING POLICIES

2.1 Basis of preparationTheconsolidatedfinancialstatementsofAscomHoldingAGcomplywithSwisslawandhavebeenpreparedbasedontheindividualfinancialstatementsofeachGroupcompany.Theseare basedon historical cost, except as disclosed in the accounting policies below, and in accordance with the entire existing guidelines of Swiss GAAP FER (Generally Accepted AccountingPrinciplesFER/FER=FachempfehlungzurRechnungslegung=Accountingandreportingrecommendations).Furthermore,theconsolidatedfinancialstatementscomplywiththeprovisionsofthelistingrulesoftheSIXSwissExchangeandarepresentedinSwissfrancs(CHF).TheaccountingpolicieshavebeenappliedconsistentlybyGroupcompanies.Asum-maryofthesignificantaccountingpoliciesisprovidedbelow.TheclosingdatefortheGroupandtheindividualGroupcompaniesis31December.

2.2 Changes in accounting policy and disclosuresAscomearlyadoptedallSwissGAAPFERstandardschanges,whichwerepublishedbytheendof2015,includingstandardschangeswhichwerebindingafter31December2015,andwhereearlyadoptionwaspermitted.Therewerenoadditionalchangesin2016.

2.3 Use of judgments and estimatesInpreparingtheseconsolidatedfinancialstatements,managementhasmadejudgments,esti-matesandassumptionsthataffecttheapplicationoftheGroup’saccountingpoliciesandthereportedamountsofassets, liabilities, incomeandexpenses.Actualresultsmaydifferfromtheseestimates.Estimatesandunderlyingassumptionsare reviewedonanongoingbasis.Revisionstoestimatesarerecognizedprospectively.

Informationaboutjudgmentsmadeinapplyingaccountingpolicies,thathavethemostsignifi-cant effects on the consolidated financial statements and information about uncertainties relatedtoassumptions,andestimates,thathavethepotentialriskofresultinginasignificantadjustment,areincludedinthefollowingnotes:

■■ Note10–recognitionofinternallygeneratedintangibleassets:whethertheGrouphasmetthecriteriaforcapitalizationofinternallygenerateddevelopmentcostsrelatingtothedesignandtestingofneworimprovedproducts.

Notes to the consolidated financial statements


49ASCOMFINANCIALSTATEMENTS2016 GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

■■ Note10–measurementofintangibles:keyassumptionsandestimatesunderlyingvaluationandrecoverabilityofintangibleassetsfromacquisitionsandcapitalizedinternallygeneratedintangibleassets,includingrelatedforecastedcashflows.

■■ Note15–measurementofpensionliabilitiesrelatedtocertainpensionplans:keyactuarialassumptions, includingdiscount rate, future salaryorpension increasesandaverage lifeexpectancy,aswellasplanassetsperformanceandfundedstatus.

■■ Notes 14 and 30 – recognition and measurement of provisions and contingencies: keyassumptions about the likelihood andmagnitudeof net future outflowof cash, including discountrates.

■■ Note24–recognitionandmeasurementoftheprovisionforincometaxandrecognitionofdeferredincometaxassets:availabilityofqualifiedfuturetaxableprofitagainstwhichtaxlosscarry-forwardscanbeused.

2.4 ConsolidationTheconsolidatedfinancialstatementscoverAscomHoldingAGandallsubsidiariesoverwhichtheGrouphascontrol.AscomcontrolsasubsidiarywhenAscomisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththesubsidiaryandhastheabilitytoaffectthosereturnsthroughitspoweroverthesubsidiary.SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyaredeconsolidatedfromthedatethatcontrolceases.Profitsorlossesfromdisposalofsubsidiariesarerecordedinprofitorloss,includingtheeffectofrecyclingofanygoodwillpreviouslyoffsetagainstequity.Thelistoftheconsoli-datedGroupcompaniesisincludedinnote35.PercentagesoftheGroup’sinterestinsharecapitalcorrespondtopercentagesinvotingrightsheld.

TheGroupusestheacquisitionmethodtoaccountforbusinesscombinations.Thecon-siderationtransferredfortheacquisitionofasubsidiaryisthefairvalueofassetstransferred,liabilitiesassumedandequity interests issuedby theGroup, including the fairvalueofanyassetor liability resulting fromacontingentconsiderationarrangement.Acquisition-relatedcostsarecapitalizedandallocatedtogoodwill.Pursuanttoapurchasepriceallocation,identi-fiableassetsacquired,liabilitiesassumedaswellasanycontingentassetsandliabilitiesaremeasuredinitiallyattheirfairvalueattheacquisitiondate.

Intercompany transactions, balances and unrealized gains or losses on transactions betweenGroupcompaniesareeliminated.

2.5 Foreign currency translationAllassetsandliabilitiesofforeignentitiesaretranslatedintoSwissfrancs(CHF),theGroup’sreportingcurrency,attheexchangeratesprevailingon31December.Income,expensesandcashflowsofforeignentitiesaretranslatedataverageexchangeratesfortheyear.Exchangedifferencesarisingfromthereconversionofthenetinvestmentinsubsidiariesinforeignfunc-tionalcurrenciesarerecordedascurrencytranslationadjustmentsinequity.Upondisposalofaforeignoperation,accumulatedcurrencytranslationadjustmentsarerecognizedintheincomestatement.

ApplicableexchangeratesforAscom’smajorforeigncurrenciesareasfollow:

Foreign currency translation

CHFm ISO code Unit 31.12.2016 Average 2016 31.12.2015 Average 2015

Euro EUR 1 1.074 1.090 1.084 1.075

USdollar USD 1 1.019 0.990 0.995 0.966

Swedishkrona SEK 1 0.112 0.115 0.118 0.115

Poundsterling GBP 1 1.254 1.341 1.476 1.476



ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyof theprimaryeconomicenvironment inwhich theentityoperates (“the func-tionalcurrency”).Goodwillandfairvalueadjustmentsfromtheacquisitionofaforeignentityaretreatedasassetsandliabilitiesoftheforeignentityandtranslatedattherateprevailingonthe acquisition date. Transactions in foreign currencies are accounted for at the average exchangeratesofthepriormonth,asanapproximationoftheexchangerateatthetransactiondate.Gainsandlossesresultingfromthesettlementofsuchtransactionsandfromtheconver-sionofmonetaryassetsand liabilitiesdenominated in foreigncurrenciesare recognized inprofitorloss.Suchbalancesareconvertedintothefunctionalcurrencyoftheforeignentityattheexchangeratesprevailingon31December.

2.6 Revenue recognitionNetrevenueincludeallsalesofgoodsandservicesafterdeductionofanysalesreductionsincludingdiscounts,rebates,returnsandvalue-addedtax.

Revenuefromsaleofgoodsandservicesisrecognizedondeliverytoandacceptancebythecustomer,whensignificantrisksandrewardsofownershipofthegoodshavepassedtothebuyer,anditisprobablethatfutureeconomicbenefitswillflowtoAscom.Goodssoldtocustomersincludehardwareandsoftware.

Servicesrenderedtocustomersincludeconsulting,commissioningandinstallationser-vicesaswellasaftersalessupport,repairandmaintenanceservices.Revenuefromlong-termmaintenance agreements is recognized straight-line over the contract term. Revenue fromfixed-price,multi-elementcontractsincludinggoodsandservicesisallocatedtotheseparablecomponentsbasedonthevalueoftheseparablecomponents.

Revenuefromsignificantcustomerprojectsisrecognizedusingthepercentage-of-com-pletionmethod(PoC),ifthestageofcompletionandexpectedoutcomecanbemeasuredreli-ably.Therespectivecalculationisbasedeitherontheunitscompletedcomparedtothetotalnumberofcontractedunits,orifthisapproachisnotapplicable,onthecostsincurredcomparedtothetotalcoststocomplete.

2.7 Cash and cash equivalentsCashandcashequivalentsincludescashinhand,depositsheldatcallwithbanksandothershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless.

2.8 Trade receivablesTradereceivablesarerecognizedattheirnominalvaluelessanyprovisionfordoubtfuldebts,whichisrecognizedwhenitbecomesprobablethatthereceivableisnotfullyrealizable.Theamountoftheprovisionisthereceivableatnominalvaluelesstheamountoftheexpectedrealization.Thevaluationeffectisrecordedinmarketingandsalesexpenses.

2.9 Other current assetsOthershort-termreceivables,prepaymentsandaccruedincomearestatedatnominalvaluelessimpairment,ifany.

2.10 Inventories and work in progressInventoriesarestatedatthelowerofpurchaseormanufacturingcostornetrealizablevalue.Netrealizablevalueistheestimatedsellingpriceinthenormalcourseofbusiness,lessesti-matedcostofcompletionandestimatedsellingcost.Manufacturingcostincludesdirectmate-rialandproductioncostsaswellasmaterialandproductionoverheads.Theinventorycostisdeterminedusing theweighted-averagecostmethod.Purchasediscountsare treatedasapurchasepricereduction.Valueadjustmentsaremadeforobsoleteandslow-movingitems.Workinprogressonlong-termcontractsisrecognizedaccordingtothestageofcompletionofthe contract (percentage-of-completionmethod). Provisions aremade to cover anticipatedlossesassoonastheseareidentified.



2.11 Property, plant and equipmentProperty,plantandequipmentarerecordedatacquisitionorproductioncost(i.e.historicalcost)lessaccumulateddepreciation.Landisvaluedatcostandisnotdepreciated.Depreciationonproperty,plantandequipmentiscalculatedusingthestraight-linemethodbasedontheesti-matedusefullifeasshowninthefollowingtable:

Useful life in years

Buildings 20–40

Installations 7–10

Productionequipment,measuringandtestequipment,IThardware,furniture 3–5

Toolsanddemoequipment 3

Subsequentcostsare included in theasset’scarryingamountor recognizedasaseparate asset,asappropriate,onlywhentheycanbemeasuredreliablyanditisprobablethatfutureeconomicbenefitsassociatedwithsuchcostswillflowtotheGroup.Thecarryingamountofthereplacedpartisderecognized.Allotherrepairsandmaintenancearechargedtoprofitorlossduringthefinancialperiodinwhichtheyincur.Allgainsorlossesarisingfromthedisposalofproperty,plantandequipmentareincludedintheincomestatement.

2.12 Intangible assetsIntangible assets other than goodwill are recorded at acquisition or production cost less accumulatedamortization.Customerrelationsarecapitalizedusingtheexcess-earningmeth-odforvaluationoftheexistingcustomersatacquisitiondate.Technologyandtrademarksarecapitalizedusingtherelieffromroyaltymethodforvaluation.Theamortizationchargeiscalcu-latedonastraight-linebasisovertheperiodofitsestimatedusefuleconomiclifeasshowninthefollowingtable:

Useful life in years

Customerrelations 10

Technology 5–7

Internallygeneratedintangibles 3–5

Other(trademarks,licensesandsoftware) 3–5

Intangibleassetsnotreadyforusearecarriedatcostlessanyaccumulatedimpairmentlosses.Goodwillresultingfromacquisitions(theexcessofthepurchasepriceoverthenetfair

valueoftheacquiredassets,liabilitiesandequityinterests)isoffsetinequityagainstretainedearningsatthedateofacquisition.Theconsequencesofatheoreticalcapitalizationandamor-tizationofgoodwillareexplainedinnote10.Ifthepurchasepricecontainscontingentelementsthataredependentonfutureresults(e.g.earn-out),aliabilityisrecognizedinthebalancesheetatthedateofacquisitionbasedonanestimateoftheearn-outpaymentexpectedtobepaidattheagreedfuturedate.Changesinthisestimateduringtheearn-outperiodordifferencesbetweentherecordedliabilityandthefinalsettlementarerecordedintheincomestatement.

Allresearchcostsarechargedtoprofitorlossasincurred.Costsincurredondevelopmentprojects(relatingtothedesign,developmentandtestingofmajornewproducts,majorproductimprovementsorsoftwareplatformsandsignificantapplications)arerecognizedasintangibleassets,when specific criteria are fulfilled regarding technical feasibility, commitment of re-sourcesandrecoverabilitythroughfutureeconomicbenefits.Developmentcoststhatcannotbecapitalizedarechargedtoprofitorlossintheperiodinwhichtheyoccur.

2.13 Financial assetsFinancialassetsmainlycompriseloanstothirdparties,deferredtaxassetsandpensionassets.Loansandpensionassetsareinitiallyrecordedatactualvalueandsubsequentlymeasured at amortized cost less valuation adjustments. Information related to deferred tax assets is presentedinnote2.22.



2.14 Impairment of assetsAllnon-currentassetsaretestedforimpairmentwhenindicatorsexistthatthecarryingamountoftheassetmightexceeditsrecoverableamount.Wherethecarryingamountofanassetishigherthantherecoverableamount,theassetisimpairedtoitsrecoverableamount.There-coverableamountisthehigherofanasset’sfairvaluelessdisposalcostandvalueinuse.In-tangible assets not yet available for use are not subject to amortization and are thereforetestedforimpairmentatleastonceayear.Asgoodwillisfullyoffsetagainstequityatthedateofacquisition,animpairmentofgoodwillwillnotaffectincome,butwillonlybedisclosedinthenotestotheconsolidatedfinancialstatements(refertonote10).Impairmenttestsareperformedbased on discounted cash flows at the level of the corresponding cash-generating units, representingthelowestlevelatwhichsuchassetsareevaluatedforrecoverability.

