GB12 en V08:DC · 2016-11-21 · Datacolor is debt-free and has a high net cash position and an even stronger, very solid equity ratio. In view of the Company’s sound financial

DATACOLOR AGANNUAL REPORT 2 0 1 2

DATACOLOR AG

Board of Directors Datacolor AGReport of the Board of Directors 3

Datacolor Share Information 4

Key Figures Group 5

Corporate GovernanceGroup Structure 6

Executive Bodies 7

Information for Investors 14

Commentary to the Business Year 2011/12 16

Financial ReportDatacolor Group 19

Datacolor AG 45

Addresses 52

Financial year from October 1, 2011 through September 30, 2012

ANNUAL REPORT 2 0 1 2

Analogous translation of the original German version of ‘Geschäftsbericht 2012’. In case of differencesof interpretation arising in comparison to the German version, the wording of the original German versionis valid.

3

Report of the Board of Directors

Report of the Board of Directors

In fiscal 2011/12, Datacolor continued to strengthen its position as one of the world’s leading suppliersof innovative color management solutions. The Group increased its market leadership position in thetextile sector. The Company also significantly expanded its presence in key markets such as the automotive and plastics industry, as well as with manufacturers of paint and dyes by launchingnumerous new innovative products and expanding the sales and service organization.

The Group invested strongly in the direct sales and service organization in growth markets such asChina and India. At the same time, the US distribution channel for the Imaging business was stream-lined. In the German speaking countries the service and support functions were insourced. Datacolorintensified cooperation with local distribution partners in important emerging markets such as Turkeyand Brazil. Datacolor stepped up its customer orientated marketing activities, especially in the Imagingbusiness where the Group accelerated the efficient market introduction of new products in the yearunder review. The increased spending in marketing and the distribution process optimization has already showed a positive impact.

At the beginning of the reporting period, Datacolor changed its structure from a divisional to a functionalorganization. This organizational alignment has been accomplished successfully and has led to opti-mized processes, a significant increase of resource efficiency, and clearly defined management responsibilities. This change has positively impacted the Company’s profitability. The managementteam was further strengthened in key functions with industry-savvy, high-potential employees. Data-color optimized organizational processes in the research and development department and could thusmaintain its high innovation pipeline at a lower cost. The targeted marketing investments as well asoptimized processes in sales and research and development has strengthened the Company’s inter-national sales and profitability potential.

Given the challenging currency and economic environment the consolidated net sales increased onlyslightly, whereas the profitability increased significantly due to efficiency gains in fiscal 2011/12. Datacolor is debt-free and has a high net cash position and an even stronger, very solid equity ratio.In view of the Company’s sound financial position, the Board of Directors is proposing to the share-holder’s general meeting that a dividend of CHF 11 (CHF 10) be distributed for fiscal 2011/12.

On behalf of the Board of Directors, I would like to thank the Executive Committee and employees fortheir dedicated efforts in a challenging economic environment. With an optimized sales organization,customer-focused marketing, a strengthened management and an innovative research and develop-ment department, Datacolor is well positioned for the challenges ahead. The Company has a strongpipeline of innovative products to be launched in the new fiscal year. Given a reasonably stable eco-nomic environment, Datacolor’s Board of Directors and the Executive Committee expect to continually increase primarily sales revenues but also its profitability due to its strong market position and efficientglobal sales and service organization.

Werner DubachChairman of the Board of Directors

Datacolor Share Information

DATACOLOR SHARE INFORMATION

Stock exchange informationExpected dividend ex date (subject to approval by AGM) January 14, 2013

Listing SIX Swiss Exchange (Zurich)

Security ID 853 104

ISIN CH0008531045

Reuters DCN.S

Bloomberg DCN

Investdata DCN

Capital structure 30.09.2012 30.09.2011

Share capital in CHF 168 044 168 044

Conditional share capital in CHF 4 580 4 580

Number of registered shares 168 044 168 044

Nominal value per share in CHF 1 1

Registration restrictions none none

Voting restrictions none none

Opting out / opting up clauses none none

Significant shareholders (in %) 30.09.2012 30.09.2011

Dubach family 51.33% 50.38%

Keller family 16.72% 16.72%

Corisol Holding AG 7.72% 7.72%

Shareholders by category (in %) 30.09.2012 30.09.2011

Significant shareholders 75.77% 74.82%

Private investors 80.69% 79.04%

Corporate investors 19.31% 20.96%

Non-registered shareholders 2.76% 3.33%

Share distribution 30.09.2012 30.09.2011

Number of registered shares number of shareholders number of shareholders1-100 656 691

101-1 000 18 16

1 001-5 000 5 4

5 001-10 000 0 0

>10 000 4* 4*

Total 683 715

*including treasury shares of Datacolor AG

Share price data in CHF 2011 / 2012 2010 / 2011

First trading day 407.75 (06.10.2011) 305.00 (01.10.2010)

Low 356.00 (20.02.2012) 305.00 (01.10.2010)

High 420.00 (18.04.2012) 444.00 (17.12.2010)

Last trading day 393.25 (30.09.2012) 390.75 (30.09.2011)

Average share price 386.76 402.59Market capitalization in CHF million as of September 30 66.1 65.7

4

1) Calculation is based on the weighted average number of shares outstanding (issued shares less treasury shares).2) According to the proposal of the Board of Directors on November 13, 2012.3) Distribution in percentage of the share price as of September 30.

Average number of employees 311 278

Personnel expenses 23.4 21.4

Total assets 49.2 47.3

Shareholders’ equity 31.6 28.7

as a % of assets 64.1% 60.7%

Net liquidity 24.0 23.4

Per share data1)

Average number of shares 153 095 151 243

Earnings per share in USD (non-diluted) 27.55 24.96

Free Cash Flow in USD 18.50 33.02

Shareholders’ equity in USD 206.17 189.89

Dividend in CHF2) 11.00 10.00

Share price data as of September 30 in CHF 393.25 390.75

Yield in %3) 2.8% 2.6%

Key Figures Group

5

KEY FIGURES GROUP

in USD million 2011 / 2012 2010 / 2011

Net sales 55.9 55.5

Change relative to previous year in % 0.8% -1.2%

EBITDA 6.8 6.0


as a % of net sales 12.1% 10.7%

EBIT 5.4 4.7



Profit for the year 4.2 3.8



as a % of average shareholders’ equity 14.0% 13.7%

Cash flow from operating activities 4.5 5.2

Change relative to previous year in % -12.9% -55.6%


Cash flow from investing activities -1.7 -0.2


as a % of cash flow from operating activities 37.3% -3.8%

Free Cash Flow 2.8 5.0

Change relative to previous year in % -43.3% -54.7%


6

GROUP STRUCTURE

Introduction

Datacolor endorses a state of the art Corporate Governance with high transparency for all stakeholders. Pro-

fessional processes and individual accountability on all levels of the organization are the foundation.

The following information meets the requirements of the Directive on Information Relating to Corporate Gov-

ernance (Corporate Governance Directive, DCG) of the SIX Swiss Exchange. Datacolor is further orientated

to the Swiss Code of Best Practice for Corporate Governance. If not mentioned differently all information are

made for the closing date September 30, 2012.

The information on Corporate Governance can also be retrieved electronically under the following link:

http://www.datacolor.com/company/investor-relations/corporate-governance/.

Roles and duties of Datacolor AG

Datacolor AG as top holding company of the Datacolor Group manages its business by means of objectives,

it is involved in the planning process and monitors adherence to the budget. Once the three-year plan and

the budget have been approved by the Board of Directors, the Executive Committee acts on its own authority

within the limits of the budget and the rules of competence. The Executive Committee is responsible for con-

solidation, financing, controlling, asset management and investor relations.

Datacolor AG is a Swiss public limited company with its head office in Lucerne. Refer to note 28 for a disclo-

sure of controlled subsidiaries, the market capitalization is disclosed on page 4.

Strategy

Datacolor provides worldwide products and services to industrial as well as professional and hobby appli-

cations in the area of color measurement, management, communication and calibration. Datacolor’s debt-

free balance sheet enables it to achieve long-term growth targets with continuing organic growth and targeted

acquisitions.

It aims to achieve significant growth by providing innovative hardware and software products, increasing

market penetration, developing new markets, alliances and acquisitions. Its range comprises products and

systems solutions that are competitive in terms of quality, performance and ease of use. The products are

tailored to customer requirements and able to offer a large potential for generating added value. Providing

services for its products is a growing core activity.

Datacolor aims for market leadership in defined customer segments as well as geographical markets.

Corporate performance is achieved by a flexible, lean and customer-oriented organization. The production

depth is restricted to what is strategically necessary.

While meeting the requirements of a publicly listed company, the stable shareholder basis is a key driver of

Datacolor’s attainment of its long-term goals.

Corporate Governance

7

EXECUTIVE BODIES

Board of Directors of Datacolor AG

Werner Dubach, 1943, CHChairman, Board member since1981, elected until AGM 2013Dipl. Ing. Chem. ETH Zurich, MBAWharton University of Pennsylvania

Until January 2009, CEO andChairman of Eichhof Holding AGUntil 1981, Director of the EichhofGroup’s Beverages division1975–1979 Technical Director ofthe Eichhof Brewery1971–1975 Management Assistantof the Eichhof Brewery

Conzzeta AG, Zurich, Member ofthe Board

Peter Beglinger, 1945, CHBoard member since 1992, electeduntil AGM 2014Dr. iur. University of Zurich

Until 2007 law office in Zurich,Counsel1979–2006 own law office in Zurich1976–1978 legal adviser to the ex-ecutive management of Jacobs AG

1974–1976 law office Wenger &Vieli, Zurich1974 admitted to the bar

Würth Finance International B.V.,NL, Member of the Board

Anne Keller Dubach, 1956, CHBoard member since 2012, electeduntil AGM 2015Lic. Phil. I, University Zurich, SEPStanford Graduate School of Busi-ness

Since 2007 Head Corporate Citi-zenship, Swiss Re, Zurich2000–2007 Head Corporate Spon-sorship / Head Brand Communica-tion, Swiss Re, Zurich1995–2000 Project Lead MarketingServices / Head Cultural SponsoringCredit Suisse1991–1995 Project Lead Media /Marketing Analysis, Dr. ThomasHeld, Zurich1988–1991 Product ManagementMagazines/ Head Marketing/ Pro-motions Rincovision, Ringier

Hans Peter Wehrli, 1952, CHBoard member since 2001, electeduntil AGM 2015Dr. oec. publ. University of ZurichProfessor of Business Administra-tion, University of Zurich

Belimo Holding AG, Wetzikon,Chairman of the Board Swiss Prime Site AG, Olten, Chair-man of the Board

Fritz Gantert, 1958, CHBoard member since 2004, electeduntil AGM 2013Dr. sc. techn., Dipl. Masch.Ing.ETH Zurich

Since 2012 Enterpreneur, Inde-pendent Board Member2007–2012 General Manager Security Communication Division,Member of the Executive Board,Ascom Holding AG2001–2006 CEO of SchaffnerGroup1998–2001 Sarna Kunststoff Holding AG,1988–1998 Ascom


Fritz Gantert, Peter Beglinger, Werner Dubach, Anne Keller Dubach, Hans Peter Wehrli

8

Elections and term of office

Members of the Board of Directors are elected by the Annual General Meeting of Shareholders for an indi-

vidual term of office of three years. Newly elected members complete the terms of their predecessors. There

are no limitations on terms of office.

Internal organization

The Board of Directors is self-constituting. It appoints committee members and the secretariat.

Duties

The Board of Directors is the supreme executive body of the Holding company. It adopts resolutions which

determine the company’s fundamental direction and oversees the work of senior management.

Committees

The Board of Directors has established committees to support its work. The primary role of these committees

is to prepare business affairs and oversee the implementation of Board resolutions. Furthermore, the Board

of Directors may delegate the final handling of certain affairs to the committees, provided that delegation of

such tasks is not prohibited by law. The Board of Directors has established two committees: the Finance

Committee as well as the Human Resources and Compensation Committee. Furthermore, the Steering Com-

mittee acts as a supervisory and control instrument (refer to page 15).

– The Finance Committee prepares the financial plan, the budgets and the statements for submission to the

Board of Directors. Among other things, it issues instructions and monitors the appropriation of liquidity

and the execution of asset management operations.

– The Human Resources and Compensation Committee drafts proposals for the remuneration of the Board

of Directors. It also submits proposals to the Board for appointments to the position of CEO and CFO. The

Committee sets the fixed and variable components of remuneration for the top levels of management, taking

into account the situation on the labor market, performance and achievement of the targets that have been

set. If the Committee deliberates on the remuneration of a member of the Human Resources and Compen-

sation Committee, this member shall withdraw from the proceedings.

Finance Committee: Werner Dubach, Albert Busch (CEO), Dr. Mark Leuchtmann (CFO)

Human Resources and Compensation Committee: Dr. Peter Beglinger, Dr. Fritz Gantert

Principles of operation of the Board of Directors and its committees

The Board of Directors meets as often as business requires, but at least four times a year. Committee meet-

ings are held in addition to Board meetings. Board meetings usually last for between half a day and a day.

In 2011 / 12, the following number of meetings were held:

– Board of Directors 4

– Finance Committee 10

– Human Resources and Compensation Committee 4


9

Areas of competency

Board of Directors

The Board of Directors represents the company externally and manages all company activities unless re-

sponsibility for these has been transferred to another company body in accordance with the law, the Articles

of Association or other policies. The non-transferable and inalienable duties are governed in Art. 716a of the

Swiss Code of Obligations.

Unless the law, the Articles of Association or the directives issued by the Board of Directors stipulate other-

wise, the Board of Directors delegate the operational management of the company to the CEO, together with

the authority to delegate associated tasks onwards. The company’s Organization Regulation governs the

breakdown of responsibility between the Board of Directors and the Executive Committee and can be ob-

tained on the following website: http://www.datacolor.com/content/corporate-governance.

Executive Committee

Executive Committee members are appointed by the Board of Directors and the Human Resources and Com-

pensation Committee, respectively.

Information and control instruments vis-à-vis the Executive Committee

The Executive Committee informs the Board of Directors about the current status of the business, the con-

solidated balance sheet, the income statement and deviations to the budget on a monthly basis. On the oc-

casion of the four meetings of the Board of Directors during the year, the Executive Committee reports on

significant business transactions and on the results of the group-wide management of financial and operating

risks.

Findings of the following bodies also contribute to the regular decision-making process:

– External auditor KPMG AG, Root/Lucerne (auditor for Datacolor AG), which conducts its audit in accordance

with Swiss law and Swiss auditing standards.

– Internal Audit and Risk Management, which monitors the existence and adequacy and permanently seeks

improvements to the internal control system. Further, a systematic process captures strategic, operational

and financial risk and develops and executes measures to mitigate and eliminate risks.


10

Albert Busch, 1967, NL / USACEOBS / MS in Electrical EngineeringMS in Industrial Management

Since 2008 with DatacolorSince January 2009 CEO1991–2008 NV Bekaert SA, man-agement roles

Mark Leuchtmann, 1972, DE / CHCFODr. rer. pol. TU MunichSwiss Certified Accountant

Since 2009 with Datacolor2007–2009 Private Equity Fund, Di-rector / Senior Investment Manager2005–2007 Zurich InsuranceGroup, Head Financial & Transac-tion Analysis1999–2005 PricewaterhouseCoop-ers, Manager

Brian Levey, 1957, USASales and SupportBS in Chemistry

Since 1996 with Datacolor1984–1996 Beckmann Instruments,management roles

Ross McGovern, 1978, GBHuman Resources MSc in Human Resources Manage-mentBS English and Politics

Since 2012 with Datacolor2001–2011 General Electric Company, management roles

Tae Park, 1963, USATechnology BS in Electrical Engineering / Bio-medical Engineering

Since 2010 with Datacolor2007–2010 Power Medical Inter-ventions, Sr. VP of Engineering-Op-erations2006–2007 Kovio Inc., Program / IPManager 1993–2006 Osirix Inc., CTO1989–1993 Trans-Lite Inc., Directorof Engineering 1985–1989 Charm Bioengineering,Sr. Biomedical Engineer

Rico Sauerborn, 1970, DE / ITGlobal OperationsBusiness Administration & Engi-neering (Dipl. Wirtschafts-Inge-nieur)

Since 2009 with Datacolor2005–2008 Rieter Textile Instru-ments, Changzhou, China, SupplyChain Manager2003–2005 Spindelfabrik Suessen,Germany, management roles1998–2003 ebm Werke, Germany,management roles

Executive Committee of the Datacolor Group


Albert Busch, Brian Levey, Rico Sauerborn, Ross McGovern, Mark Leuchtmann, Tae Park

11

Executive Committee

Other activities and and interest groups

The Executive Committee members have no permanent management and consulting functions for significant

interest groups and do not hold either administrative or political offices.

Management contracts

There are no management contracts.

Compensation, shareholdings and loans

Content and process in regard to compensation and share option programs

Competence and process determining compensation and share option program

On an annual basis the Human Resources and Compensation Committee provides a proposal for the fixed

and variable compensation to the Board of Directors. If the compensation of an individual member of the

Human Resources and Compensation Committee is affected, this member withdraws from the proceedings.

The Board of Directors annually determines the fixed and variable compensations to its members on the

basis of the proposal by the Human Resources and Compensation Committee. In the decision process about

the compensation of an individual Board member, this member keeps his / her participation and voting rights.

The Human Resources and Compensation Committee annually determines the fixed and variable compen-

sation for the Executive Committee members and informs the Board of Directors accordingly. For the arrange-

ment of the compensation and share option programs, Datacolor AG does not employ any external advisors.

General principles and elements of the compensation

Board of Directors

The members of the Board of Directors (all are non-executive) are remunerated with a fixed cash compen-

sation, as well as a variable compensation, which can also be paid in cash, or on request, to the extent

defined annually at the discretion of the Board of Directors, remunerated in the form of options on registered

shares of Datacolor AG. The fixed compensation is determined at the sole discretion of the Board of Directors.

The variable compensation depends on the company’s financial success, reflected in the organic growth of

sales as well as the operating profit EBIT. However, the weighting of the latter is at the discretion of the Board

of Directors. The Board of Directors’ decisions are not based on benchmarks.

For further terms and conditions relating to the options on shares of Datacolor AG, which Board members

may opt for as their variable compensation component (see above), refer to note 21 to the consolidated

financial statements.