2.15 Derivative financial instrumentsDuetotheglobalnatureofitsactivities,theGroupisexposedtoforeignexchangerisk.Therelatedriskmanagementisdescribedinnote28.TheGroupmayhedgeexpectedfutureforeigncurrencycashflowsbyexecutingforwardcontracts.Thesederivativefinancialinstrumentsarerecognizedatfairvalueatthetradedate.Wheresuchforwardcontractsarelinkedtospecificprojectedtransactionsandcashflows,thehedgingisdeemedtobeeffectiveanddocumentedaccordingly,withchangesinthefairvalueofthecashflowhedgesrecognizedinequity.Thegainor lossrelatingto fairvaluechangesofother forwardcontracts isrecognized immedi-atelyintheincomestatementaspartofthefinancialresult,asthesecontractsaredeemedineffectivehedges.Wherethesecashflowhedgesrelatedtoflowofgoods,thegainsorloss-esarerecordedaspartofcostofsales.Gainsandlossesrelatedtofairvaluechangesofforeigncurrencyforwardcontracts,whichhavebeenrecognizedinequity,arerecycledintheincomestatement in theperiods inwhich thehedged itemaffectsgainor loss.Whena forecastedtransactionisnolongerexpectedtooccur,thecumulativegainorlossreportedinequityisimmediatelytransferredtotheincomestatement.

2.16 EquityRegisteredsharesareclassifiedasequity.Ownshares,expenses forequity-settledshare-basedpayments,realizedgainsorlossesfromdisposalsofownsharesaswellascostsrelatingtocapitalincreasesanddecreasesarerecordedinequity.Dividendsarechargedtoequityintheperiodinwhichtheyareapproved.Thesharepremiumrepresentstheexcessoftheissuedsharecapitaloveritsnominalvalue.

2.17 Borrowings and borrowing costsBorrowingsareinitiallyrecordedatactualvalue,netoftransactioncostsincurredandsubse-quentlymeasuredat amortizedcost. They includemainlybank loansandareclassifiedascurrentiftheyaresettledwithin12monthsandthereisnounconditionalrighttoextendthesettlementtoatleast12monthsafterthebalancesheetdate.Borrowingcostsdirectlyattribut-abletoamaterialacquisition,developmentorproductionofaninternallygeneratedasset,thatnecessarily takes a substantial period of time to get ready for its intended use or sale (i.e.qualifyingasset),arecapitalizedaspartofthecostoftherespectiveasset.Allotherbor-rowingcostsareexpensedintheperiodtheyoccur.



2.18 Pension benefit obligationsTherearevariouspensionplansinexistencewithintheGroupwhichareindividuallyalignedwithlocalconditionsintheirrespectivecountries.Theyarefinancedeitherbymeansofcon-tributionstolegallyindependentpensionorinsurancefunds,orbyrecognitionasliabilitiesinthebalancesheetoftherespectiveGroupcompanies.AneconomicobligationisrecognizedasaliabilityiftherequirementsfortherecognitionofaprovisionaremetunderSwissGAAPFER.AneconomicbenefitiscapitalizedprovidedthattheCompanyisentitledtosuchbenefitinthefuture,forexample,tooffsetfutureGrouppensionexpenses.Freelyavailableemployercontributionreservesarecapitalized.

EmployeesofSwissGroupcompaniesareinsuredaspartofamulti-employerpensionfund,an independentseparate legalentityunderSwissLaw (“Gemeinschaftsstiftung”)financedbycontributionsfromparticipatingemployersandemployees.Aneconomicalobligationoraben-efitfromtheSwisspensionschemeisdeterminedfromthepensionfundfinancialstatementspreparedonthebasisofSwissGAAPFER26“AccountingofPensionPlans”andrecognizedinthebalancesheetaccordingly.Theprovisionforpensionplansofforeignsubsidiaries,whicharenotorganizedasindependentlegalentities,isdeterminedbasedonthelocalvaluationmethodsineffect.

2.19 Provisions and contingent liabilitiesProvisionsaremadewhenthereisapresentlegalorconstructiveobligationasaresultofapastevent,whenitisprobablethatanoutflowofresourceswillberequiredtosettletheobliga-tionandareliableestimatecanbemadeoftheamountoftheobligation.Wheretheeffectofthetimevalueofmoneyismaterial,provisionsaremeasuredatthepresentvalueoftheexpen-dituresexpectedtoberequiredtosettletheobligationinthefuture.Theincreaseintheprovi-sionduetopassageoftimeisrecognizedasinterestexpense.Forcoststhatareexpectedtoariseinconnectionwithsiteclosures,thedisposalofcompaniesorbusinessunitsandrestruc-turing,provisionsaremadeat thetimeof thedecisionofapprovedmeasures.Foronerouscontracts,provisionsareprovidediftheunavoidablecostsofmeetingtheobligationexceedtheeconomicbenefittobereceived.Ifanoutflowofresourcestosettleanobligationisnotprobable,acontingentliabilityisdisclosed.Contingentliabilitiesandotheroff-balancesheetcommitmentsareevaluatedateachreportingdate,takingintoaccountalsoanyguaranteedconsiderationsfromotherparties(e.g.insurancecoverage). 2.20 LeasesAleaseisanagreementwherebythelessorconveystothelesseeinreturnforapayment, orseriesofpayments,therighttouseanassetforanagreedperiodoftime.

a)LesseeaccountingLeasesinwhichasignificantportionoftherisksandrewardsofownershiparetransferredfromthelessortothelesseeareclassifiedasfinanceleases.Theleasedassetsarecarriedatcostnothigherthantheminimalleasepaymentsanddepreciatedalongwithotherproperty,plantandequipment(seenote2.11).Thecorrespondingleasingobligationsareshownasliabilities.Leasingpaymentsareallocatedaccordinglyaseithercapitalrepaymentsorinterestexpenses.Leasesinwhichasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeunderoperatingleasesarechargedtoprofitorlossonastraight-linebasisovertheperiodofthelease.

b)LessoraccountingWhenassetsareleasedoutunderafinancelease,thepresentvalueofthenetminimumlease paymentsisrecognizedasareceivableunderfinancialassets.Thedifferencebetweenthegrossreceivable(grossinvestmentinleases)andthepresentvalueofthenetminimumleasepaymentsisrecognizedasunearnedinterestincome.Eachleaseinstallmentisallocatedbe-tweenthereceivableand interest income.Whenassetsare leasedoutunderanoperatinglease,theassetisincludedinthebalancesheetbasedonthenatureoftheasset.Operatingleaseincomeisrecognizedinprofitorlossoverthetermoftheleaseonastraight-linebasis.



2.21 Share-based paymentsSelectedmembersofAscom’sseniormanagementreceiveremunerationintheformofshare-basedremunerationspursuanttosharematchingplans(from2013onwards)andstockoptionplans(until2012).Thebeneficiariesofsharematchingplansgettheopportunitytobuycom-panyshares(orphantomsharesinthecaseofresidentsoftheUSA)atmarketpriceasinvest-mentsharesuptoacertainamount.Theyhavetokeeptheinvestmentsharesoveradefinedperiodinordertobenefitfromtheplan.Beneficiariesreceive35%ofthenumberoftheirinvest-mentsharesasmatchingsharesafterathree-yearvestingperiodforfreeiftheyarestillem-ployedwithAscomatthispointoftime.Asanadditionalperformance-relatedpart,beneficiariesmayreceiveupto65%ofthenumberoftheirinvestmentsharesasmatchingshares,providedthatdefinedmid-termprofitabilitytargetsareachieved.Asamaximum,thecompanywillhonoreachinvestmentsharewithonematchingshare.

Thecostofmatchingshares ismeasuredinitiallyat fairvalueatgrantdate, takingintoconsiderationadeductionforthedividendyieldaswellasexpectedfluctuationoftheplanparticipants.Theinitialfairvalueisrecognizedasexpenseoverthevestingperiod,togetherwithacorrespondingincreaseinothercapitalreservesinequity(forequity-settledinstruments)orinotherprovisions(forcash-settledinstruments).Ascomrevisesitsestimatesofthenumberofinstrumentsexpectedtovest,basedonthebestavailableestimateoftheoutcomeofthenon-market-vestingconditions(theGroupEBITDAmargin)attheendofeachreportingperiod,withchangesrecognizedinpersonnelexpenses.

2.22 Income taxIncometaxisrecordedbasedontheperiodtowhichitproperlyrelates.Deferredincometaxisrecordedinfullusingtheliabilitymethod.DeferredincometaxassetsandliabilitiesariseontemporarydifferencesbetweencarryingamountsofassetsandliabilitiesforGrouppurposesandtheirrelatedtaxvalues.Thetaxratesandlawsenactedorsubstantivelyenactedatthebalancesheetdateareusedtodeterminedeferredincometax.Deferredincometaxassetsresult fromtax losscarry-forwards,taxcreditsaswellastemporaryvaluationdifferencesofassetsandliabilities.Theyarerecognizedtotheextentthatrealizationthroughfuturetaxableprofitsisprobable.Deferredincometaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrentincometaxassetsagainstcurrentincometaxliabilitiesandwhenthedeferredincometaxrelatestothesametaxauthority.

2.23 Definition of non-GAAP measuresEarningsbeforeinterestandincometax(EBIT)correspondtotheoperatingresult.Earningsbeforeinterest,incometax,depreciationandamortization(EBITDA)asasubtotalincludesEBITbeforedeductionofdepreciationandimpairmentofproperty,plantandequipmentaswellasamortizationandimpairmentofintangibleassets.Asdefined,EBITandEBITDAdonotincludetheimpactofnon-operatingorextraordinaryresults.



3. SIGNIFICANT TRANSACTIONS AND CHANGES IN THE SCOPE OF CONSOLIDATION

Disposal of the Network Testing Division (2016)On19August2016,AscomHoldingAGandInfoVistasignedabindingshareandassetpurchaseagreementunderwhichInfoVistaacquiredtheNetworkTestingDivision.Thetransactionwasbasedonacash-free/debt-freeenterprisevalueofUSD45million.AscomreceivedUSD30millionincashatclosingandtheremainderoftheconsiderationintheformofasubordinatedvendorloanwithanominalvalueofUSD15million,aseven-yearmaturityandastatedinterestrateof4%p.a.Theclosingofthetransactiontookplaceon30September2016,andasaresult,Ascomexitedthenetworktestingbusiness(around400employees)asofthisdate.Thecon-solidatedfinancialstatementsincludedtheresultofthedisposalandtheoperatingresultoftheNetworkTestingDivisionfortheninemonthsended30September2016,asshowninnote4.

ThecondensedbalancesheetoftheNetworkTestingDivisionasofdisposaldateandtheresultofthedisposalaredisclosedonthetablebelow.

CHFm 30.09.2016

Cashandcashequivalents 9.1

Tradereceivables 32.5

Inventoriesandworkinprogress 5.0

Othercurrentassets 9.4

Current assets 56.0

Property,plantandequipment 2.7

Intangibleassets 14.5

Financialassets 12.9

Non-current assets 30.1

Total assets 86.1

Tradepayables (4.9)

Otherliabilities (6.2)

Customerprepaymentsanddeferredrevenue (10.0)

Othercurrentliabilities (3.3)

Current liabilities (24.4)

Non-current liabilities (1.1)

Total liabilities (25.5)

Net assets 60.6

Effectfromrecyclingofgoodwillandcurrencytranslationadjustments 127.8

Costsincurredinconnectionwiththedisposal 5.1

Lesscashreceived (29.2)

Lessconsiderationreceivables (19.2)

Extraordinary result from disposal 145.1



Acquisition of UMS (2016)On12January2016,Ascomacquiredallthesharesoftheprivatelyheld,Florence,Italy-basedsoftwarecompanyUMS (UnitedMedicalSoftware),whichprovides integrations formedicaldevicesandsuppliesdigitalmedicalrecordssoftwaresolutionsforlife-criticalpatientcare.Withthisacquisition,AscomgainedaccesstonewsoftwareandcompetenceforglobalintegratedworkflowsolutionsinhealthcareICTinperfectalignmentwithAscom’sVision2020.Moreover,AscomimproveditsmarketpositioninItalysignificantlyduetotheacquiredinstalledbase.UMSsolutions help clinicians treat patients facing life-critical outcomes,while filling thegaps indigitalmedicalrecordstechnology.UMSoffersmorethan200medicaldeviceintegrationsand1,000differentEMRformsandintegrationsandalsohasproductsreadyforinternationaldeploy-mentandinstallationsinEurope.Thecompany’scustomersincludelargeuniversityhospitals,privatespecialtyclinics,andhealthcaregovernmententities,mainlyinItaly,butalsothroughoutEurope.All27employeesweretakenoverattheirexistinglocation.UMSgeneratednetrev-enuesofCHF 3millionin2015,withanEBITDAmargincomparabletotheWirelessSolutionsDivision.

ThepurchasepriceofCHF8.9millionincludedacontingentconsiderationofuptoCHF 2.8million,payabletwoyearsafterclosing,uponachievementofagreedrevenuetargetsandretentionofkeyemployees.

CHFm As at the acquisition date

Consideration as of 12.1.2016

Cashpaid 6.0

Acquisition-relatedcosts 0.1

Total cash outflow 6.1

Contingentconsideration 2.8

Total consideration 8.9

Identifiable assets and liabilities

Cashandcashequivalents 0.3

Tradereceivables 1.4

Intangibleassets1 8.0

Othercurrentandnon-currentassets 1.2

Liabilities (4.2)

Total identifiable net assets 6.7

Goodwill2 2.2

Total consideration 8.9

1 Intangible assets included mainly intangible assets identified through business combination such as customer relations and technology.2 The goodwill of CHF 2.2 million is attributable to the acquired workforce, additional growth potential in the Italian market and

other product portfolio synergies.