In the year under review, the Board’s variable compensation amounted to 27% of the fixed compensation.

For more information on this as well as on the specific composition of the Board’s compensation in the

reporting year, refer to note 22 to the consolidated financial statements.

Executive Committee

The compensation of the Executive Committee consists of a fixed base salary in cash, a variable perform-

ance-based bonus in cash that can be used to purchase stock options, plus contributions to the pension

fund and social insurances.

The fixed base salary is mainly determined by the task to be executed, the responsibility to be assumed, the

person’s qualifications and experience, as well as the market environment. Human Resources and the Com-

pensation Committee primarily refer to the findings of renowned studies relevant to the labor market of the US-

American technology sector to determine salary bandwidths. Using this as a guideline, the Human Resources

and Compensation Committee then defines the fixed salaries at their discretion for the Executive Commission.


12

The criteria for determining the variable compensation (performance-related bonus) are defined in the reg-

ulations adopted by the Human Resources and Compensation Committee; these criteria are valid for several

years and were last reviewed by the Human Resources and Compensation Committee in 2011.

The performance-related bonus depends on the fulfillment of individual performance objectives and the fi-

nancial success of the company.

Initially, the pool available for performance-related bonuses is determined based on the two financial value

drivers, organic growth in sales (without acquisitions or divestitures) compared to previous year figures and

budget (60% weighting; previous year: 20%) as well as the operating EBIT compared to budget (40% weight-

ing; previous year: 80%). The Board of Directors sets these targets during the budgeting procedure for a pe-

riod of one year. The pool may reach a maximum of 200% of the budgeted target value of the variable

compensation.

The members of the Executive Committee (other employees might also be entitled to a bonus) receive indi-

vidual performance-related bonuses based on the achievement of their individual performance goals from

this pool. The pool depends on the company’s financial success. Measurable individual goals are agreed

during the Management by Objectives process at the beginning of the year between the Chairman of the

Board of Directors and the CEO as well as between the CEO and the members of the Executive Committee.

After the end of the fiscal year, the Human Resource and Compensation Committee assesses the fulfillment

of these goals by the CEO and the other members of the Executive Committee.

If the actual EBIT achieved falls below the target set by the Board of Directors by more than 50% (minimum

threshold), the payment of variable performance-related bonuses is subject to approval by the Human Re-

sources and Compensation Committee. No minimum threshold is determined for the achievement of the or-

ganic sales growth component. If actual EBIT realized exceeds budgeted target, 25% of the exceeding

amount is allocated to the variable compensation pool. The additional contribution to the variable compen-

sation pool in case of overachievement is limited to 200% of the total budgeted variable compensation pool

for all employees (maximum threshold). The performance-related bonus is determined at 100% by the

attainment of the individual targets (previous year: 80% individual target; 20% company success).

For the CEO, the performance-related bonus may be a maximum of 82% and for the other members of the

Executive Committee a maximum of 71% to 78% of the annual target salary. The target salary is made up of

the fixed compensation plus the variable amount.

To define the performance-related bonus of the Executive Committee, the Human Resources and Compen-

sation Committee does not consult benchmarks.

In the year under review, the performance-related bonus for the members of the Executive Committee

amounted between 20% and 52% of the fixed base salary. The weighting of the individual goals and the fi-

nancial success was the same for all members of the Executive Committee, with 80% for the individual goals

and 20% for the financial success.

The members of the Executive Committee will have the possibility to use a portion of their variable compen-

sation (performance-related bonus) as determined by the Human Resources and Compensation Committee

to purchase options on registered shares of Datacolor. A three-year blocking period is ensuring that the com-

pany’s long-term success is rewarded. For further parameters of the share option plan, please refer to note

21 (management share option plan).

For details on the Executive Committee’s compensation in the year under review, please refer to note 22 to

the consolidated financial statements.


13

The pension and social insurance expenses include employer contributions to social security as well as the

mandatory and non-mandatory occupational benefits. The expense regulations for the members of the

Executive Board are basically the same as those for all other employees of the respective group company.

Additional rules apply on lump-sum compensation of representatives and petty expenses for the members

of the Executive Committee in Switzerland. These have been approved by the relevant cantonal tax authori-

ties. The employment contract of members of the Executive Committee does not foresee a company car for

their use.

Share allotment in the year under review

No shares were allotted during the reporting period.

Shareholdings and options

Holdings of shares and options as at September 30, 2012 are disclosed in note 22 to the consolidated finan-

cial statements. The purpose of the option plan is to promote investment by Executive Committee members

in Datacolor AG in order to achieve greater identification with company goals and to align the interests of

management with those of shareholders. The stock options are blocked for three years and entitle the holder

to purchase registered shares at a ratio of 1:1. For detailed information refer to note 21 to the consolidated

financial statements.

Loans granted to executive bodies

There are no outstanding loans granted to members of the governing bodies.

Compensation for former members of governing bodies

No compensation was paid to former members of governing bodies.

Additional fees and remunerations

Generally, additional fees and remunerations are not paid to members of the Board of Directors, Executive

Committee members or related parties in an amount equal to or greater than half of the regular compensation

for the given member.


14

INFORMATION FOR INVESTORS

Share capital

The share capital amounts to CHF 168 044 consisting of 168 044 registered shares with a nominal value of

CHF 1 each. The registered shares entitle the holder to one vote at the General Meeting, provided that the

shareholder is recorded with voting rights in the Datacolor AG share register.

Authorized capital

There is no authorized capital.

Conditional capital

The share capital can be increased by a maximum amount of CHF 4 580 (previous year: CHF 4 580) by

issuing 4 580 registered shares with a nominal value of CHF 1 each. This conditional capital increase was

implemented to enable the exercise of option rights by the members of the Board of Directors and the Exec-

utive Committee. Shareholders are excluded from this purchasing right.

Changes in capital

Regarding capital changes caused by exercised options refer to note 21 and statement of changes in equity.

Participation certificates

There are no participation certificates.

Limitations on transferability and nominee registrations

There are no limitations with regard to transferability and nominee registrations.

Convertible bonds and options

Datacolor AG has no outstanding convertible bonds. Regarding options, refer to information on compensation

above, notes 2 and 21 to the consolidated financial statements.

Share listing

Datacolor AG’s shares are listed on SIX Swiss Exchange Zurich under security number 853 104. Refer to

Datacolor Share Information on page 4 for an overview of the stock market listing and details of the market

capitalization.

Legal status of shareholders

Shareholders in Swiss public limited companies are granted extensive statutory participation and protection

rights by law. These participation rights are further supplemented by the company Articles of Association.

These ensure that, pursuant to the Code of Obligations, the Annual General Meeting of Shareholders is con-

vened by placing a one-time announcement in the Swiss Official Gazette of Commerce (Schweizerisches

Handelsamtsblatt) and by sending a written invitation to the registered shareholders. An item is added to the

agenda of the Annual General Meeting of Shareholders if the corresponding request is received no later than

40 days before the date of the meeting. Every shareholder may, besides the independent proxy provided for

by law, allow his or her shares to be represented at the Annual General Meeting by a shareholder with a writ-

ten proxy form.

Voting rights limitations

Every shareholder entered with voting rights in the share register is entitled to vote. No new entries in the

share register are made during the 22 days before the Annual General Meeting of Shareholders. There are

no limitations on voting rights.

Entry in the share register

The entry of purchasers in Datacolor AG’s share register is not subject to any conditions.

Cross-shareholdings

There are no cross-shareholdings.

Information for investors

15

Shareholdings in companies

There are no shareholdings in listed companies. Percentage shareholdings in unlisted companies are dis-

closed in note 28 to the consolidated financial statements.

Significant shareholders

Refer to Datacolor Share Information on page 4.

Duty to make an offer

The company’s Articles contain no provisions regarding a duty to make an offer.

Clauses on changes of control

There are no clauses on changes of control.

Auditors

Duration of the mandate and term of office of the lead auditor

Datacolor AG has appointed KPMG AG, Root / Lucerne as auditor. The mandate is granted by Datacolor AG’s

Annual General Meeting of Shareholders for a period of one year. The mandate was first given to KPMG in

1992. Thomas Studhalter has been auditor in charge since financial year 2007 / 08.

Audit fee

KPMG received an audit fee of TUSD 221 for the reporting year 2011 / 2012.

Additional fees

In addition to the audit fee, KPMG provided other services for TUSD 25 relating solely to tax consultancy

services.

Supervisory and control instruments vis-à-vis the auditors

The Board of Directors holds at least two meetings a year with the auditor in charge of the mandate. The

matters dealt with at these meetings include the planning and conduct of audits, the focus points of the audits

and the findings thereof, the main points arising from management letters, the reports on special audits and

the reports of the auditor and the group auditor. The Board of Directors has appointed a steering committee

to manage the audits and to monitor implementation of the auditors’ proposals. This committee is made up

of the Chairman, the CEO and the CFO of Datacolor AG and the auditor in charge of the mandate and meets

regularly while audit work is being carried out.

Information policy

Publications

Datacolor AG publishes a semi-annual report and an annual report in accordance with Swiss GAAP FER.

Additionally, shareholders and the capital market are kept informed of current changes and developments

through press releases. As a company listed on SIX Swiss Exchange, Datacolor AG is aware of its duty to

disclose events relevant to its share price (ad hoc disclosure of price-sensitive information). Information of

the periodical financial reporting as well as ad-hoc news releases and further information on the Datacolor

Group can be accessed through website under the following link:

http://www.datacolor.com/company/investor-relations/.

Key dates

Shareholders’ meeting: January 10, 2013

Semi-annual report: May 2, 2013

Press release: November 1, 2013

Press conference: November 28, 2013

Shareholders’ meeting: January 9, 2014

Information for investors

16

Commentary to the Business Year 2011 / 12

DATACOLOR IN FISCAL 2011/12

Continued increase in net sales and double-digit profit growth

In fiscal 2011/12, Datacolor’s net sales increased in local currency by 3% to USD 55.9 million (FY 2010/11:

USD 55.5 million). EBITDA rose by 14.0% to USD 6.8 million (USD 6.0 million) and EBIT by 14.3% to

USD 5.4 million (USD 4.7 million). Net income significantly surpassed the previous year’s result with an

increase of 11.7% to USD 4.2 million (USD 3.8 million). Datacolor remains debt-free. The Company has a

substantial net cash position of USD 24 million and a robust balance sheet with a solid equity ratio of

64.1% (September 30, 2011: 60.7%).

Growth markets gain further in importance

During the period under review, the share of sales generated by the Asia Pacific region increased to 31.3%

(30.4%). Above all in China, Datacolor recorded pleasing growth due to the significant expansion of the direct

sales organization in the reporting period. The North and South American markets also lifted their share of

sales from 28.2% to 30.2%. Under the impact of the euro crisis, Europe’s share of Group sales decreased

slightly, but the region remains Datacolor's largest market, accounting for 38.5% (41.4%).

Strategic investments in the expansion of the sales and service organization

Datacolor is one of the world’s leading suppliers of software and hardware systems for color management

and measurement. The Group is the global market leader in the textile industry and in the color calibration of

displays and printers. In the year under review, Datacolor further expanded its strong market position in key

markets such as the automotive and plastics industries as well as manufacturers of paints and dyes. In the

growth markets of China and India, the sales and service organization was substantially strengthened by

more than doubling personnel from 20 to 45 employees. Datacolor intensified cooperation with local distri-

bution partners in important emerging markets such as Turkey and Brazil. In the USA, the distribution channel

for the ‘Spyder’ product family was streamlined, which essentially simplified and intensified Datacolor’s direct

communication with its end customers. As a result, the average headcount increased by 12% to 311 full-

time equivalents, due mainly to the expansion of the sales organization in Asia.

Numerous new product launches

Datacolor continued to invest substantially in research and development to keep up a high pace of innovation

and to increase the number of new product launches. The Group has a well-filled product pipeline with inno-

vative instruments and software solutions for the measurement and communication of color. As a result of

the optimized processes in the research and development department, the share of net sales decreased

slightly to 10% (FY 2010/11: 12%), while the high innovation rate was maintained.

During the year under review, Datacolor launched a significant number of new, innovative solutions such as

the ‘45G’ portable spectrophotometer with integrated gloss measurement. The solution excels in color

appearance evaluation of painted surfaces, plastic parts, package prints, automotive parts, and furniture.

Measurements made with the ‘45G’ capture the effect of base color, gloss and surface texture on overall

visual appearance. ‘Ahiba QuickDose’ complements the innovative series of lab instruments for the textile

industry. The patented solution allows an efficient and more precise chemical dosing in the dyeing process,

accelerating the lab-to-production reproducibility. Datacolor also introduced ‘MatchPigment 2.2’, which is

designed for the plastics sector as well as the paint and coatings industry. The innovative ‘Smart Match’ tech-

nology significantly improves the prediction accuracy for color recipes and, thanks to its patented method,

simplifies pigmented wood stain matching. Moreover, the fully upgraded fourth generation of the ‘Spyder’

product range was successfully launched. The sophisticated technology of the innovative and easy-to-use

‘Spyder4’ family allows the precise calibration of monitors, laptops, projectors, TVs, iPads and iPhones. The

year under review also saw the launch of the innovative microchip-based ‘Europa’ mini-sensor. This color

sensor integrates seamlessly with OEM applications and is intended for the accurate color calibration of TVs,

monitors and laptops.

17

Commentary to the Business Year 2011 / 12

Solid balance sheet and increased profitability

On the back of continued process optimizations, Datacolor increased its gross profit margin by one percent-

age point from the satisfactory year-back figure of 64.4% to 65.4%. Mainly as a result of the newly introduced

functional organization, the operating result (EBIT) developed positively with an increase of 14.3% to USD

5.4 million (USD 4.7 million). The EBITDA margin came to 12.1% (10.7%) and the EBIT margin to 9.7% (8.5%).

Datacolor again utilized tax loss carry-forwards during the year under review. Tax expenses amounted to

USD 0.7 million (USD 0.8 million), resulting in a tax ratio of around 15% (18%). Total assets amounted to USD

49.2 million (FY 2010/11: USD 47.3 million). At USD 24.4 million (USD 24.1 million), cash and cash equivalents

together with financial assets accounted for approximately 49% of this figure. Datacolor remains debt-free

and has a strong balance sheet with a substantial net cash position of USD 24 million and a solid equity ratio,

which showed a further improvement to 64.1% (September 30, 2011: 60.7%).

Datacolor AG (Holding)

As in the previous fiscal year, Datacolor AG (holding company for Datacolor investments in subsidiaries)

posted a balanced result at the level of the separate statutory financial statements in fiscal 2011/12. As a

result of the distribution of a dividend of CHF 10 for fiscal 2010/11 (43% of that year's consolidated profit),

the shareholders' equity of Datacolor AG (Holding) decreased to CHF 24.4 million (CHF 25.9 million).

Outlook

Datacolor aims to continuously raise sales by launching new products and increasing market penetration.

The Group has a successful range of products and services, a well-filled development pipeline and a pow-

erful, customer-orientated sales organization which will actively enter the market to ensure the systematic

realization of the long-term growth potential. Given a continued reasonable economic trend, Datacolor is well

positioned to achieve its ambitious medium-term objectives for growth and profitability through organic growth

and targeted acquisitions.

19

Datacolor GroupConsolidated Income Statement 20

Consolidated Balance Sheet 21

Consolidated Cash Flow Statement 22

Consolidated Statement of Changes in Equity 23

Notes to the Consolidated Financial Statements 24

Report of the Statutory Auditor on the Consolidated Financial Statements 43

FINANCIAL REPORT


Datacolor Group

20

CONSOLIDATED INCOME STATEMENT

in TUSD 2011 / 2012 2010 / 2011

Gross sales 56 148 55 638

Sales deductions -236 -182

Net sales 3 55 912 100.0% 55 456 100.0%

Cost of goods sold -19 334 -19 757

Gross profit 36 578 65.4% 35 699 64.4%

Sales and marketing expenses -16 569 -15 765

Administrative expenses -8 894 -8 643

Research and development expenses -5 785 -6 632

Other operating income 73 70

EBIT 5 403 9.7% 4 729 8.5%

Financial income 6 499 3 236

Financial expenses 6 -952 -3 364

Profit before income taxes 4 950 8.9% 4 601 8.3%

Income taxes 7 -732 -826

Profit for the year 4 218 7.5% 3 775 6.8%

USD USD

Earnings per share 4

non-diluted 27.55 24.96

diluted 26.13 23.60

CHF CHF

Earnings per share1)

non-diluted 25.50 22.71

diluted 24.18 21.48

1) The earnings per share in CHF has been calculated from USD to CHF by using the corresponding average rate of the period.