Disposal of System & Solutions business unit (2015)On31December2015,AscomdisposedofitsAachen-based(Germany)businessunitSystems &Solutions to Axino SolutionsGmbH. The Systems & Solutions business unit was part of the NetworkTestingDivision.Systems & SolutionsprovidescomprehensiveITsolutionsinthefieldofoperationssupportsystemsforcompaniesinthetelecommunications,automotive,energyandretailindustries,mainlyinGermanyandSwitzerland.Systems & SolutionsgeneratedrevenueofCHF13.1millionandanoperatinglossofCHF2.8millionin2015.ThedisposalgainamountedtoCHF2.6million.Thenetpurchasepricewassettledincash.AnadditionalcontingentpurchasepriceofuptoEUR1.3millionhasnotbeenrecognized,asthisearn-outcomponentdependsontheachievementsofcertainincomingordersandrevenuetargetsin2016and2017.


57ASCOM FINANCIAL STATEMENTS 2016 GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4. SEGMENT INFORMATION

Key figures by segment

CHFm Wireless Solutions

Network Testing 1

Corporate and other

Consolidation Total Ascom

2016 2015 2016 2015 2016 2015 2016 2015 2016 2015

Incoming orders 303.3 311.8 57.5 101.1 – – (0.4) (0.4) 360.4 412.5

Order backlog at 31.12. 121.8 117.5 – 17.7 – – – – 121.8 135.2

Net revenue 300.8 304.2 53.8 107.0 – – (0.3) (0.4) 354.3 410.8

of which with other segments 0.3 0.4 – – – – (0.3) (0.4) – –

Cost of sales (147.8) (150.6) (28.3) (53.4) (0.2) (0.2) (0.5) 0.1 (176.8) (204.1)

Gross profit/(loss) 153.0 153.6 25.5 53.6 (0.2) (0.2) (0.8) (0.3) 177.5 206.7

as % of revenue 50.9% 50.5% 47.4% 50.1% n/a n/a n/a n/a 50.1% 50.3%

Marketing and sales (74.7) (70.3) (17.8) (27.7) (0.6) (0.6) 0.4 – (92.7) (98.6)

Research and development (26.9) (24.0) (13.3) (19.1) – – – – (40.2) (43.1)

Administration (16.1) (12.3) (5.7) (8.6) (15.7) (11.1) 0.3 0.3 (37.2) (31.7)

Other operating income – – – 2.6 13.5 11.3 (13.2) (11.1) 0.3 2.8

Other operating expenses (11.0) (8.2) (8.7) (11.7) 0.1 – 13.2 11.1 (6.4) (8.8)

Operating result (EBIT) 24.3 38.8 (20.0) (10.9) (2.9) (0.6) (0.1) – 1.3 27.3

as % of revenue 8.1% 12.8% n/a n/a n/a n/a n/a n/a 0.4% 6.6%

Financial income/(expenses), net (2.9) 4.4

Non-operating result (0.6) 0.4

Extraordinary result (145.1) –


Income tax 1.6 (7.8)

Group profit/(loss) for the period (145.7) 24.3

Additional information

EBITDA 31.6 45.5 (11.7) (1.1) (2.9) (0.5) (0.1) (0.1) 16.9 43.8

as % of revenue 10.5% 15.0% n/a n/a n/a n/a n/a n/a 4.8% 10.7%

Restructuring costs 10.4 – (0.2) 4.0 0.2 – – – 10.4 4.0

EBITDA before restructuring costs 42.0 45.5 (11.9) 2.9 (2.7) (0.5) (0.1) (0.1) 27.3 47.8

as % of revenue 14.0% 15.0% n/a 2.7% n/a n/a n/a n/a 7.7% 11.6%

Capital expenditures 15.2 10.9 7.2 2.1 – 0.2 – – 22.4 13.2

Employees (FTE) at 31.12. 1,173 1,237 – 407 14 14 – – 1,188 1,658

Reportable segments’ assets 145.6 120.2 – 74.8 18.7 12.1 (2.4) (3.1) 161.9 204.0

Deferred income tax assets 12.3 19.8

Financial assets 14.4 3.8

Income tax receivables 2.2 1.4

Cash and cash equivalents 34.3 57.4

Total assets at 31.12. 225.1 286.4

1 Discontinued operations as of 30 September 2016 (refer to note 3).


58 ASCOM FINANCIAL STATEMENTS 2016 GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Operating segments reflect the Group’s management structure and the way financial informa-tion is regularly reviewed by the Chief Executive Officer (CEO). Ascom’s operating and report-able segments were the two divisions: Wireless Solutions and Network Testing (refer to business description in note 1). Corporate includes Group activities that are not assigned directly to the operating segments, primarily corporate headquarters activities. Effective 30 September 2016, Ascom divested the Network Testing Division (refer to note 3) and since then comprises a single business unit focused solely on the business previously referred to as the Wireless Solutions Division.

Non-core activities related to businesses disposed in prior years, including leasing and facility management of industrial properties, represent non-operating activities that do not qualify as an operating segment and are shown in the consolidated income statement on a net basis as non-operating result.

Transactions between Ascom’s operating segments are priced comparable to external customers. Intersegment revenues are eliminated on consolidation.

Key figures by region

CHFm Europe Americas Asia Pacific Middle East and Africa

Total Ascom

2016 2015 2016 2015 2016 2015 2016 2015 2016 2015

Incoming orders 239.2 266.5 79.0 97.3 24.5 25.9 17.7 22.8 360.4 412.5

Net revenue 240.7 263.2 77.9 98.5 20.9 25.6 14.8 23.5 354.3 410.8

Non-current assets at 31.12. 1 46.2 48.2 1.7 3.3 1.9 2.6 – 1.2 49.8 55.3

Employees (FTE) at 31.12. 963 1,174 162 284 63 157 – 43 1,188 1,658

1 This line item exclusively contains property, plant and equipment, intangible assets as well as other non-current assets.

Incoming orders and net revenue information above is based on the location of the customers.CHF 38.9 million of the total revenue is attributable to Germany (previous year: CHF 47.8

million), CHF 53.0 million to the Netherlands (previous year: CHF 59.2 million) and CHF 77.9 million to the US (previous year: CHF 88.6 million).

Of the non-current assets disclosed in the table above, CHF 32.2 million are attributable to Sweden (previous year: CHF 39.6 million).

5. SIGNIFICANT OPERATIONAL CHANGES AND RESTRUCTURING

On 17 August 2016, the Board of Directors of Ascom Holding AG approved the OneCompany program. The program is in line with the strategic portfolio decision to convert Ascom into a one-business company and to streamline the Group with the target of significantly lowering the historical cost base. The reorganization referred to as the OneCompany program converted the Group from a divisional and regional set-up to a leaner functional organization, which is more aligned with Ascom’s customers’ needs. The program comprises mainly personnel re-lated restructuring charges, impacts all functions within the organization and carried a cost of CHF 10.6 million, which was charged to the 2016 operating result of the continuing business, as included in the following table.

CHFm 2016 2015

Restructuring included in cost of sales (1.2) (2.6)

Restructuring included in marketing and sales (3.9) (0.8)

Restructuring included in research and development (0.5) (0.4)

Restructuring included in administration (4.8) (0.2)

Total (10.4) (4.0)



In2015,restructuringcostsrelatetotheNetworkTestingDivision.On21December2015,theBoardofDirectorsofAscomHoldingAGapprovedtherestructuringoftheNetworkTestingbusinessinresponsetounexpectedshiftsinthecapitalinvestmentandspendingpatternsoflargetelecommunicationsnetworkoperators, inparticular inNorthAmerica,whichrequiredadjustmentstothebusiness’productportfolioandsupplychainorganization.Therelated2015restructuringchargeofCHF4millioncomprisedCHF2.5millionofpersonnelrelatedrestructur-ingchargesandanticipatedexceptionalinventorywrite-offsofCHF1.5million.

6. TRADE RECEIVABLES

CHFm 31.12.2016 31.12.2015

Receivablesfromthirdparties1 66.8 104.8

Lessprovisionfordoubtfuldebts (0.9) (3.0)

Total 65.9 101.8

1 This line item includes CHF 1.1 million (previous year: CHF 2.5 million) of trade receivables arising from customer projects using the percentage-of-completion method.

TheGroupdoesnotholdanycollateralassecurityfortradereceivables.

7. OTHER SHORT-TERM RECEIVABLES

CHFm 31.12.2016 31.12.2015

Incometaxandothertaxreceivables 2.8 5.2

Otherreceivables 8.5 5.6

Financeleases 0.6 0.6

Derivativefinancialinstruments 0.1 1.2

Total other short-term receivables 12.0 12.6

Otherreceivablesasof31December2016comprisemainlyamountsduebasedonfinalpur-chasepriceadjustmentsrelatedtothedisposaloftheNetworkTestingDivision,accordingtotheshareandassetpurchaseagreement.

8. INVENTORIES AND WORK IN PROGRESS

CHFm 31.12.2016 31.12.2015

Rawmaterialsandcomponents 1.3 3.8

Workinprogress1 4.8 6.0

Finishedgoodsandgoodsforresale 16.0 20.5

Inventoryprovision (3.6) (7.7)

Total 18.5 22.6

1 This line item includes CHF 0.5 million (previous year: CHF 2.0 million) of work in progress arising from customer projects using the percentage-of-completion method.



9. PROPERTY, PLANT AND EQUIPMENT

CHFm Land and buildings

Machines, installations

and equipment

Equipment under

construction

Other Total

Cost

Balance at 1.1.2015 30.4 40.9 1.1 17.6 90.0

Additions 0.2 1.5 0.9 1.7 4.3

Disposals (10.0) (13.1) – (0.9) (24.0)

Disposalofasubsidiaryorbusiness – (0.7) – (0.1) (0.8)

Reclassifications 0.1 0.4 (1.1) 0.6 –

Currencytranslationadjustments (1.9) (2.2) (0.1) (1.2) (5.4)

Balance at 31.12.2015 18.8 26.8 0.8 17.7 64.1

Additions 0.3 0.9 2.2 0.6 4.0

Disposals (0.8) (3.3) – (0.7) (4.8)

Acquisitionofasubsidiaryorbusiness – – – 0.1 0.1

Disposalofasubsidiaryorbusiness (0.2) (5.9) (0.5) (2.9) (9.5)

Reclassifications – 0.4 (0.4) – –

Currencytranslationadjustments (0.4) (0.8) – (0.6) (1.8)

Balance at 31.12.2016 17.7 18.1 2.1 14.2 52.1

Accumulated depreciation and impairment

Balance at 1.1.2015 (22.6) (36.5) – (15.7) (74.8)

Depreciationcharge (0.5) (2.0) – (1.1) (3.6)

Disposals 10.0 13.1 – 0.9 24.0

Disposalofasubsidiaryorbusiness – 0.6 – 0.1 0.7

Currencytranslationadjustments 1.1 1.9 – 1.0 4.0

Balance at 31.12.2015 (12.0) (22.9) – (14.8) (49.7)

Depreciationcharge (0.5) (1.6) – (1.2) (3.3)

Impairment (0.3) – – – (0.3)

Disposals 0.5 3.2 – 0.5 4.2

Disposalofasubsidiaryorbusiness 0.1 4.7 – 2.1 6.9

Currencytranslationadjustments 0.2 0.7 – 0.5 1.4

Balance at 31.12.2016 (12.0) (15.9) – (12.9) (40.8)

Net carrying amount at 31.12.2015 6.8 3.9 0.8 2.9 14.4

Thereof non-operating 1 4.7 – – – 4.7


Thereof non-operating 1 4.3 – – – 4.3

1 Held exclusively for investment purposes (not for use)



10. INTANGIBLE ASSETS

CHFm Customer relations

Technology Internally generated

intangibles

Other Total

Cost

Balance at 1.1.2015 38.0 40.0 18.9 28.1 125.0

Additions – – 4.7 4.3 9.0

Disposals – – – (0.2) (0.2)

Disposalofasubsidiaryorbusiness – – – (0.2) (0.2)


Balance at 31.12.2015 35.5 37.2 22.4 30.2 125.3

Additions – – 6.2 12.2 18.4

Disposals – – – (0.8) (0.8)

Acquisitionofasubsidiaryorbusiness 1.8 3.0 – 3.2 8.0

Disposalofasubsidiaryorbusiness (28.2) (33.4) – (17.1) (78.7)


Balance at 31.12.2016 8.0 5.3 27.3 26.2 66.8

Accumulated amortization and impairment

Balance at 1.1.2015 (19.0) (26.8) (6.5) (24.2) (76.5)

Amortizationcharge (3.5) (5.2) (2.0) (2.1) (12.8)

Impairment – – (0.4) – (0.4)

Disposals – – – 0.2 0.2

Disposalofasubsidiaryorbusiness – – – 0.2 0.2

Currencytranslationadjustments 1.1 1.8 0.4 1.4 4.7

Balance at 31.12.2015 (21.4) (30.2) (8.5) (24.5) (84.6)

Amortizationcharge (3.0) (3.2) (2.4) (3.7) (12.3)

Disposals – – – 0.8 0.8

Disposalofasubsidiaryorbusiness 20.7 30.3 – 13.1 64.1

Currencytranslationadjustments 0.9 1.2 0.5 1.1 3.7

Balance at 31.12.2016 (2.8) (1.9) (10.4) (13.2) (28.3)


Thereof acquired 14.1 7.0 – 5.7 26.8

Thereof generated internally – – 13.9 – 13.9


Thereof acquired 5.2 3.4 – 13.0 21.6

Thereof generated internally – – 16.9 – 16.9

Otherintangiblescomprizeaquiredtrademarks,licencesandsoftwares.