Datacolor Group

21

CONSOLIDATED BALANCE SHEET

in TUSD 30.09.2012 30.09.2011

Assets

Cash and cash equivalents 8 24 035 23 386

Current financial assets 15 376 678

Trade receivables 9 7 277 6 630

Other receivables 10 945 871

Inventories 11 3 769 3 424

Current tax assets 353 253

Prepaid expenses 150 89

Current assets 36 905 75.0% 35 331 74.6%

Property, plant and equipment 12 9 279 8 664

Intangible assets 13 2 179 2 430

Non-current financial assets 15 196 153

Deferred tax assets 7 675 764

Non-current assets 12 329 25.0% 12 011 25.4%

Assets 49 234 100.0% 47 342 100.0%

Liabilities and shareholders’ equity

Financial liabilities 16 0 0

Trade payables 1 968 2 457

Current tax liabilities 1 070 1 604

Other liabilities 17 1 349 1 228

Accrued liabilities 18 10 442 10 585

Short term provisions 19 438 538

Current liabilities 15 267 31.0% 16 412 34.7%

Other liabilities 17 1 747 1 553

Long term provisions 19 213 227

Deferred tax liabilities 424 431

Non-current liabilities 2 384 4.9% 2 211 4.6%

Liabilities 17 651 35.9% 18 623 39.3%

Share capital 153 153

Treasury shares -4 325 -4 924

Capital reserves 2 340 0

Retained earnings 33 415 33 490

Shareholders’ equity 31 583 64.1% 28 719 60.7%

Liabilities and shareholders’ equity 49 234 100.0% 47 342 100.0%

Datacolor Group

22

CONSOLIDATED CASH FLOW STATEMENT

in TUSD 2011 / 2012 2010 / 2011

Profit before income taxes 4 950 4 601

Depreciation of property, plant and equipment 12 965 841

Amortization of intangible assets 13 425 389

Result from the disposal of non-current assets 12 -37 35

Changes in provisions 19 -100 -123

Other non-cash positions 473 -96

Interest expense / income net 6 8 -11

Income from securities and dividends, net 6 -9 -66

Interest paid 6 -32 -14

Change in fair value of derivatives 14 327 -327

Income taxes paid / received -1 127 454

Cash flow before changes in working capital 5 843 5 683

Changes in trade receivables 9 -756 -238

Changes in other receivables and prepaid expenses 10 -135 -74

Changes in inventories 11 -360 1 188

Changes in trade payables -456 -498

Changes in other and accrued liabilities 17/ 18 385 -871

Cash flow from operating activities 4 521 5 190

Investments in property, plant and equipment 12 -1 750 -1 154

Divestments of property, plant and equipment 207 62

Investments in intangible assets 13 -177 -69

Divestments of financial assets 0 927

Interest and dividends received 33 38

Cash flow from investing activities -1 687 -196

Increase of financial liabilities 0 1 549

Decrease of financial liabilities 0 -1 860

Purchase of treasury shares -375 0

Exercise of stock options 335 0

Consideration received for issue of stock options 35 0

Repurchase of stock options -169 -45

Dividends paid -1 631 -1 894

Cash flow from financing activities -1 805 -2 250

Increase in cash and cash equivalents 1 029 2 744

Cash and cash equivalents at beginning of the year 23 386 20 427

Translation differences on cash and cash equivalents -380 215

Cash and cash equivalents at end of the year 8 24 035 23 386

Datacolor Group

23

1) The share capital as of September 30, 2012 consists of 168 044 (previous year: 168 044) registered shares with a nominalvalue of CHF 1 each, translated to CHF / USD with the closing rate as of September 30, 2008.

2) Equals the historical purchase value of 14 484 treasury shares (previous year: 16 801). Shares purchased before October 1, 2008 were translated at the CHF / USD closing rate as of September 30, 2008. In the period ended September30, 2012 Datacolor purchased 923 registered shares at an average share price of CHF 383.60 for a total amount of TUSD 375.

3) The capital reserve comprises reserves from capital contributions confirmed by Swiss tax authorities (refer to the statutoryfinancial statements of Datacolor AG) and the result of the execution of stock options.

4) The retained earnings contain legal reserves that are subject to certain legal restrictions with regard to their distribution.5) A dividend of CHF 10 (previous year: CHF 12) per share was distributed in the reporting period. 6) For further information regarding the exercise of stock options refer to note 21 to the consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in TUSDShare

capital1)Treasuryshares2)

Capitalreserves3)

Retainedearnings4)

Accumulatedtranslation

differences

Total retainedearnings

Total share -holders’

equity

Balance as of 1.10.2010 153 -4 924 0 31 420 -158 31 262 26 491Dividends paid5) -1 894 -1 894 -1 894Purchase of treasury shares 0 0Translation differences 347 347 347Profit for the year 3 775 3 775 3 775Balance as of 30.09.2011 153 -4 924 0 33 301 189 33 490 28 719

Balance as of 1.10.2011 153 -4 924 0 33 301 189 33 490 28 719Dividends paid5) -1 631 -1 631 -1 631Reclassification of capital contribution reserve 2 609 -2 609 -2 609 0Exercise of stock options6) 974 -269 0 705Purchase of treasury shares -375 0 -375Translation differences -53 -53 -53Profit for the year 4 218 4 218 4 218Balance as of 30.09.2012 153 -4 325 2 340 33 279 136 33 415 31 583

Datacolor Group

24

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 General policies for the consolidated financial statements

General

Datacolor AG is a Swiss limited company, domiciled in Lucerne and is the parent company of the Datacolor

Group, a worldwide leading provider of solutions for color measurement, management, communication and

calibration.

Basis of preparation

The consolidated financial statements were prepared in accordance with Swiss GAAP FER and comply with

Swiss law.

The consolidated financial statements have been prepared in US Dollar (USD) and were rounded to the near-

est thousand unit. The consolidated financial statements are prepared on a historical cost basis, except for

financial current assets and derivative financial instruments which are recorded at market value.

The preparation of consolidated financial statements in accordance with Swiss GAAP FER requires manage-

ment to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets

and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. Such estimates

and assumptions are based on management’s best judgement at the date of the financial statements. In

case such estimates deviate in the future from the actual circumstances, the original estimates and assump-

tions will be modified as appropriate for the year in which the circumstances change.

Scope of consolidation

The consolidated financial statements include the financial statements of Datacolor AG and its subsidiaries

that are controlled by Datacolor AG. Control is presumed to exist when Datacolor AG owns, directly or indi-

rectly through subsidiaries, more than one half of the voting power of an enterprise or otherwise exercises

management control. Refer to note 28 to the consolidated financial statements for a listing of all Group entities

that are included in the consolidation.

The closing date for the financial statements of Datacolor AG and all its subsidiaries is September 30, with

the exception of Datacolor Technology (Suzhou) Co., Ltd. and Datacolor Trading (Shanghai) Co., Ltd. (both

as of December 31) as well as Datacolor Solutions Private Limited, domiciled in Mumbai (March 31) for which

interim financial statements as of September 30 are prepared for consolidation purposes.

There were no changes in the scope of consolidation during the fiscal year 2011/12 and previous year. As

of October 1, 2011 the Belgian Branch of Datacolor International Ltd. was transferred into a new independent

legal entity (Datacolor Belgium BVBA). This change did not imply any change to the scope of consolidation.

Principles of consolidation

The assets and liabilities included in the consolidated financial statements are measured according to uniform

principles.

Intragroup balances, intragroup transactions and material unrealized profits resulting from intragroup trans-

actions are eliminated in the course of consolidation. Acquired (disposed) subsidiaries are consolidated (de-

consolidated) upon the date of change of control.

Foreign currency translation

The financial statements of Datacolor AG and its subsidiaries are translated into US Dollar (reporting currency)

for consolidation purposes.

Assets and liabilities of subsidiaries denominated in foreign currency are translated at the exchange rate

prevailing at the balance sheet date, the income statement is translated into the reporting currency at average

exchange rate of the respective reporting period. Foreign currency differences deriving from the translation

of equity and results of subsidiaries are recorded directly in retained earnings.

Datacolor Group

25

In the financial statements of the individual subsidiaries transactions in foreign currencies are recorded at

the exchange rate prevailing at the date of transaction. Assets and liabilities denominated in foreign curren-

cies are translated at the rate of exchange at the balance sheet date. All resulting differences are recognized

as exchange gains or losses in the income statement of the individual subsidiary.

Segment reporting

Segment information is presented following different geographic areas and disclosing segment net sales,

assets and average number of employees.

2 Accounting principles

Net sales and revenue recognition

Net sales include all invoiced sales and services to third parties. Net sales is considered realized when the

economic benefits and risks associated with the ownership and legal title of sold products or rendered serv-

ices are transferred to the transacting third party.

The major portion of net sales is made by selling hardware products and software. Revenue resulting from

such transactions is recognized based on the underlying incoterms. As a result of the global customer base

and various international distribution channels different incoterms are applied. Most maintenance contracts

of the service business have a term of 12 months. Therefore, these sales are recognized on a proportioned

basis over the contract period. Datacolor AG and its subsidiaries are not undertaking project business that

would require an estimate of the project realization.

Stock option plan

As part of the performance oriented, variable compensation for members of the Executive Committee and

the Board of Directors, a portion of the variable compensation can be used for the purchase of stock options

for obtaining Datacolor registered shares. The maximum number of stock options is determined by the Human

Resource and Compensation Committee and depends on the attainment of individual performance objectives

within the past period and the operating performance of the Datacolor Group.

The option premium is fixed and the strike price is valuated using the Black-Scholes-formula. The options

are not linked to any further conditions. After allotment, the stock options have a blocking period of three

years. Subsequent to the three year blocking period the options can be exercised within the following seven

years. On execution of the stock option a settlement with Datacolor shares is intended.

The option premium of the expected option allocation is recorded under payroll expenses in the period in

which the service has been rendered. For options which can already be exercised or for which the blocking

period expires within one year, the fair value of the personal expense at the date of allotment is recorded

under accrued liability. For stock options with a remaining blocking period of at least one year the equivalent

value of payroll expenses recorded at granting of options is disclosed under other non-current liabilities. In

case of a termination of the employment relationship during the blocking period, the fair value of the option

can be paid out in cash in exceptional cases. The option holder receives at the minimum the initially paid op-

tion premium.

At the date of termination of an employment relationship of an option holder and when a cash settlement be-

comes apparent, the Group records the expected fair value compensation less the initial payroll expense. If

the termination of the employment relationship incurs after the balance sheet date but before the external re-

porting date, material transactions will be disclosed as post balance sheet events.

Deferred income taxes

Deferred income taxes are provided following the comprehensive balance sheet liability-method and reflect

in general all future temporary differences. The measurement of the deferred taxes is based on current tax

rates applicable for the respective taxable entity.

Deferred tax assets deriving from tax losses carried forward are only capitalized when the likelihood of re-

coverability is high and future taxable profits are sufficient to recover tax benefits stemming from the tax

losses.

Datacolor Group

26

Impairment of assets

The carrying amounts of non-current assets are reviewed for impairment at each balance sheet date or if

there are indications that an asset may be impaired. If an indication of potential impairment exists, the recov-

erable amount of the respective asset is determined. If the carrying values exceed the estimated recoverable

amounts, the assets are written down to their recoverable amounts. Impairment losses are recognized in the

income statement. The recoverable amount is the higher of the estimated asset’s net selling price and its

value in use. The net selling price is the amount recoverable from the sale of an asset in an arm’s length

transaction between independent parties less the cost of disposal. The value in use is the present value of

estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at

the end of its useful life.

Employee benefit obligations

The subsidiaries of Datacolor Group have different employee benefit plans in accordance with local regula-

tions and customs in the respective countries. These plans are organized in legally independent and

autonomous foundations. The plans cover most of the employees and provide benefits in case of death,

disability, retirement or termination of employment. Plans are funded predominantly by a combination of em-

ployee and employer contributions. Contributions are based on a certain percentage of the insured salary.

Employee benefits of Datacolor Group are organized with external pension insurance solutions or savings

institutions respectively, where Datacolor is not exposed to any further contribution commitments beyond the

regular contributions owed and recognized.

Cash and cash equivalents

Cash and cash equivalents include cash, bank accounts, demand deposits, money market instruments as

well as short-term deposits with terms not exceeding a period of three months.

Current financial assets

Current financial assets are investments in marketable securities that can be permanently liquidated at effi-

cient markets. They are measured at fair value, whereas unrecognized gains or losses are recorded in the fi-

nancial result of the income statement.

Trade receivables

The net trade receivables balance represents invoiced amounts less economically determined allowance for

specific debtor risk and less general allowance based on experience and reflection of the specific aging

structure. The general allowance is based on the assumption that the risk of default is increasing the more

the receivable is overdue.

Inventories

Inventories are measured at the lower of acquisition or production cost respectively, or net realizable value.

Cash discounts are considered as a decrease in acquisition cost.

Property, plant and equipment

Property, plant and equipment are recorded at acquisition cost less accumulated depreciation and any im-

pairment loss. Land is depreciated only if periodic appraisals reveal a sustained impairment loss. Material

elements of specific fixed asset items with different useful lifetimes are depreciated as separate objects.

Property, plant and equipment are depreciated on a straight-line basis according to economic criteria cor-

responding to the estimated useful life. Essentially, these are:

Buildings 30 – 40 years

Machinery and equipment 3 – 20 years

Vehicles 5 – 12 years

Datacolor Group

27

Intangible assets

Goodwill:

Goodwill represents the difference between the cost of the acquisition and the fair value of the identifiable

assets acquired less liabilities assumed. Goodwill is amortized on a straight-line-basis over a life time of five

to a maximum of twenty years.

Trademarks, licenses, and patents:

Trademarks, licenses, and patents are initially recorded at acquisition cost. Expenditures for internally gen-

erated trademarks are recognized as an expense in the current period. Acquired trademarks, licenses, and

patents are amortized on a straight-line basis of five to ten years.

Capitalized development costs and other intangible assets:

Research costs are charged to the Income statement. Development cost are only capitalized, if the following

criteria are cumulatively fulfilled: The development costs are identifiable and controlled by Datacolor, will

generate a measurable future benefit for more than one year, the expenses can be captured and measured

separately and it is likely that sufficient funds are available for finalizing and commercially exploiting devel-

oped products.

Other intangible assets primarily represent software and are capitalized at their acquisition costs and amor-

tized on a straight-line basis of five to ten years.

Derivative financial instruments

Derivative financial instruments are recognized as current or non-current financial assets or liabilities, de-

pending on the term. Datacolor AG and its subsidiaries are not applying Hedge Accounting. Therefore, market

gains and losses on the hedging instruments are recognized directly in financial result in the income statement

until the underlying transaction of a hedged risk is recognized in the balance sheet. Derivative financial in-

struments are disclosed at market value in the balance sheet.

Provisions

Provisions are made for potential present obligations with uncertain timing or amounts as a result of a past

event and for which a future outflow of resources is probable. The amount is based on the best possible es-

timate of the expected outflow of resources. The break down into short-term and long-term provision is based

on the expected use within one year.

Treasury shares

Treasury shares are reported at historical acquisition cost and shown as a deduction from equity.

Contingent liabilities

Contingent liabilities are measured on the basis of the respective probability and impact of future unilateral

cash outflows and are disclosed in the notes to the consolidated financial statements.

Datacolor Group

28

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The figures below are stated in thousands of US dollars (TUSD) unless otherwise indicated.

3 Segment reporting

4 Earnings per share (EPS)

Earnings per share were calculated by dividing the Datacolor Group’s profit for the year by the average

number of shares outstanding (issued shares less treasury shares). Diluted earnings per share include the

effect of dilution, which would arise as a result of exercising stock options.

Geographical segments2011 / 2012 in % of 2010 / 2011 in % of

total total

Net sales to third parties 55 912 100.0% 55 456 100.0%

Europe 21 530 38.5% 22 957 41.4%

Americas 16 891 30.2% 15 615 28.2%

Asia Pacific 17 491 31.3% 16 884 30.4%

in % of in % oftotal total

Assets 49 234 100.0% 47 342 100.0%

Europe 21 154 43.0% 22 310 47.1%

Americas 17 994 36.5% 14 831 31.3%

Asia Pacific 10 086 20.5% 10 201 21.6%

in % of in % of

total total

Average number of employees 311 100.0% 278 100.0%

Europe 66 21.2% 59 21.2%

Americas 96 30.9% 95 34.2%

Asia Pacific 149 47.9% 124 44.6%

2011 / 2012 2010 / 2011

Profit for the year 4 218 3 775

Average number of shares outstanding 153 095 151 243

Basic earnings per share in USD 27.55 24.96

Effect of dilution: Number of share options 8 342 8 734

Adjusted average number of shares for diluted earnings per share 161 437 159 977

Diluted earnings per share in USD 26.13 23.60

Datacolor Group

29

5 Personnel expenses

6 Financial result

7 Income taxes

Deferred tax assets amounting to TUSD 675 (previous year: TUSD 764) consist primarily of capitalized

tax assets deriving from tax losses carried forward. The total amount of tax losses carried forward is USD

11.3 Mio. (previous year: USD 13.1 Mio.) and the predominant part can be used without any time restrictions.

Deferred tax assets and liabilities are recorded on the basis of local tax rates with an average tax rate of

22.0% (previous year: 22.0%).

2011 / 2012 2010 / 2011

Salaries 18 039 16 558

Social security costs 3 947 3 562

Pension costs 20 660 665

Other personnel expenses 791 628

Personnel expenses 23 437 21 413

2011 / 2012 2010 / 2011

Current income taxes -669 -725

Deferred income taxes -63 -101

Income taxes -732 -826

2011 / 2012 2010 / 2011

Interest income 24 25

Dividend income 0 13

Gain on securities 9 53

Foreign exchange gains 466 3 145

Financial income 499 3 236

Interest expense -32 -14

Foreign exchange losses -920 -3 350

Financial expenses -952 -3 364

Financial result, net -453 -128

Datacolor Group

8 Cash and cash equivalents

Bank accounts, postal accounts and short-term deposits generated interest at market rates.

9 Trade receivables

10 Other receivables

11 Inventories

30

30.09.2012 30.09.2011

Work in progress 117 2% 30 1%

Semi-finished and finished goods 4 646 74% 5 386 93%

Trading goods 1 552 24% 403 6%

Gross inventories 6 315 100% 5 819 100%

Allowances -2 546 -40% -2 395 -41%

Net inventories 3 769 60% 3 424 59%

30.09.2012 30.09.2011

Other receivables from

– Third parties 278 114

– Government 352 343

– Pension funds 12 11

– Related parties 95 66

Prepayments to third parties 208 337

Other receivables 945 871

30.09.2012 30.09.2011

Trade receivables, gross 7 846 100% 7 063 100%

Allowance for doubtful debts -569 -7% -433 -6%

Trade receivables, net 7 277 93% 6 630 94%

30.09.2012 30.09.2011

Cash on hand, postal accounts 8 6

Cash at bank 24 027 23 380

Cash and cash equivalents 24 035 23 386

Datacolor Group

31

12 Property, plant and equipment

Other mobile fixed assets contain primarily machines, furnishings, equipment and vehicles.

In the reporting period, the result of the disposal of property, plant and equipment amounted to TUSD 37

(previous year: loss TUSD -35).

The main disposals related to fully depreciated fixed assets with small individual acquisition costs.

The fire insurance value of the tangible fixed assets amounted to TUSD 27 150 (previous year: TUSD 24 510).

Operating properties

Other mobile fixed assets

Total property, plantand equipment

Acquisition or production costs

Balance as of 1.10.2010 11 521 10 631 22 152

Additions 328 826 1 154

Disposals 0 -2 377 -2 377

Translation differences 17 34 51

Balance as of 30.09.2011 11 866 9 114 20 980

Additions 160 1 590 1 750

Reclassifications -31 31 0

Disposals 0 -259 -259

Translation differences -6 -91 -97

Balance as of 30.09.2012 11 989 10 385 22 374

Accumulated depreciation

Balance as of 1.10.2010 4 454 9 253 13 707

Additions 277 564 841

Disposals 0 -2 280 -2 280


Balance as of 30.09.2011 4 746 7 570 12 316

Additions 282 683 965

Reclassifications -2 2 0

Disposals 0 -89 -89


Balance as of 30.09.2012 5 020 8 075 13 095

Net carrying amount

Balance as of 30.09.2011 7 120 1 544 8 664

Balance as of 30.09.2012 6 969 2 310 9 279

Datacolor Group

32

13 Intangible assets

Capitalized development costs and other intangible assets include primarily the group-wide utilized ERP

system.