GoodwillfromacquisitionsisoffsetagainsttheCompany’sequityattheacquisitiondate.Thetheoreticalamortizationisbasedonthestraight-linemethodoverausefullifeoffiveyears.Thetheoreticalcapitalizationofthegoodwillwouldaffecttheresultoftheconsolidatedfinancialstatementsasfollows:

CHFm 2016 2015

Acquisition cost

Asof1January 159.3 169.0

Additionsfromacquisitions 2.2 –

Liquidationofasubsidiaryorbusiness (0.6) –

Disposalofasubsidiaryorbusiness (122.8) –

Translationadjustment (1.6) (9.7)

As of 31 December 36.5 159.3

Accumulated amortization

Asof1January (151.0) (154.9)

Additions (4.9) (4.8)

Liquidationofasubsidiaryorbusiness 0.6 –

Disposalofasubsidiaryorbusiness 122.8 –

Translationadjustment 1.6 8.7

As of 31 December (30.9) (151.0)

Theoretical book values, net

Asof1January 8.3 14.1

As of 31 December 5.7 8.3

Theorical effect on income statement

CHFm 2016 2015

Operatingresult 1.3 27.3

Theoreticalamortizationgoodwill (4.9) (4.8)

Theoreticaloperatingresultincl.amortizationgoodwill (3.6) 22.5

Groupprofit/(loss)fortheperiod (145.7) 24.3

Reversalofrecyclingofgoodwill 122.8 –

Theoreticalamortizationgoodwill (4.9) (4.8)

Theoreticalgroupprofit/(loss)fortheperiodincl.amortizationgoodwill (27.8) 19.5

Theorical effect on balance sheet

CHFm 2016 2015

Equityaccordingtobalancesheet 80.9 116.7

Theoreticalcapitalizationnetbookvaluegoodwill 5.7 8.3

Theoreticalequityincl.netbookvaluegoodwill 86.6 125.0

Equityas%ofbalancesheettotal 35.9% 40.7%

Theoreticalequityincl.netbookvaluegoodwillas%ofbalancesheettotal(incl.goodwill)

37.5% 42.4%



11. FINANCIAL ASSETS

CHFm 31.12.2016 31.12.2015

Deferredincometaxassets 12.3 19.8

Pension-relatedassets 4.4 4.5

Financeleases 1.8 1.6

Otherfinancialassets 12.0 0.7

Total non-current portion 30.5 26.6

Detailed information related todeferred income taxassetsandpension-relatedassetsareprovidedinnotes24and15,respectively.Otherfinancialassetsmainlycomprisethesubordi-natedvendor loanamounting toCHF11.6millionatactualvalue (havinganominalvalueof USD15million,aseven-yearmaturityandastatedinterestrateof4%p.a.)grantedinconnectionwiththedisposaloftheNetworkTestingDivision(refertonote3).

Futureminimumleasepaymentsunderfinanceleasecontractstogetherwiththepresentvalueofthenetminimumleasepaymentsareasfollows:

CHFm Within 12 months

Between 1 and 5 years

Later Total 31.12.2016

Grossinvestmentinleases 0.7 1.6 0.3 2.6

Unearnedinterestincome (0.1) (0.2) – (0.3)

Present value of the net minimum lease payments 0.6 1.4 0.3 2.3

CHFm Within 12 months

Between 1 and 5 years

Later Total 31.12.2015

Grossinvestmentinleases 0.7 1.5 0.4 2.6

Unearnedinterestincome (0.1) (0.2) (0.1) (0.4)

Present value of the net minimum lease payments 0.6 1.3 0.3 2.2

12. BORROWINGS

TheGroupsyndicatedcreditfacilitiesexpiredon24May2016andwerereplacedbyrevolvingmulti-currencycreditfacilitiesinanaggregateamountequaltoCHF35.0millionwithtwobanksto fundworkingcapital in theordinarycourseofbusiness,atvariable interest rates (LIBOR+ 0.8%),withanoptiontofixtheinterestratemonthlyforamaximumperiodof12months.Inaddition,theGrouphasanuncommittedguaranteelineofCHF10.0millionwithaSwissbank(31December2015:cashlinesofCHF140.0millionandguaranteelinesofCHF46.9million).At31December,Ascomusedthecashlinesasshowninthetablebelow(borrowingsdenomi-natedinCHF):

CHFm Current portion Total

31.12.2016 31.12.2015 31.12.2016 31.12.2015

Non-currentloansfromfinancial institutionsandbanks

– – 10.2 0.1

Currentloansfromfinancial institutionsandbanks

– 20.0 – 20.0

Total – 20.0 10.2 20.1

AsthefinalmaturityoftheGroup’snewcreditfacilitiesis24May2020,theoutstandingbor-rowingsat31December2016havebeenclassifiedasnon-current.Thecreditfacilityincludestwofinancialcovenants:adebtserviceratio(calculatedastheratioofnetdebtandoutstandingbankguaranteestoEBITDA)andanequityratio(calculatedastheratioofshareholders’equitytototalassets).Thefinancialcovenantsarefullycompliedwith.



13. OTHER LIABILITIES (CURRENT)

CHFm 31.12.2016 31.12.2015

Incometaxliabilities 1.6 4.3

VATandothertaxliabilities 5.1 6.3

Personnel-relatedliabilities 7.2 9.0

Derivativefinancialinstruments 0.4 0.8

Otherliabilities 0.4 0.7

Total 14.7 21.1

14. PROVISIONS

CHFm Restructuring Deferred tax provisions

Employee benefit

obligation

Other provisions

Total

Balance at 1.1.2015 0.4 5.8 19.9 12.8 38.9

Additions 2.7 0.4 0.8 3.8 7.7

Increaseinpresentvalue – – 0.6 0.1 0.7

Payments (0.1) – (1.0) (5.5) (6.6)

Releaseofunusedamounts – (0.9) – (1.2) (2.1)

Acquisitionofasubsidiaryorbusiness – – (0.1) (0.1) (0.2)

Currencytranslationadjustments – (0.3) (1.5) (0.3) (2.1)

Balance at 31.12.2015 3.0 5.0 18.7 9.6 36.3

Additions 10.6 2.2 3.4 6.6 22.8

Increaseinpresentvalue – – 0.7 – 0.7

Payments (2.9) – (1.4) (2.1) (6.4)

Releaseofunusedamounts (0.2) (2.0) (0.2) (1.4) (3.8)

Acquisitionofasubsidiaryorbusiness – 1.6 0.4 – 2.0

Disposalofasubsidiaryorbusiness (0.5) – (0.1) – (0.6)


Balance at 31.12.2016 9.9 6.6 20.4 12.6 49.5

Expected payment

CHFm Restructuring Deferred tax provisions

Employee benefit

obligation

Other provisions

Total

Within12months 2.8 – – 3.9 6.7

Later 0.2 5.0 18.7 5.7 29.6

Balance at 31.12.2015 3.0 5.0 18.7 9.6 36.3

Within12months 9.8 – – 6.4 16.2

Later 0.1 6.6 20.4 6.2 33.3

Balance at 31.12.2016 9.9 6.6 20.4 12.6 49.5

Fordetaileddescriptionsrelatedtorestructuringanddeferredtaxes,refertonotes5and24,respectively.

Provisions for employeebenefit obligation include theeconomical pensionobligation(refertonote15)aswellasprovisionsforotherlong-termemployeebenefits.Thediscountrateusedinthecalculationforcertainforeignpensionplansisthemostimportantparameterandanychangescanstronglyimpactthevaluationofthepensionliability.In2016,therangeoftheapplieddiscountratevariesbetween1.4%and2.6%(previousyear:2.0%–3.8%),whichcorre-spondstolocalmarketconditions.



Otherprovisionscomprisemainlyobligationsarisingfromassertedandunassertedclaimsordisputes inthenormalcourseofAscom’sbusinessoperations,provisionsforwarranties,obligationsarisingfromcash-settledshare-basedpaymentsandprovisionsforenvironmentalcostsrelatingtonon-operatingpremises.

15. PENSION BENEFIT OBLIGATIONS

Employer contribution reserves (ECR)

CHFm Result from ECR in personnel expense

Result from ECR in interests expense

Nominal value

31.12.2016

Renounced use

31.12.2016

Balance sheet

31.12.2016

Accumu- lation (+) / usage (−)

2016

CTA 2016

Balance sheet

31.12.2015

2016 2015 2016 2015

Patronagefunds/ patronagepensioninstitutions

– – – (1.4) – 1.4 – – – –

Pensionplans 4.4 – 4.4 1.3 – 3.1 (0.1) – (0.1) –

Total 4.4 – 4.4 (0.1) – 4.5 (0.1) – (0.1) –

Economical benefit/economical obligation and pension benefit expenses

CHFm Economical part of the organization

Pension benefit expenses within

personnel expenses

Pension benefit expenses within

interests expenses

Surplus (−) / deficit (+)

31.12.2016

31.12.2016 31.12.2015 Change to prior-year period or

recognized in the current

result of the period

CTA2016

Contri-butions

concerning the

business period

2016 2015 2016 2015

Pensionplanswithout surplus/deficit

n/a n/a n/a n/a n/a n/a 13.7 14.0 – –

Pensionplanswithdeficit 4.4 4.4 3.4 1.5 (0.5) (0.8) 2.4 0.3 0.1 0.1

Pensionplanswithoutownassets 14.7 14.7 14.6 0.8 (0.7) (0.5) 0.8 0.6 0.6 0.5

Total 19.1 19.1 18.0 2.3 (1.2) (15.0) 16.9 14.9 0.7 0.6

16. CUSTOMER PREPAYMENTS AND DEFERRED REVENUE

CHFm 31.12.2016 31.12.2015

Customerprepayments1 18.8 18.0

Deferredrevenue 2.4 11.4

Total 21.2 29.4

1 This line item includes CHF 2.0 million (previous year: nil) of customer prepayments arising from customer projects using the percentage-of-completion method.

17. ACCRUED LIABILITIES

CHFm 31.12.2016 31.12.2015

Personnel-relatedaccruals 13.9 19.8

Accruedliabilitiesarisingfromlong-termcontracts(PoC) 0.5 2.2

Otheraccruedexpenses 10.7 11.0

Total 25.1 33.0



18. SHARE CAPITAL AND OWN SHARES

Composition of share capital

CHFm Number 31.12.2016

Amount 31.12.2016

Number 31.12.2015

Amount 31.12.2015

Registeredsharesnom.CHF0.50 36,000,000 18.0 36,000,000 18.0

Numberofregisteredshareholders 4,630 4,412 –

Thetotalauthorizednumberofordinarysharesis36,000,000ofwhich35,901,925areout-standing at 31 December 2016 (previous year: 35,779,106). Each outstanding share grants theowneronevoteattheAnnualGeneralMeetingoftheshareholders.Allsharesissuedbythecompanywerefullypaidin.

Own shares

CHFm Number 2016 Amount 2016 Average transaction price

Number 2015 Amount 2015 Average transaction price

Balance at 1.1. 220,894 2.3 10.62 890,894 9.2 10.33

Additions 975 – 17.92 13,185 0.2 17.72

Disposals (123,794) (1.3) 10.64 (683,185) (7.1) 10.41

Balance at 31.12. 98,075 1.0 10.66 220,894 2.3 10.62

19. NET REVENUE

CHFm 2016 2015

Saleofgoods 242.2 292.5

Renderingofservices 110.9 117.2

Otherrevenue 1.2 1.1

Total 354.3 410.8

Saleofgoodscomprises saleof hardwareand software.Renderingof services comprisesprofessionalservicesdeliveredinconnectionwithcustomerprojectsaswellasafter-salesup-port, repairandmaintenanceservices.The tablebelowprovidesadditional information forlong-termcontractsapplyingthepercentage-of-completionmethod:

CHFm 31.12.2016 31.12.2015

Contractrevenuerecognizedinthereportingperiod 22.9 22.5

Aggregateamountofcostsincurred,todate 9.5 7.3

Aggregateamountofrecognizedprofits(lessrecognizedlosses),todate 5.7 4.3

Aggregate revenue for contract work, to date 15.2 11.6

Aggregateprogressbillings,todate (9.3) (10.3)

Currencytranslationadjustments 0.1 –

Net accrual for contract work 6.0 1.3



20. PERSONNEL EXPENSES

Thefollowingpersonnelexpensesareincludedincostofsales,marketingandsales,researchanddevelopmentaswellasadministrationexpenses:

CHFm 2016 2015

Wagesandsalaries (122.7) (135.3)

Socialsecuritycosts (15.7) (15.7)

Pensioncosts (16.9) (14.9)

Share-basedpayments (0.6) (0.5)

Otherpersonnelexpenses (16.6) (12.5)

Total (172.5) (178.9)

21. OTHER OPERATING INCOME AND EXPENSES

CHFm 2016 2015

Amortizationofintangibleassetsfromacquisition1 (6.4) (8.8)

Total other operating expenses (6.4) (8.8)

Gainrelatedtodisposalofabusinessunit 0.1 2.6

Otheroperatingincome 0.2 0.2

Total other operating income 0.3 2.8

1 This line item exclusively contains amortization of intangible assets initially capitalized due to a purchase price allocation at acquisition date.

22. FINANCIAL INCOME AND EXPENSES

CHFm 2016 2015

Financial income

Interestincome 0.7 0.2

Netforeignexchangegains – 6.1

Otherfinancialincome – 0.1

Total 0.7 6.4

Financial expenses

Interestexpenses (0.9) (0.9)

Netforeignexchangelosses (2.0) –

Otherfinancialexpenses (0.7) (1.1)

Total (3.6) (2.0)

Financial income/(expenses), net (2.9) 4.4

23. NON-OPERATING RESULT

CHFm 2016 2015

Non-operatingincome 1.4 3.5

Non-operatingexpenses (2.0) (3.1)

Total (0.6) 0.4

Non-operatingincomeandexpensesrelateexclusivelytonon-corelegacyrealestateactivities.