As in the previous year from the total research and development expenses amounting to TUSD 5 785 (pre-

vious year: TUSD 6 632) no expenses were capitalized, because not all criteria for a capitalization were met

(refer to note 2 Accounting principles).

14 Risk management and internal controls

Due to its international business, the Datacolor Group is exposed to different operational and strategical

risks which are assessed on an ongoing basis by a centralized risk management process. The risks classi-

fications are based on the analysis of the probability and exposure. As a result, action plans to reduce or

avoid risks are prepared. On a yearly basis, a consolidated risk report is presented to the Board of Directors

for approval.

For identified risks relating to financial reporting and accounting, a risk assessment is performed. The group-

wide internal controls framework for the financial reporting defines relevant key controls that reduce financial

risks. Moreover, the Datacolor Group is targeting to develop a control environment that ensures a disciplined

management of the existing risks.

The financial risks include credit, illiquidity, foreign exchange and interest risks.

Credit risk

Credit risk is the risk to incur financial losses and arise when customers or a counterparty of a financial

instrument are unable to meet their obligations as agreed.

Credit risks are managed by an adequate ongoing observation of the daily business and carrying out a risk

assessment before entering a transaction.

Capitalized development costs

and other intangible assets

Trademarks, licenses,

patents TotalAcquisition or production costs

Balance as of 1.10.2010 12 644 133 12 777

Additions 69 0 69


Balance as of 30.09.2011 13 007 133 13 140

Additions 173 4 177

Translation differences -152 0 -152

Balance as of 30.09.2012 13 028 137 13 165

Accumulated amortization

Balance as of 1.10.2010 10 089 10 10 099

Additions 386 3 389


Balance as of 30.09.2011 10 697 13 10 710

Additions 421 4 425

Translation differences -149 0 -149

Balance as of 30.09.2012 10 969 17 10 986

Net carrying amount

Balance as of 30.09.2011 2 310 120 2 430

Balance as of 30.09.2012 2 059 120 2 179

Datacolor Group

33

The default risk in terms of trade receivables is limited, since the customer base of the Datacolor Group

consists of a large number of customers from various geographical regions. Nevertheless, the risk

management process stipulates an individual customer risk assessment in case of excess of certain credit

limits.

Risk of illiquidity

The centralized cash management ensures that the Datacolor Group has always sufficient liquidity to settle

outstanding liabilities on time. The Executive Committee implemented guidelines and processes for a

liquidity planning adopted to the Group's needs.

Foreign currency risk

The Datacolor Group is exposed to foreign currency risks by virtue of its international focus. These risks

occur in transactions which take place in currencies other than the functional currency of the company con-

cerned, in particular when purchasing or selling goods. Such transactions are primarily settled in EUR and

USD. The individual companies plan their expected payment flows on a regular basis and report these to

the Group Executive Committee.

The difference between incoming and outgoing payments in a specific foreign currency, particularly in USD

and EUR, is considered as not immaterial. Remaining net positions are monitored by Group Management

and hedged on a selective basis if deemed necessary.

The following exchange rates of the most important currencies for the Group were used for translation into

US Dollar:

Interest risk

Interest risk comprise an interest-rate related cash flow risk, i.e. the risk that future interest payments will

change due to fluctuations in the market interest rate, together with an interest rate related risk of a change

in fair value, i.e. the risk that the fair value of a financial instrument changes due to fluctuations in the market

interest rate.

The consolidated financial statements of the Datacolor Group as per September 30, 2012 do not include

any financial liabilities that are subject to an interest rate change risk.

Derivative financial instruments

In the course of its business activities, Datacolor generates cash surpluses in EUR that are exchanged by

foreign currency forward instruments into USD.

As of September 30, 2012 no derivative financial instruments were pending.

The nominal value of the forward exchange contracts which were exchanged into USD in the business year

2011/12 amounted to TEUR 2 900. The replacement value of the forward exchange contracts amounted to

TUSD 327 as of September 30, 2011 and was disclosed under current financial assets.

Balance Sheet Income Statement

Currency Unit 30.09.2012 30.09.2011 2011 / 2012 2010 / 2011

CHF 1 1.07 1.11 1.08 1.10EUR 1 1.29 1.36 1.31 1.40GBP 1 1.62 1.56 1.57 1.62

Financial instrument Contract value Positive fair value Negative fair value Purpose

2012 2011 2012 2011 2012 2011

Forward exchange contracts 0 3 931 0 327 0 0 Hedging

Datacolor Group

34

15 Financial assets

16 Financial liabilities

No financial liabilities were outstanding in the reporting period (previous year: 0).

Available and unused credit lines for Datacolor Group remain unchanged at CHF 6.5 million (previous year:

CHF 6.5 million).

During the previous period the credit line had been drawn down intermediately for an amount of TCHF 1 500

that had been completely redeemed before fiscal year-end.

17 Other liabilities

The non-current liabilities include the long-term portion of the stock option plan of TUSD 1 252 (previous

year: TUSD 1 101). Refer to note 2 Accounting principles.

30.09.2012 30.09.2011

Securities held for trading 376 351

Positive replacement value of derivative instruments 0 327

Current financial assets 376 678

Other financial assets 196 153

Non-current financial assets 196 153

Financial assets 572 831

30.09.2012 30.09.2011

Credit lines available (TCHF 6 500) 6 924 7 222

Unused credit lines (TCHF 6 500) 6 924 7 222

30.09.2012 30.09.2011

Other current liabilities against– Third parties 227 235

– Government 307 329

Prepayments from third parties 815 664

Other current liabilities 1 349 1 228

Other non-current liabilities 1 747 1 553

Other liabilities 3 096 2 781

Datacolor Group

35

18 Accrued liabilities

The liability resulting from the stock option plan amounts to TUSD 1 552 (previous year: TUSD 1 502) of

which the non-current part is disclosed under other non-current liabilities. Refer to note 2 Accounting prin-

ciples and note 21 Stock option plan.

19 Provisions

Provisions for warranty cover potential warranty claims, which are likely to incur based on the experience of

past warranty cases. The calculation is based on realized sales transactions for which a warranty promise

has been given, the probability of warranty cases and associated internal and external warranty costs.

Provisions for restructuring and other provisions cover mainly expenses resulting from the operational and

organizational changes undertaken in fiscal year 2008 / 09. Beside liabilities arising from seller’s warranties

granted upon the sale of the real estate activities further liabilities are stemming from operational rent obli-

gations for abandoned lease objects with a residual rental period up to 2016.

WarrantyRestructuring /

Other Total

Balance as of 1.10.2010 323 533 856

Additions 263 2 265

Used -248 -140 -388

Reversed 0 0 0


Balance as of 30.09.2011 346 419 765

Disclosed in consolidated balance sheet as:

Short term provision 346 192 538

Long term provision 0 227 227

Balance as of 1.10.2011 346 419 765

Additions 314 0 314

Used -302 -46 -348

Reversed 0 -66 -66


Balance as of 30.09.2012 353 298 651

Disclosed in the consolidated balance sheet as:

Short term provision 353 85 438

Long term provision 0 213 213

30.09.2012 30.09.2011

Accrued service contracts / costs 5 864 5 234

Employee related accruals 2 651 2 906

Stock option plan 300 401

Year-end closing (audit, tax consulting, bookkeeping) 307 490

Other accrued expenses 1 320 1 554

Accrued liabilities 10 442 10 585

Datacolor Group

36

20 Employee benefits

Economic benefit / economic liability and pension expenses

Most pension plans are financed through contributions from the employer and employee. Contributions are

calculated as a percentage of the insured salary.

In Switzerland the pension plan is regulated through an independent community fund (‘Gemeinschafts -

stiftung’). The actuarial coverage according to Art. 44 BVV2 was at 105.5% as of September 30, 2012, at

101.8% as of December 31, 2011 and 100.1% as of September 30, 2011. In contrary to an independent

collective fund (‘Sammelstiftung’), the community fund (‘Gemeinschaftsstiftung’) is not required to prepare

individual statements for each associated company in accordance with Art. 48b BVV2. Therefore no eco-

nomic share of the company is disclosed. The pension liability of TUSD 357 (previous year: TUSD 324) orig-

inates from pension plans of the German subsidiary. The amount of service duration depending pension

liabilities is based on actuarial calculations. Other foreign plans are pure defined contribution plans.

21 Stock option plan

As part of the performance-related compensation stock options to obtain Datacolor registered shares are

granted to the Board of Directors and certain members of the Executive Committee. For the exercise of the

option rights conditional share capital of CHF 4 580 for 4 580 registerd shares with a nominal value of

CHF 1 each is available (see page 14 Information for Investors). The strike price and option repurchase

values are calculated using the financial option pricing model Black-Scholes. The option premium is set at

CHF 125 or CHF 50 respectively depending of the domicile of the beneficiary.