24. INCOME TAX

CHFm 2016 2015

Currentincometaxcharge (4.3) (8.7)

Adjustmentsinrespectofcurrentincometaxofpreviousyears 0.4 –

Deferredincometax 5.5 0.9

Total income tax 1.6 (7.8)

The following reconciliation explains the difference between the expected and the actual incometaxcharge:

Analysis of income tax rate

CHFm 2016 2015

Ordinaryresult (1.6) 31.7

Weightedaverageexpectedincometaxrate (14.0%) 24.6%

Non-operatingandextraordinaryresult (145.7) 0.4

Weightedaverageexpectedincometaxrate 22.5% 23.4%


Weightedaverageexpectedincometaxrate 22.1% 24.6%

Expectedincometax 32.6 (7.9)

Utilizationofpreviouslyunrecognizedtaxlosscarry-forwards 0.3 1.6

Effectfromrecognitionofpreviousyearstaxlosses 0.5 1.0

Effectfromfirst-timerecognitionofpreviousyearstemporarydifferences 0.2 –

Effectofnon-recognizedcurrent-yeartaxlosses (1.8) (0.9)

Effectofchangeinapplicabletaxrate 0.4 –

Adjustmentsinrespectofcurrentincometaxofpreviousyears 0.4 –

Effectofincome/(expenses)taxedwithadifferentrateornottaxed (31.0) (0.3)

Effectofexpiry/impairmentofcapitalizedtaxlosses/taxcredits – (1.3)

Total income tax 1.6 (7.8)

Thetotalweightedaverageexpectedincometaxrateof22.1%(previousyear:24.6%)iscalcu-latedusingtheexpectedtaxrates,basedonearningsbeforeincometaxoftheindividualGroupcompaniesineachjurisdiction.Theseratesvarysignificantlyandaccordingly,changesintherelativecontributionofindividualGroupcompaniestototalGroupearningsbeforeincometaxmayimpacttheweightedaverageexpectedincometaxrate.In2016,thesignificanteffectofincome(expense)taxedwithadifferentrateornottaxedrelatesmainlytothetaxeffectofthedivestment(ordisposal)oftheNetworkTestingDivision.

Thedeferredincometaxassetsandliabilitiespertaintothefollowinglineitemsofthebalancesheet:

CHFm 31.12.2016 31.12.2015

Intangibleassets (2.0) 3.8

Inventoriesandworkinprogress 0.9 1.8

Taxlosscarry-forwardsandtaxcredits 2.6 5.8

Otherassetsandliabilites 4.2 3.4

Total 5.7 14.8

Recognizedasdeferredincometaxassets 12.3 19.8

Recognizedasdeferredincometaxliabilities (6.6) (5.0)



TaxlossesamountingtoCHF4.5million(previousyear:CHF2.3million)arerecognizedforGroupcompanieswhichincurredlossesandwherefuturetaxbenefitsareexpectedandsup-portedbyincreasedfutureprofitabilityandsynergiesasaresultofrestructuring.

Taxlosscarry-forwardswhicharenotrecognizedamounttoCHF324.0million(previousyear:CHF328.8million)andexpireinthefollowingyears:

CHFm 31.12.2016 31.12.2015

2016(2015) – 0.6

2017–2021(2016–2020) 2.0 3.3

Later 322.0 324.9

25. EARNINGS PER SHARE

EarningspersharearecalculatedbydividingtheGroupprofit for theperiodattributabletoownersoftheparentbythetime-weightednumberofsharesoutstandingduringthefinancialyear.Ownsharesarenotconsideredasoutstandingshares.

2016 2015

Group profit for the period attributable to owners of the parent (CHFm) (145.7) 24.3

Weighted-averagenumberofoutstandingshares 35,838,486 35,422,077

Earnings per share from Group profit (CHF) (4.07) 0.69

Forthepurposeofcalculatingdilutedearningspershare,theweighted-averagenumberofordinarysharesisadjustedbytheweighted-averagenumberofordinaryshareswhichwouldbeissuedontheconversionofallpotentialdilutiveshareoptionsintoordinaryshares.

2016 2015

Group profit for the period attributable to owners of the parent (CHFm) (145.7) 24.3

Weighted-averagenumberofoutstandingshares 35,838,486 35,422,077

Adjustmentforthedilutivenumberofoutstandingshareoptions 63,417 137,269

Weighted-average number of diluted shares 35,901,903 35,559,346

Diluted earnings per share from Group profit (CHF) (4.06) 0.68



26. SHARE-BASED PAYMENTS

Ascom Share Matching Plans 2014, 2015 and 2016 In2013,theBoardofDirectorsdecidedtointroduceasharematchingplanforAscomseniormanagementasalong-termincentiveinsteadofoptionsplans.Thefollowingtableshowsthedevelopmentofoutstandingmatchingshares:

Number of matching shares

2016


2015


2014

Matching shares outstanding at 1.1. 154,572 97,147 61,720

Granted 42,630 60,550 36,427

Exercised (87,247) – –

Forfeited (1,400) (3,125) (1,000)

Matching shares outstanding at 31.12. 108,555 154,572 97,147

2016 2015 2014

ResolutionpassedbytheBoardofDirectorson 19.08 21.08. 31.03.

NumberofAscomseniormanagementmemberswhodecidedtoparticipate 19 42 36

Vestingperiod(years) 2.78 2.79 3.25

Remainingcontractuallifeofthematchingsharesoutstandingat31.12.(years)1 1.65 1.00 1.90

Fairvalueofthematchingsharesgrantedduringtheyear(CHF)1 16.12 15.36 14.18

Personnelexpensesforequity-settledmatchingsharesrecognized asotherreserves(equity)(CHFm)

(0.4) (0.2) (0.1)

1 At weighted average.

Ascom Stock Option Plans 2012At31December2016,optionsfromtheAscomStockOptionPlan2012werestilloutstanding.Inthefollowingtable,thedevelopmentofoutstandingoptionsispresented:

Number of options

2016

Exercise price (CHF) 1

2016

Number of options

2015

Exercise price (CHF) 1

2015

Options outstanding at 1.1. 98,000 11.39 807,177 11.86

Exercised (58,232) 13.02 (682,177) 11.86

Forfeited – – (27,000) 13.67

Options outstanding at 31.12. 39,768 9.00 98,000 11.39

Optionsexercisableat31.12. 39,768 9.00 98,000 11.39


2016 2015

Rangeofexercisepricesoftheoptionsoutstandingat31.12.(CHF) 9.00 9.00–15.00

Remainingcontractuallifeoftheoptionsoutstandingat31.12.(years)1 0.30 0.89

Sharepriceoftheoptionsexercisedduringtheyear(CHF)1 14.26 17.16

Personnelexpensesforequity-settledoptionsrecognizedas otherreserves(equity)(CHFm)

– (0.1)

Personnelexpensesforcash-settledoptionsrecognizedasliability(CHFm) – (0.2)




27. TRANSACTIONS WITH RELATED PARTIES

AlegallyindependentfundprovidesforSwisspensions(seenote2.18).In2016and2015,noleasepaymentsweredisbursedtotheSwisspensionfundforpremisesoccupiedbytheGroupandnoadministrativeandfacilitymanagementservices(previousyear:nil)werechargedtotheSwisspension fund in theyearunder review.TheSwisspension funddidnotownanyAscomsharesin2016(previousyear:nil).

In2016,therewasnoothertransactionwithrelatedparties(previousyear:nil).

28. RISK MANAGEMENT

Asaninternationalcompany,Ascomisexposedtoavarietyoffinancialandnon-financialrisksthat aredirectly associatedwith theGroup’sbusinessoperations. TheGroup’soverall riskmanagementisanintegralpartofcorporatemanagementandthelong-termcorporatestrat-egy,andiscorrespondinglyincorporatedintheoverallriskandcontrolframeworkofourbusi-nessprocessesandprocedures.TheBoardofDirectorsofAscomreviewstheGroup-wideriskassessmentannuallyanddeterminessuitablemeasurestoaddresstherisks.

FinancialriskmanagementiscarriedoutcentrallybyGroupTreasuryandisensuredbytherelevantwrittenprinciplesandguidelineslaiddownbymanagementandapprovedbytheBoardofDirectors.TheGroup’sfinancialriskcapacityandappetiteforthevariousfinancialriskfactorsaredefinedinthetreasurystrategy.Thetreasurystrategyspecifiesthelimitarchitectureandtherebydefinestheextenttowhichriskexposureswillbehedged,andtheinstrumentsandtimeframeforimplementation.Thetreasurystrategyisreviewedannuallyandrevised,asappropriate,bytheAuditCommittee.TransactionswithoutunderlyingcorebusinessandallformsofspeculationareprohibitedwithrareexceptionsapprovedbytheGroupCFOandbytheAuditCommitteewhererequiredbylocalcircumstances.RiskmanagementalsoinvolvescentrallysecuringcomprehensiveandefficientinsuranceprotectionfortheGroup.

28.1 Liquidity riskTheobjectiveofliquidityriskmanagementistoensurethatsufficientfinancialresourcesareavailableatanypoint intimeinordertobeabletocompletelyandtimelyfulfillallpaymentobligationsoftheGroupandtosecureworkingcapitalfinancingintheordinarycourseofbusi-ness.Aspartofitsintegralbudgetingandforecastingprocess,GroupTreasurymonitorstheplanned liquidity position and centrallymanages the procurement of loans for the Group. Adescriptionofavailablecreditfacilitiesandoutstandingborrowingscanbefoundinnote12.

28.2 Foreign currency riskDuetotheglobalnatureofitsactivities,theGroupisexposedtoforeignexchangerisk.Foreignexchangegainsorlossesarisefromtransactionsaswellasfromassetsandliabilitiesdenomi-natedinforeigncurrencies(mainlyEUR,USD,SEKandGBP)ifthesearenottheentity’sfunc-tional currency.GroupTreasury is responsible formanagingGroup-wide foreignexchangetransactionriskonanongoingbasis.Analysesofpastandexpectedfuturecashflowsinforeigncurrenciesareregularlycarriedoutwhich is thebasis forhedgingtransactions.Respectiveforwardcontractsarestatedat fairvalue.AllhedgingactivitiesarecarriedoutcentrallybyGroupTreasury.TheGroupperiodicallyreassessesitsnetforeigncurrencyrisk,evaluatingtheextentofnaturalforeigncurrencyhedgingachievedthroughongoingdevelopmentofAscom’sbusinesses.Accordingly,GroupTreasurymayproposetoadapttheGroup’shedgingapproach.TheGrouphascertain investments in foreignoperationswhosenetassetsareexposedtoforeigncurrencytranslationrisk.Thesetypesoftranslationriskarecurrentlynothedged.



Thecurrency-relatedsensitivityoftheGroupatyear-endisshowninthefollowingtable:

CHFm Reasonable shift

31.12.2016

Impact on net result

31.12.2016

Impact on equity

31.12.2016

Reasonable shift

31.12.2015

Impact on net result

31.12.2015

Impact on equity

31.12.2015

EUR/CHF +/−15% −/+1.9 −/+5.9 +/−15% −/+3.2 −/+6.5

USD/CHF +/−15% +/−2.0 +/−2.7 +/−15% +/−1.7 +/−2.4

SEK/CHF +/−15% −/+1.5 +/−1.8 +/−15% +/−6.5 +/−15.5

GBP/CHF +/−15% +/−0.0 +/−0.2 +/−15% +/−0.2 +/−0.7

EUR/SEK +/−15% +/−0.1 +/−0.1 +/−15% +/−1.4 +/−1.4

USD/SEK +/−15% +/−0.1 +/−0.1 +/−15% +/−2.8 +/−2.8

28.3 Interest rate riskEveryinterestpositionissubjecttoeitheracashflowinterestrisk(associatedwithfloatingratepositions)oramarketvaluerisk(fromfixedinterestpositions).Therevolvingmulti-currencyloanfacilityoftheGroup(seenote12) isthemaininterestrateriskpositioninthebalancesheet ofAscom.Thisriskiscurrentlyoffsetwithcashsurpluses.Accordingly,interestrateriskiscur-rentlynothedged.FinancingandrelatedinterestaremanagedcentrallybyGroupTreasury.

28.4 Credit riskCreditriskarisesfromcashandcashequivalents,derivativefinancialinstrumentsanddepositswithbanksandfinancialinstitutions,aswellascreditexposuretocustomers,includingoutstand-ing receivablesandcommitted transactions.Credit riskmay result inafinancial loss ifonepartyinatransactionisunableorunwillingtomeetitsobligations.ItisAscom’sobjectivetolimittheimpactofadefault.CreditriskoffinancialcounterpartiesismanagedcentrallybyGroupTreasury.EachGroupcompanyisresponsibleforanalyzingthecreditriskforeachoftheirnewcustomersandmanagingthequalityoftheirtradereceivablesonanongoingbasis.

28.5 Capital riskTheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcern inorder toprovide returns for the shareholdersandbenefits forotherstakeholdersandtomaintainanoptimally leveragedcapitalstructuretoreducethecostofcapital.Ascomaimstomaintainastableinvestmentgraderatinglevelasperceivedbybankpartnersanddebtinvestors.

Foritscapitalmanagement,theGroupmonitorsthefollowingratios:

CHFm 31.12.2016 31.12.2015

Netdebt/(cash)includingoutstandingbankguarantees1 (18.5) (37.3)

EBITDA 16.9 43.8

Debt service ratio (1.1) (0.9)

Totalassets 225.1 286.4

Shareholders’equity 80.9 116.7

Equity ratio 35.9% 40.7%

1 Borrowings and outstanding bank guarantees less cash and cash equivalents.



29. DERIVATIVE FINANCIAL INSTRUMENTS

ForeigncurrenciesarepurchasedandforwardcontractsareenteredintoatGrouplevelasaneconomichedgeagainst foreigncurrency risk.Theopencontracts comprise the followingforwardcontractsinvariouscurrencies:

CHFm 31.12.2016 31.12.2015

Contractvolume 16.8 55.4

Positivefairvalue1 0.1 1.2

Negativefairvalue2 0.4 0.8

1 Refer to note 7.2 Refer to note 13.

Breakdown by currency (CHFm) 31.12.2016 31.12.2015

EUR/CHF 7.4 21.5

SEK/CHF 9.4 27.1

USD/CHF – 6.8

Total 16.8 55.4

30. COMMITMENTS AND CONTINGENCIES

a)Leasecommitments–GroupaslesseeThefutureminimumpaymentsundernon-cancellableleaseobligationsfalldueasfollows:

CHFm Operating leases

31.12.2016 31.12.2015

Within12months 5.9 6.7

Between1and5years 9.8 11.5

Later 0.7 1.8

Total 16.4 20.0

b)Leasecommitments–GroupaslessorThefutureminimumleasereceivablesundernon-cancellableoperatingleasesareasfollows:

CHFm Operating leases

31.12.2016 31.12.2015

Within12months 1.0 0.4

Between1and5years 0.5 0.5

Later – –

Total 1.5 0.9



c)ContingenciesAscomisexposedtoamultitudeoflegalrisksinternationallyinthenormalcourseofbusiness.Theserelateparticularlytorisksassociatedwithproductliability,patentlaw,taxlaw,competi-tionlawandexecutedbusinessacquisitionsanddisposal.TheCompanyhasindemnifiedcer-tainpurchasersofdivestedbusinessesforpotentialclaimsarisingfromtheoperationsofthedivestedbusinesses.Therearecurrentlynoongoingproceedingsinrelationtosuchindemni-fication.SomeGroupcompaniesare involved in legalproceedings.Theresultsofcurrentlypendingandthreatenedlawsuitscannotbepredictedwithcertaintywhichmeansthatdecisionsofcourtsorotherauthoritiescancauseexpensesthathavesignificantconsequencesforthebusinessandonfutureresults.Whereverareliableestimateofthefinancialconsequencesofapasteventispossibleandanoutflowofresourcesismorelikelythannot,acorrespondingprovisionismade.At31December2016,contingentliabilitiesamounttoCHF4.7million(previ-ousyear:CHF3.1million).Thereisnoindicationthattheseliabilitieswillleadtofulfillmentpay-ments.

31. PLEDGED ASSETS

At31December2016,property,plantandequipmentwithatotalcarryingamountofCHF2.2million(previousyear:CHF2.9million),andcashandcashequivalentswithatotalcarryingamountofCHF0.2 million(previousyear:CHF0.2million)werepledged.

32. EVENTS AFTER THE BALANCE SHEET DATE

Sincethebalancesheetdate,noothersubsequentadjustingeventshaveoccurredthatimpactthe2016consolidatedfinancialstatements.

33. PROPOSAL OF THE BOARD OF DIRECTORS

Fortheyearended31December2016,theBoardofDirectorsproposestotheAnnualGeneral Meetingon19April2017adividendofCHF0.80pershareentitledtodividends.Thisrepresentsa totaldistributionuptoCHF28.8million. In2016,a totaldividendofCHF16.2millionwas distributedtotheshareholdersofAscomHoldingAG.

34. TIME OF RELEASE FOR PUBLICATION

TheBoardofDirectorsapprovedthe2016consolidatedfinancialstatementson22February2017andauthorizedthemforpublicationatthemediaconferenceon9March2017.



35. CONSOLIDATED COMPANIES

Country Company Registered office Business activities

Share capital Parent company Group’s interest

Australia GTMResourcesPty.Ltd. Chippendale ● AUD 3 AscomHoldingAG 100%

AscomIntegratedWirelessPty.Ltd. Chippendale ■ AUD 3,000,000 GTMResourcesPty.Ltd. 100%

Belgium Ascom(Belgium)NV Brussels ■ EUR 1,424,181 AscomHoldingAG 100%

Brazil AscomSoluçõesemTelefoniaMóvelLimitada1

SãoPaulo ■ BRL 1,000 Ascom(Sweden)HoldingAB1 100%

China Ascom(Beijing)NetworkTestingServiceCo.,Ltd.1

Beijing ■★ CNY 17,000,000 Ascom(Sweden)HoldingAB1 100%

Denmark AscomDanmarkA/S Glostrup ■ DKK 1,200,000 AscomHoldingAG 100%

Finland AscomMiratelOy Turku ■ EUR 33,638 AscomHoldingAG 100%

France AscomHoldingSA2 Nanterre _ EUR 80,000 AscomHoldingAG 100%

Ascom(France)SA Nanterre ■ EUR 2,000,000 AscomHoldingAG 100%

Germany AscomDeutschlandGmbH Frankfurta.M. ■ EUR 2,137,200 AscomUnternehmensholdingGmbH

100%

TechnologieparkTeningenGmbH Emmendingen ☐ EUR 6,136,000 AscomUnternehmensholdingGmbH

94%

AscomSolutionsLtd. 6%

AscomUnternehmensholdingGmbH Frankfurta.M. ● EUR 5,113,000 AscomHoldingAG 100%

India AscomNetworkTestingPrivateLimited1 Mumbai ■ INR 64,929,938 Ascom(Sweden)HoldingAB1 100%

Italy AscomUMSs.r.l. Scandicci ■ EUR 100,000 AscomSolutionsLtd. 100%

Malaysia AscomNetworkTestingSdnBhd1 SubangJaya ■★ MYR 500,000 Ascom(Sweden)HoldingAB1 100%

Ascom(Malaysia)SdnBhd Ampang ■ MYR 1,000,000 AscomHoldingAG 100%

Netherlands Ascom(Nederland)BV3 Utrecht ■ EUR 1,361,000 AscomSolutionsLtd. 100%

Norway Ascom(Norway)A/S Oslo ■ NOK 1,250,000 AscomSolutionsLtd. 100%

Poland AscomPolandSp.zo.o.2 Warsaw _ PLN 2,405,200 AscomHoldingAG 100%

Singapore AscomSolutions(Singapore)PteLtd Singapore ■ SGD 50,000 AscomSolutionsLtd. 100%

South Africa AscomNetworkTesting(PTY)Ltd.1 Durban ■ ZAR 1,000 Ascom(Sweden)HoldingAB1 100%

Sweden Ascom(Sweden)AB Gothenburg ■★ SEK 96,154,000 AscomHoldingAG 100%

Ascom(Sweden)HoldingAB1 Gothenburg ● SEK 70,000,000 AscomHoldingAG 100%

AscomNetworkTestingAB1 Skellefteå ♦■★ SEK 100,000 Ascom(Sweden)HoldingAB1 100%

Switzerland AscomHoldingAG Baar ● CHF 18,000,000 n/a 100%

AscomManagementLtd. Baar ● CHF 200,000 AscomHoldingAG 100%

MocsaAGinLiquidation Berne _ CHF 100,000 AscomHoldingAG 100%

AscomSolutionsLtd. Mägenwil ■ CHF 10,000,000 AscomHoldingAG 100%

United Kingdom

AscomNetworkTestingLtd.1 Elstead ■★ GBP 2 AscomUKGroupLtd.2 100%

Ascom(UK)Ltd. Birmingham ■ GBP 50,000 AscomSolutionsLtd. 100%

AscomUKGroupLtd.2 Birmingham ● GBP 600,000 AscomHoldingAG 100%

UAE AscomMEAFZ-LLC1 Dubai ■ AED 50,000 Ascom(Sweden)HoldingAB1 100%

AscomMEAFZE1 Dubai ■ AED 50,000 Ascom(Sweden)HoldingAB1 100%

USA AscomHoldingInc.2 RockawayNJ _ USD 10 AscomHoldingAG 100%

Ascom(US)Inc. MorrisvilleNC ■★ USD 1 AscomSolutionsLtd. 100%

AscomNetworkTestingInc.1 RestonVA ♦■★ USD 1 AscomHoldingAG 100%

1 This company was sold in September 2016 (refer to note 3).2 This company was liquidated in 2016.3 Ascom Tateco BV was merged into Ascom (Nederland) BV in January 2016.

ThefollowingdescribethevarioustypesofentitieswithintheGroup:

●Holding/Finance:Thisentityisaholdingcompanyand/or performsfinancefunctionsandprovidesmanagementservices.

■Sales:Thisentityperformssales,installation,maintenance andmarketingactivities.

♦ Production:Thisentityperformsmanufacturingand/orproductionactivities.

★ResearchandDevelopment:Thisentityperformsresearch anddevelopmentactivities.

☐Realestate:Thisentityperformsrealestateactivities.

–Other:Thisentityisdormantorinliquidation.


76 ASCOMFINANCIALSTATEMENTS2016 GROUP REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor to the General Meeting of Ascom Holding AG, Baar

Report on the audit of the consolidated financial statements

Opinion WehaveauditedtheconsolidatedfinancialstatementsofAscomHoldingAGanditssubsidi-aries(theGroup),whichcomprisetheconsolidatedbalancesheetasat31December2016andtheconsolidatedincomestatement,consolidatedstatementofchangesinequityandconsoli-datedcashflowstatementfor theyearthenended,andnotestotheconsolidatedfinancialstatements,includingasummaryofsignificantaccountingpolicies.

Inouropinion,theconsolidatedfinancialstatements(pages44to75)giveatrueandfairviewoftheconsolidatedfinancialpositionoftheGroupasat31December2016anditscon-solidatedfinancialperformanceand itsconsolidatedcashflows for theyear thenended inaccordancewithSwissGAAPFERandcomplywithSwisslaw.

Basis for opinionWeconducted our audit in accordancewith Swiss law andSwissAuditing Standards.Our responsibilitiesunderthoseprovisionsandstandardsarefurtherdescribedinthe“Auditor’sresponsibilitiesfortheauditoftheconsolidatedfinancialstatements”sectionofourreport.

WeareindependentoftheGroupinaccordancewiththeprovisionsofSwisslawandthe requirements of the Swiss audit profession andwe have fulfilled our other ethical responsibilitiesinaccordancewiththeserequirements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

Our audit approach

Overview■■ OverallGroupmateriality:CHF1,800,000■■ Weconcludedfullscopeauditworkat6reportingentitiesin5countries.Thisauditscopeaddressedover60%oftheGroup’srevenue.

■■ Inaddition,specifiedauditprocedureswereperformedonafurther3reportingentitiesin3countriesrepresenting16%oftheGroup’srevenue.

Askeyauditmatterthefollowingareaoffocushasbeeniden-tified:

■■ DeconsolidationofNetworkTestingdivision

Keyauditmatters

Materiality

Auditscope


77ASCOMFINANCIALSTATEMENTS2016 GROUP REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS

Audit scopeWedesignedourauditbydeterminingmaterialityandassessingtherisksofmaterialmisstate-mentintheconsolidatedfinancialstatements.Inparticular,weconsideredwheresubjectivejudgementsweremade;forexample,inrespectofsignificantaccountingestimatesthatinvolvedmakingassumptionsandconsideringfutureeventsthatareinherentlyuncertain.Asinallofouraudits,wealsoaddressedtheriskofmanagementoverrideofinternalcontrols,includingamongothermattersconsiderationofwhethertherewasevidenceofbiasthatrepresentedariskofmaterialmisstatementduetofraud.

Wetailoredthescopeofourauditinordertoperformsufficientworktoenableustopro-videanopinionontheconsolidatedfinancialstatementsasawhole,takingintoaccountthestructureoftheGroup,theaccountingprocessesandcontrols,andtheindustryinwhichtheGroupoperates.In2016,theGroupwasprimarilystructuredintwodivisions,WirelessSolutionsandNetworkTestingdivisions,thelatterofwhichwasdisposedofin2016.TheGroupfinancialstatementsareaconsolidationofover30reportingentities.Weidentified6reportingentitiesthat, inourview,requiredafullscopeaudit.Togiveappropriatecoverageoverallmaterial financialstatementlineitems,weidentified3additionalreportingunitsthat,inourview,requiredspecifiedauditproceduresoversignificantbalancesand transactions including revenue. Intotal,weperformedauditproceduresfor76%ofconsolidatedrevenue.

Fortheremainingcomponents,weperformedotherprocedurestotestorassessthattherewerenosignificantrisksofmaterialmisstatementinthesecomponentsinrelationtotheGroupfinancialstatements.

ToensuresufficientandappropriateinvolvementoftheGroupteam,weheldconferencecallswith selected component teams responsible for full scope audits and specified auditproceduresduringthedifferentphasesoftheaudit.Wediscussedtherisksidentifiedandchal-lengedtheauditapproachinsignificantriskareasrelevanttothosecomponents.Furthermore,weobtainedamemorandumofexaminationfromallfullscopecomponentteamsandassessedtheresultsandimpactontheGroupfinancialstatementsandchallengedtheirconclusions.

MaterialityThescopeofourauditwasinfluencedbyourapplicationofmateriality.Ourauditopinionaimstoprovidereasonableassurancethattheconsolidatedfinancialstatementsarefreefrommate-rialmisstatement.Misstatementsmayariseduetofraudorerror.Theyareconsideredmaterialifindividuallyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheconsolidatedfinancialstatements.

Basedonourprofessionaljudgement,wedeterminedcertainquantitativethresholdsformateriality,includingtheoverallGroupmaterialityfortheconsolidatedfinancialstatementsasawholeassetoutinthetablebelow.These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofourauditandthenature,timingandextentofourauditproceduresandtoevaluatetheeffectofmisstatements,bothindividuallyandinaggregateonthecon-solidatedfinancialstatementsasawhole.


78 ASCOMFINANCIALSTATEMENTS2016 GROUP REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS

Overall Group materiality CHF1,800,000

How we determined it 5%ofadjustedprofitbeforetax(3-yearaverage)

Rationale for the materiality benchmark applied Wechoseadjustedprofitbefore taxas thebenchmark. Inour view,profitbeforetax is thebenchmarkagainstwhichtheperformanceoftheGroupismostcommonlymeasured,andisthegenerallyexpectedbenchmarkforprofit-orientedcompanies.Adjustmentsweremadetoaddbackcertainitemsthatwerenotrelatingtoongoingoperations.DuetothefluctuationinAscom’sprofitbeforetaxoverthelastyears,weconsidered itappropriate toutilizeanaverageofadjustedprofitbeforetaxforthelast3years.

We agreedwith the Audit Committee that wewould report to themmisstatements above CHF180’000identifiedduringourauditaswellasanymisstatementsbelowthatamountwhich,inourview,warrantedreportingforqualitativereasons.

Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight AuthorityKeyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignifi-canceinourauditoftheconsolidatedfinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditoftheconsolidatedfinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

Key audit matter How our audit addressed the key audit matter

Deconsolidation of Network Testing divisionAsoutlinedonpage49(summaryofthegeneralgroupac-countingpolicies,note2.4)andpage55(note3significanttransactionsandchanges in thescopeofconsolidation)ofthe consolidated financial statements, Ascom sold itsNet-workTestingdivisionduringtheyearunderaudit. Duetothemagnitudeofthesaleandrelatedloss,thecom-plexityoftheaccountingforthesale(cut-offofoperatingac-tivities, recycling of previously recorded goodwill and cur-rency translation difference in equity and various termswithinthesalesagreements)andtheimpactofthetransac-tionon theconsolidatedfinancial statements,wehavead-dressedthistransactionasakeyauditmatter.

Wetestedthecalculationofthelossbyperformingthefol-lowing:■ We tested the completeness and accuracy of recycledgoodwillandcurrencytranslationdifferencefromthedis-posal by reperformance of the calculation prepared bymanagement.

■ Totestthenetassetsdisposed,weperformedafullscopeauditofthemostsignificantlegalentitydisposed,specifiedaudit proceduresover selectedpositions in thebalancesheet and income statement of another significant legalentitydisposedandanalyticalproceduresontheremaininglegalentitiesdisposedasatand for the9-monthperiodended30September2016,thedateofthedisposal.

■ We read the sales agreement and obtained supportingdocumentationandotherevidenceto test theconsider-ationreceived,provisionsrecorded,indemnitiesrecordedandcostsofdisposal.

Fromtheauditproceduresoutlinedabove,wedidnotiden-tifyanymaterialmisstatementswithrespecttotherecycledgoodwill and currency translation, the cut-off of operatingactivities,thecalculationofthelossnorthepresentationofthedivestitureinthefinancialstatementsasawhole.


79ASCOMFINANCIALSTATEMENTS2016 GROUP REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS

Responsibilities of the Board of Directors for the consolidated financial statementsTheBoardofDirectorsisresponsibleforthepreparationoftheconsolidatedfinancialstate-mentsthatgiveatrueandfairviewinaccordancewithSwissGAAPFERandtheprovisionsofSwisslaw,andforsuchinternalcontrolastheBoardofDirectorsdeterminesisnecessarytoenablethepreparationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstate-ment,whetherduetofraudorerror.

Inpreparingtheconsolidatedfinancialstatements,theBoardofDirectorsisresponsibleforassessingtheGroup’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mat-tersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheBoardofDirectorseither intendstoliquidatetheGrouportoceaseoperations,orhasnorealisticalternativebuttodoso.

Auditor’s responsibilities for the audit of the consolidated financial statementsOurobjectivesaretoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithSwisslawandSwissAuditingStandardswillalwaysdetectamaterialmisstatementwhenitexists.Misstate-mentscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggre-gate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseconsolidatedfinancialstatements.

Afurtherdescriptionofourresponsibilitiesfortheauditoftheconsolidatedfinancialstate-ments is locatedat thewebsiteofEXPERTsuisse:http://expertsuisse.ch/en/audit-report-for-public-companies.Thisdescriptionformspartofourauditor’sreport.

Report on other legal and regulatory requirementsIn accordancewith article 728a paragraph 1 item3COandSwissAuditing Standard 890, weconfirmthataninternalcontrolsystemexistswhichhasbeendesignedforthepreparationofconsolidatedfinancialstatementsaccordingtotheinstructionsoftheBoardofDirectors.

Werecommendthattheconsolidatedfinancialstatementssubmittedtoyoubeapproved.





80 ASCOM FINANCIAL STATEMENTS 2016 GROUP SUMMARY OF KEY FINANCIAL DATA

CHFm 2016 2015 2014 2013 1 2012 1

Incoming orders 360.4 412.5 450.4 478.0 436.4

Order backlog 2 121.8 135.2 150.4 137.3 122.0

Net revenue 354.3 410.8 437.7 459.7 449.8

EBITDA 16.9 43.8 64.8 67.6 49.0

Earnings before interest and income tax (EBIT) 1.3 27.3 47.6 47.6 26.5

Personnel expenses (172.5) (178.9) (183.1) (190.0) (195.4)

Depreciation, amortization and impairment (15.6) (16.5) (17.2) (20.0) (22.5)

Group profit/(loss) for the period (145.7) 24.3 37.5 36.9 21.8

Net cash flow from operating activities 6.0 33.3 46.5 63.3 5.4

Capital expenditures on property, plant and equipment 4.1 4.2 4.4 2.8 3.2

Capital expenditures on intangible assets 18.3 9.0 9.2 5.8 3.4

Research and development expenditures 3 (46.4) (47.8) (48.7) (46.4) (49.8)

Balance sheet total 2 225.1 286.4 313.4 477.8 521.5

Shareholders’ equity 2 80.9 116.7 107.9 246.4 166.8

Shareholders’ equity in % of balance sheet total 2 35.9 40.7 34.4 51.6 32.0

Net cash/(net debt) 2, 4 24.1 37.3 27.1 (2.9) (41.3)

Gearing in % 5 12.6 17.2 21.4 24.8 62.6

Dividends paid/distribution of share premium 16.1 15.8 14.0 12.2 8.6

Number of employees (FTE) 2 1,188 1,658 1,696 1,586 1,771

1 Key figures according IFRS based on income, expenses or cash flows are derived from continuing operations.2 At 31 December.3 Contains research and development expenditures either charged to profit or loss or recognized as intangible assets.4 Cash and cash equivalents less borrowings.5 Borrowings/shareholders’ equity.

Summary of key financial data


81ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG BALANCE SHEET

Assets

CHF 1,000 31.12.2016 31.12.2015

Cashandcashequivalents 6,319 10,606

Othercurrentreceivables

Groupcompanies 1,319 1,953

Thirdparties 7,929 488

Prepaidexpenses – 12

Total current assets 15,567 13,059

Financialassets



InvestmentsinGroupcompanies 424,846 454,692

Total non-current assets 459,526 534,229

Total assets 475,093 547,288

Liabilities and shareholders’ equity

CHF 1,000 31.12.2016 31.12.2015

Currentinterest-bearingliabilities

Thirdparties – 20,000

Othercurrentliabilities

Groupcompanies 1,231 693


Accruedexpenses 397 587

Total current liabilities 3,708 21,450

Non-currentinterest-bearingliabilities


Thirdparties 10,000 –

Non-currentprovisions 4,298 1,374

Total non-current liabilities 52,705 34,122

Sharecapital 18,000 18,000

Legalreservefromcapitalcontribution 1,123 1,123

Otherlegalreserve 5,400 5,400

Retainedearningsavailablefordistributionattheendoftheyear

Retainedearnings 453,417 416,220

Profit/(loss)oftheperiod (58,214) 53,318

TreasurysharesheldbyAscomHoldingAG (1,046) (2,345)

Total shareholders’ equity 418,680 491,716

Total liabilities and shareholders’ equity 475,093 547,288

Balance sheet


82 ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG INCOME STATEMENT

CHF 1,000 2016 2015

InvestmentincomefromGroupcompanies 6,346 51,048

Otherincome 3,505 4,116

Total ordinary income 9,851 55,164

Administrationexpenses (6,547) (5,944)

Valueadjustmentsoninvestmentsandloans (4,131) (1,413)

Total operating income (827) 47,807

Financialexpenses (4,142) (1,095)

Financialincome 1,898 7,173

Lossfromdisposalofbusiness (55,039) –

Profit/(loss) before tax (58,110) 53,885

Incometaxes (104) (567)

Profit/(loss) for the period (58,214) 53,318

Income statement


83ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG NOTES TO THE ANNUAL FINANCIAL STATEMENTS

1. GeneralAscomHoldingAG,Baar,whichislistedontheSIXSwissExchangeinZurich(Switzerland),istheholdingcompanyoftheAscomGroup.Thefinancialstatementscomplywiththerequire-ments of the Swiss accounting legislation of the SwissCodeofObligations (SCO). AscomHoldingAGispresentingconsolidatedfinancialstatementsaccordingtoSwissGAAPFER.Asaresult,thesefinancialstatementsandnotesdonotincludeadditionaldisclosuresandcashflowstatement.

2. Accounting policiesNon-current assets, namely investments and financial assets, are recognized at cost less necessaryvalueadjustments.Currencydifferencesresultingfromtherevaluationofloansinforeigncurrenciesarechargedtotheincomestatement.Provisionsarerecordedforunrealizednetcurrencygains.ThevaluationofinvestmentsinGroupcompaniesisperformedaccordingagroupassessmentatdivisionallevelasopposedtoatindividualGroupcompanylevel.Currentassetsarevaluedatnominalvaluelessnecessaryvalueadjustments.Liabilitiesarevaluedatnominalvalue.Effectsfromforeigncurrenciesarechargedtotheincomestatement.Provisionsaremadetocovergeneralbusinessrisksof theGroup.Derivativefinancial instrumentsareusedforhedgingpurposes.Theseinstrumentsarevaluedatfairvalue.

Treasurysharesareinitiallyrecognizedatcost,deductedfromequityandarevaluedathistoricalacquisitionvaluewithoutsubsequentvaluationadjustment.Gainsorlossesrelatedthedisposaloftreasurysharesarerecordedintheincomestatement.

InvestmentincomeconsistsmainlyofdividendpaidbyGroupcompaniesandisrecognizedonapproval’sdateoftheAnnualGeneralMeeting.

3. Contingent liabilitiesOutstandingparentguaranteesinrespectofthirdpartiestotalCHF47.8million(previousyear:CHF52.0million).

4. InvestmentsDirectandindirectinvestmentsarelistedinnote35oftheconsolidatedfinancialstatements.

5. Pledged assetsAt31December2016,nodirectlyheldassetsarepledged(previousyear:nil).

6. Foreign currenciesTheexchangeratesusedforbalancesheet itemsaretheratesprevailingon31December; theexchangeratesusedfortransactionsconductedduringthecourseoftheyearandforitemsintheprofitandlossstatementareaverageratesforthe2016financialyear.

7. Number of full-time equivalentsThenumberoffull-timeequivalentsdidnotexceed10onanannualaveragebasis.

Notes to the annual financial statements


84 ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG NOTES TO THE ANNUAL FINANCIAL STATEMENTS

8. Treasury sharesTreasurysharesheldbyAscomHoldingAG(SwissCodeofObligationsArt.659)havedevelopedasfollows:

CHFm Number 2016 Amount 2016 Average transaction price

Number 2015 Amount 2015 Average transaction price

Balance at 1.1. 220,894 2.3 10.62 890,894 9.2 10.33

Additions 975 – 17.92 13,185 0.2 17.72

Disposals (123,794) (1.3) 10.64 (683,185) (7.1) 10.41

Balance at 31.12. 98,075 1.0 10.66 220,894 2.3 10.62

9. Significant shareholdersThefollowingsignificantshareholder(holding5%ormoreofvotingrights,asdefinedbyArt.663coftheSwissCodeofObligations)wasrecordedintheshareregisterat31 December2016:VeraisonSICAV,Zurich,Switzerland(7.62%).

Thisdoesnotcovershares,whicharenotregisteredintheshareregister(disposhares).Disposharesamountedto35.23%asof31December2016(previousyear:43.39%).

Inaccordancewith thedisclosureannouncementsmade, the followingpartiesare re-gardedassignificantshareholdersasdefinedbyArt.663coftheSwissCodeofObligations:

Announcement date Shareholder % of voting rights held in Ascom securities

30.04.2014 NorgesBank,Oslo,Norway 3.16%

11.12.2015 Schrodersplc,London,UK 5.068%

04.03.2016 VeraisonSICAV,Zurich 5.0176%

27.08.2016 UBSFundManagement(Switzerland)AG,Basel,Switzerland 5.32%

13.09.2016 CreditSuisseFundsAG,Zurich,Switzerland 3.30%

24.09.2016 BlackRockInc.,NewYork,USA 2.69%

15.12.2016 SterlingStrategicValueLtd.,Tortola,BritishVirginIslands 3.8652%

Therearenoknownshareholders’agreements.Additionaldetailsaredisclosed in thefirstchapteroftheCorporateGovernanceReport(refertopage14).


85ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG NOTES TO THE ANNUAL FINANCIAL STATEMENTS

10. Participations

Number of participations which were held by members of the Board of Directors Shares 1

2016 2015

JuhaniAnttila,Chairman 80,000 90,000

DrJ.T.Bergqvist 20,000 10,000

DrHaraldDeutsch 2,000 2,000

AndreasUmbach 41,750 33,750

Total Board of Directors 143,750 135,750

1 Acquired by the Board members from the market.

Number of participations which were held by members of the Executive Board Shares 1 Employee options (exercisable) 3

Shares 1 Employee options (exercisable) 3

2016 2015

HolgerCordes,CEO 18,500 – – –

BiankaWilson,CFO 5,870 – 4,470 –

ClaesÖdman,COO 595 – 595 –

FrancisSchmeer,HeadofMarketing & BusinessDevelopment 550 – 550 –

FritzMumenthaler,formerCEO – – 58,000 32,000

RikardLundqvist,formerGMNT – – 7,3052 –

Total Executive Board 25,515 – 70,920 32,000

1 Acquired by the members of the Executive Board from the market.2 Phantom shares.3 According to the provisions of the Ascom stock option plan 2012. Ratio 1:1.

NomembersoftheBoardofDirectorsorcloselyrelatedpartiesholdanyconversionoroptionrights.Additionaldetailsaredisclosed in insection IIIof theRemunerationReport (refer topages38to39).

11. Events after the balance sheet dateSincethebalancesheetdate,nosubsequentadjustingeventshaveoccurredthatimpactthe2016financialstatements.

12. Time of release for publicationTheBoardofDirectorsapprovedthe2016statutoryfinancialstatementson22February2017andauthorizedthemforpublicationatthemediaconferenceon9March2017.


86 ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG COMMENTS ON THE FINANCIAL STATEMENTS

AssetsInvestmentsincludesharesinGroupcompaniesamountingtoCHF424.8million(previousyear:CHF454.7million).ThedecreaseofCHF29.8millionininvestmentsismainlyduetothedis-posalof theNetworkTestingDivision.Furthermore,valueadjustmentson investmentsandGrouploansintheamountofCHF4.1millionwereperformed(previousyear:CHF1.4million).

Intheyearunderreview,loanstoGroupcompaniesdecreasedbyCHF56.5million,alsomainlyduetothedisposaloftheNetworkTestingDivision.TheremainingloansaremainlydenominatedinCHF,EUR,andUSD.FinancialassetsfromthirdpartiescomprisemainlythesubordinatedvendorloanamountingtoCHF11.6millionatactualvalue(havinganominalvalueofUSD15million,a7-yearmaturityandastatedinterestrateof4%p.a.)grantedinconnectionwiththedisposaloftheNetworkTestingDivision.

OthercurrentreceivablesfromGroupcompaniesconsistmainlyofshort-termreceivablesdenominatedinCHF,EUR,USDandSEK.Othercurrentreceivablesfromthirdpartiescomprisemainly the final purchaseadjustments (denominated inUSD) related to thedisposalof theNetworkTestingDivision,inaccordancewiththeshareandpurchaseagreement.

Liabilities and equityIntheyearunderreview,totalloansfromGroupcompaniesincreasedbyCHF5.7million.

BankloanscompriseamountsdrawnunderavailablerevolvingmulticurrencyloanfacilitiesinanaggregateamountofCHF35.0milliondenominatedinCHF.Thefinalmaturitydateoftheloanfacilitiesis24May2020.

Accruedexpensesaremainlyrelatedtoderivativefinancialinstruments.

Income statementInvestmentincomerepresentsdividendpaymentsandliquidationproceedsfromGroupcom-panies.

Financial income consists mainly of interest income from loans to Group companies ofCHF 1.2million(previousyears:CHF1.4million)andprofitfromsaleoftreasurysharesof CHF0.4million(previousyear:CHF1.8million).

Intheyearunderreview,valueadjustmentsoninvestmentsandloansinGroupcompaniesamountedtoCHF4.1million(previousyear:CHF1.4million).

OtherincomecomprisestrademarkfeeschargedtoGroupcompaniesofCHF3.5million(previousyear:CHF4.1million).

FinancialexpensesconsistmainlyofinterestofCHF0.2millionpaidtobanksandGroupcompanies,aswellasbankchargesofCHF0.5million(previousyear:CHF1.1million)andforeignexchangelossesonGrouploansandothercurrentreceivablesofCHF3.4million(previousyear:foreignexchangegainsofCHF3.9million).

AdministrationexpensesincludeCHF1.8million(previousyear:CHF2.0million)ofper-sonnel-relatedcosts.

Profit for the periodIn2016,AscomHoldingAGrecordsanetlossofCHF58.2million(previousyear:netprofitofCHF53.3million),whileAscomGrouprecordsaconsolidatednet lossofCHF145.7million(previousyear:consolidatednetprofitofCHF24.3million), largelyduetothelossfromdis-posaloftheNetworkTestingDivision.

Comments on the financial statements


87ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG PROPOSAL FOR THE APPROPRIATION OF RETAINED EARNINGS & RESERVES FROM CAPITAL CONTRIBUTION 2016

CHF 2016

Retainedearningsfrompreviousyear 469,538,366

Distributionofdividends (16,121,211)

Resultfortheperiod (58,214,397)

Retained earnings at 31.12.2016 395,202,758

DistributionofCHF0.80pershareentitledtodividends (28,800,000)

Balancetobecarriedforward 366,402,758

Proposal for the appropriation of reserves from capital contribution 2016

CHF 2016

Distributablereservesfromcapitalcontributionfrompreviousyear 1,123,243

Distributionofreservesfromcapitalcontribution –

Distributable reserves from capital contribution at 31.12.2016 1,123,243

Balancetobecarriedforward 1,123,243

Proposal for the appropriation of retained earnings 2016


88 ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG REPORT OF THE STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS

Report of the statutory auditor to the General Meeting of Ascom Holding AG, Baar

Report on the audit of the financial statements

Opinion WehaveauditedthefinancialstatementsofAscomHoldingAG,whichcomprisethebalancesheetasat31December2016,incomestatementandnotesfortheyearthenended,includingasummaryofsignificantaccountingpolicies.

Inouropinion,thefinancialstatements(pages81to87)asat31December2016complywithSwisslawandthecompany’sarticlesofincorporation.

Basis for opinionWeconducted our audit in accordancewith Swiss law andSwissAuditing Standards.Our responsibilitiesunderthoseprovisionsandstandardsarefurtherdescribedinthe“Auditor’sresponsibilitiesfortheauditofthefinancialstatements”sectionofourreport.

WeareindependentoftheentityinaccordancewiththeprovisionsofSwisslawandtherequirementsoftheSwissauditprofessionandwehavefulfilledourotherethicalresponsibili-tiesinaccordancewiththeserequirements.Webelievethattheauditevidencewehaveob-tainedissufficientandappropriatetoprovideabasisforouropinion.

Our audit approach

Audit scopeWedesignedourauditbydeterminingmaterialityandassessingtherisksofmaterialmisstatementinthefinancialstatements.Inparticular,weconsideredwheresubjectivejudgementsweremade;forexample,inrespectofsignificantaccountingestimatesthatinvolvedmakingassumptionsandconsideringfutureeventsthatareinherentlyuncertain.Asinallofouraudits,wealsoaddressedtheriskofmanagementoverrideofinternalcontrols,includingamongothermattersconsiderationofwhethertherewasevidenceofbiasthatrepresentedariskofmaterialmisstatementduetofraud.


89ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG REPORT OF THE STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS

MaterialityThescopeofourauditwasinfluencedbyourapplicationofmateriality.Ourauditopinionaimstoprovidereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstate-ment.Misstatementsmayariseduetofraudorerror.Theyareconsideredmaterialifindividu-allyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthefinancialstatements.

Basedonourprofessional judgement,wedeterminedcertainquantitativethresholdsformateriality,includingtheoverallmaterialityforthefinancialstatementsasawholeassetoutinthetablebelow.These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofourauditandthenature,timingandextentofourauditproceduresandtoevaluatetheeffectofmisstatements,bothindividuallyandinaggregateonthefinancialstatementsasawhole.

Overall materiality CHF700,000

How we determined it Assignedbygroupauditor

Rationale for the materiality benchmark applied WeinitiallychosetotalassetsasthebenchmarkbecauseAscomHold-ingAGisaholdingcompanythatmainlyholdsinvestmentsinsubsid-iaries.Theprofitoftheholdingcompanyfluctuatesfromyeartoyeardependingonwhetherinvesteespaydividends.Furthermoretotalas-setsisagenerallyacceptedbenchmarkfordeterminingmaterialityac-cordingtoauditingstandards.Wechose1%whichiswithintherangeofacceptablequantitativematerialitythresholdsinauditingstandards.This calculation results in an overall materiality of CHF 4,700,000.However, because the materiality allocated by the group auditor (CHF700,000)was lower, theauditwasperformedusing this lowermaterialitythreshold.

We agreedwith the Audit Committee that wewould report to themmisstatements above CHF180,000identifiedduringourauditaswellasanymisstatementsbelowthatamountwhich,inourview,warrantedreportingforqualitativereasons.

Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight AuthorityWehavedeterminedthattherearenokeyauditmatterstocommunicateinourreport.

Responsibilities of the Board of Directors for the financial statementsTheBoardofDirectorsisresponsibleforthepreparationofthefinancialstatementsinaccor-dancewiththeprovisionsofSwisslawandthecompany’sarticlesofincorporation,andforsuchinternalcontrolastheBoardofDirectorsdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Inpreparingthefinancialstatements,theBoardofDirectorsisresponsibleforassessingtheentity’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheBoardofDirectorseitherintendstoliquidatetheentityortoceaseoperations,orhasnorealisticalternativebuttodoso.


90 ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG REPORT OF THE STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS

Auditor’s responsibilities for the audit of the financial statementsOurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithSwisslawandSwissAuditingStandardswillalwaysdetectamaterialmisstatementwhenitexists.Misstate-mentscanarise fromfraudorerrorandareconsideredmaterial if, individuallyor in theaggregate, theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstate-ments.

AfurtherdescriptionofourresponsibilitiesfortheauditofthefinancialstatementsislocatedatthewebsiteofEXPERTsuisse:http://expertsuisse.ch/en/audit-report-for-public-companies.Thisdescriptionformspartofourauditor’sreport.

Report on other legal and regulatory requirementsInaccordancewitharticle728aparagraph1item3COandSwissAuditingStandard890,weconfirmthataninter-nalcontrolsystemexistswhichhasbeendesignedforthepreparationoffinancialstatementsaccordingtotheinstructionsoftheBoardofDirectors.

WefurtherconfirmthattheproposedappropriationofavailableearningscomplieswithSwisslawandthecompany’sarticlesofincorporation.Werecommendthatthefinancialstatementssubmittedtoyoubeapproved.





91ASCOMFINANCIALSTATEMENTS2016 ASCOMHOLDINGAG KEY FINANCIAL DATA ON THE SHARE CAPITAL

CHF 2016 2015 2014 2013 2012

Dividend/distribution per share

Registeredshares CHF0.50 0.45 0.45 0.40 0.35 0.25

Equity per share 1, 2


Earnings per share 1, 2

Registeredshares CHF0.50 (4.07) 0.69 1.07 1.073 0.643

Share price (high/low of the period under review)

Registeredshares CHF0.50 18.30/14.36 20.75/12.80 18.29/11.85 15.00/8.60 9.60/6.60

Taxable values 1


Number of shares 1

Registeredshares CHF0.50 36,000,000 36,000,000 36,000,000 36,000,000 36,000,000

Of which own shares 1

Registeredshares CHF0.50 98,075 220,894 890,894 1,073,169 1,568,202

1 At 31 December.2 Based on the consolidated financial statements.3 Based on the consolidated financial statements according to IFRS.

Key financial data on the share capital


92 ASCOMANNUALREPORT2016 WORLDWIDE CONTACTS

Australia/New Zealand, [email protected]

Belgium, BruxellesAscom(Belgium)[email protected]

Denmark, GlostrupAscomDanmarkA/[email protected]

Finland, [email protected]

France, NanterreAscom(France)[email protected]

Germany, Frankfurt a. [email protected]

Italy, [email protected]

Malaysia, AmpangAscom(Malaysia)[email protected]

Netherlands, UtrechtAscom(Nederland)[email protected]

Norway, OsloAscom(Norway)A/[email protected]

Sweden, GothenburgAscom(Sweden)[email protected]

Switzerland, [email protected]

Switzerland, [email protected]

Switzerland, Mä[email protected]

United Arab Emirates, [email protected]

United Kingdom, BirminghamAscom(UK)[email protected]

USA, Morrisville NCAscom(US)[email protected]

Worldwide contacts


93ASCOMANNUALREPORT2016 DATES AND CONTACTS

Dates and contacts

Important dates

19April2017AnnualGeneralMeetingLorzensaal,Cham

Contact address

Ascom Group Communications & IRAscomHoldingAGDanielLack,CompanySecretary & CCOZugerstrasse32|CH-6340Baar+41415447800|[email protected]|[email protected]


Declaration of forward-looking statements

ThisAnnualReportcontains forward-lookingstatements relating toAscom.Because theseforward-lookingstatementsaresubjecttorisksanduncertainties,thereaderiscautionedthatactualfutureresultsmaydifferfromthoseexpressedinorimpliedbythestatements,whichconstituteprojectionsofpossibledevelopments.All forward-lookingstatementsarebasedonlyondataavailabletoAscomatthetimeofpreparingtheAnnualReport.

Thecomplete2016AnnualReportoftheAscomGroupisavailableinEnglishonlyandcanbeviewedonlineat:www.ascom.com/corp/de-de/investor-relations/reports-presentation.html

Publishing details

PublisherAscomHoldingAG,BaarFinancial StatementsAscomGroupFinance,BaarEditorialTolxdorff & EicherConsulting,HorgenTranslationCLSCommunicationAG,ZurichPhotosSeverinJakob,Zurich,CoverFotolia/Westend61Concept, Design & RealizationLinkgroupAG,Zurich

©AscomHoldingAG2017


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