The expense recorded in the reporting period amounts to TUSD 446 (previous year: TUSD 309) and the

total liability recorded amounts to TUSD 1 552 (previous year: TUSD 1 502) of which the current portion of

TUSD 300 (previous year: 401) is disclosed as accrued liability and the non-current portion of TUSD 1 252

(previous year: TUSD 1 101) is recorded in other non-current liabilities. In the reporting period 1 240 options

have been bought back from a leaving Executive Committee member and 3 240 options have been exer-

cised to receive Datacolor registered shares with a book value of TUSD 974. The effective grant of options

was 4 940 options exceeding the expected granting of 3 208 options; this deviation did not cause any further

expense.

The exercise price for the options expected to be granted for the reporting period corresponds to the fiscal

value and has been determined by using the Black-Scholes valuation model. The following significant input

variables were used in the valuation process: The average share price of the financial year 2011/12 of CHF

387 (previous year: CHF 403), a discount of 6% for each year of the blocking period, the exercise prices

shown on the following page, the standard deviation of expected share price returns of 20.7% (previous

year: 17.5%), a dividend yield of 5.0% (previous year: 5.0%), the option term of ten years and the annual

risk-free interest rate of 0.59% (previous year: 0.98%). The volatility assumption applied in the valuation

model is based on the actual volatility since January 1, 2011 using weekly share prices.

Surplus/ deficit

according topension

plans underSwiss GAAP

FER 26Economic share of the company

Changecompared

to pre-vious year,recognized

in the period

Accruedcontribu -

tions for the period

Pension plan expenses in personnel expenses

30.09.2012 30.09.2012 30.09.2011 2011 / 2012 2011 / 2012 2010 / 2011

Pension plans without ownassets (abroad) 0 357 324 33 0 480 456Pension plans with surplus /deficit (Switzerland) 0 0 0 0 0 180 209

Total 0 357 324 33 0 660 665

Datacolor Group

37

Grant

Number ofoutstanding

options1.10.2010

and ex-pected

granting

Exer -cise

price(CHF)1)

Expira-tion of

blockingperiod

Expira-tion of

exerciseperiod

Reclas-sifica-

tion

Number ofoptions

exercised2010 / 2011

Number ofoptions re-purchased2010 / 2011


options30.09.2011

and expected granting

Fiscal Year

2008 (strike price CHF 220) 800 270 1.10.11 1.10.18 320 1 120

2008 (strike priceCHF 50) 2 888 175 1.10.11 1.10.18 -320 -128 2 440

2009 (strike priceCHF 173) 1 360 223 1.10.12 1.10.19 1 360

2009 (strike priceCHF 11) 1 968 136 1.10.12 1.10.19 -128 1 840

2010 (strike priceCHF 194) 3 100 244 1.10.13 1.10.20 3 100

2010 (strike priceCHF 31) 2 080 156 1.10.13 1.10.20 2 080

Total carry forward 12 196

2011 (expected granting) 260 1.10.14 1.10.21 1 440


Total 12 196 0 0 -256 15 028

1) including the option premium of CHF 50 or CHF 125 respectively

Grant


options1.10.2011

and ex-pected

granting

Exer -cise

price(CHF)1)

Expira-tion of

blockingperiod

Expira-tion of

exerciseperiod

Reclas-sifica-

tion

Number ofoptions

exercised2011 / 2012

Number ofoptions re-purchased2011 / 2012


options30.09.2012

and expected granting

Fiscal Year

2008 (strike price CHF 220) 1 120 270 1.10.11 1.10.18 -800 -320 0

2008 (strike price CHF 50) 2 440 175 1.10.11 1.10.18 -2 440 0

2009 (strike price CHF 173) 1 360 223 1.10.12 1.10.19 -320 1 040

2009 (strike price CHF 11) 1 840 136 1.10.12 1.10.19 1 840

2010 (strike price CHF 194) 3 100 244 1.10.13 1.10.20 -600 2 500

2010 (strike price CHF 31) 2 080 156 1.10.13 1.10.20 2 080

2011 (strike price CHF 210) 3 200 260 1.10.14 1.10.21 3 200

2011 (strike price CHF 85) 1 740 210 1.10.14 1.10.21 1 740

Total carry forward 16 880



Total 16 880 0 -3 240 -1 240 17 680

1) including the option premium of CHF 50 or CHF 125 respectively

Datacolor Group

38

22 Related parties and companies

Datacolor AG has related party relationships with its subsidiaries, their pension plans and with members of

the Board of Directors and with the Executive Committee.

Group companies

A list of the Datacolor Group subsidiaries is included in note 28. Transactions between Datacolor AG and

its subsidiaries and between subsidiaries of Datacolor Group are eliminated in the course of consolidation.

There are no associated companies or joint ventures.

Total payments to non-executive members of the Board of Directors were TUSD 557 in the reporting period

(previous year: TUSD 548).

The remuneration paid to the Board of Directors and Executive Committee in the reporting year is shown

below:

Remuneration 2011/2012

Remunerations paid to former members of the Executive Committee in financial year 2011/12 amounted to

TUSD 195 (previous year: TUSD 723).

Remuneration of the Board of Directors

Highest total remuneration

Remunera-tion paid

in cashPension

costs

Stock optionbased

compensation TotalBoard of Directors and Executive Committee

To five non-executive members of the Board of Directors 322 0 235 557

To six members of the Executive Committee 1 471 116 173 1 760

Total 1 793 116 408 2 317

Remunera-tion paid

in cashPension

costs

Stock optionbased

compensation Total

Werner Dubach, Chairman 197 0 122 319

Dr. Peter Beglinger, Deputy Chairman 41 0 49 90

Anne Keller Dubach, member 34 0 0 34

Prof. Dr. Hans Peter Wehrli, member 24 0 32 56

Dr. Fritz Gantert, member 26 0 32 58

Total 322 0 235 557

Remunera-tion paid

in cashPension

costs

Stock optionbased

compensation Total

Albert Busch 395 17 48 460

Datacolor Group

39

Remuneration 2010 / 2011

Remunerations paid to former members of the Executive Committee in financial year 2010 / 11 amounted to

TUSD 723 (previous year: TUSD 89).

Remuneration of the Board of Directors

Highest total remuneration

Investments as of September 30

The total number of shares held by the Board of Directors and Executive Committee amounted to 115 818

(previous year: 85 533, including the investments of Mrs. Anne Keller Dubach, new member of the Board of

Directors as of January 10, 2012, 113 633). In the reporting period 4 940 options (previous year: 5 180)

were granted to the Board of Directors and Executive Committee.

No material receivables or liabilities between the Company and its related parties existed at the end of both

the reporting period and the previous year, with the exception of pension plans.

Additional information on the governing bodies, together with the content and procedures for determining

compensation and participation programs are described in the section Corporate governance.

Remunera-tion paid

in cashPension

costs

Stock optionbased

compensation TotalBoard of Directors and Executive Committee

To four non-executive members of the Board of Directors 345 0 203 548

To nine members of the Executive Committee 2 236 106 253 2 595

Total 2 581 106 456 3 143

2012Number

of shares

2011Number

of shares

2012Number

of options

2011Number

of options

Werner Dubach, chairman 86 253 84 653 2 540 3 240

Dr. Peter Beglinger, deputy chairman 1 010 650 1 080 1 080

Anne Keller Dubach, member 28 100 28 100 0 0



Executive Committee 0 0 7 340 6 180

Total 115 818 113 633 12 400 11 940

Remunera-tion paid

in cashPension

costs

Stock optionbased

compensation Total

Werner Dubach, Chairman 214 0 88 302

Dr. Peter Beglinger, Deputy Chairman 59 0 49 108



Total 345 0 203 548

Remunera-tion paid

in cashPension

costs

Stock optionbased

compensation Total

Albert Busch 496 17 55 568

Datacolor Group

40

23 Leasing liabilities

As in the previous year, no obligations from finance lease contracts were outstanding as of closing date.

The following overview shows future liabilities arising from non-capitalized operating lease contracts

arranged in order of the due dates:

The leasing expenses in the financial year amount to TUSD 129 (previous year: TUSD 169).

24 Contingent liabilities

There were no sureties, guarantee obligations or pledged assets in favor of third parties either in the report-

ing period nor in the previous year.

The Company is involved in legal disputes, lawsuits and court cases in the ordinary course of business. As

far as the Company can ascertain at the current point in time, such disputes are not expected to exceed

existing provisions or otherwise exert a material influence on its financial situation or operating result.

25 Securing of own liabilities

No assets were pledged to secure own liabilities either in the reporting period or in the previous period.

26 Acquisitions

No aquisitions have been executed either in the reporting period or in the previous period.

27 Subsequent events

The consolidated financial statements were approved for publication by the Board of Directors on November

13, 2012. They have yet to be approved by the general meeting.

The Board of Directors is to propose to the general meeting that a dividend of CHF 11 per share or

TCHF 1 689 be paid for the financial year 2011 / 2012.

Between the balance sheet date and November 13, 2012 no further significant events which might have an

influence on the information presented in the 2011 / 2012 annual financial statements or require disclosure

in this report occured.

30.09.2012 30.09.2011

Due in reporting period + 1 year 95 85

Due in reporting period + 2 years 65 40

Due in reporting period + 3 years 31 27

Due in reporting period > 3 years 5 14

Total operating lease liabilities 196 166

Datacolor Group

41

28 Group entities

1) These companies are held directly by Datacolor AG.

Company Location CurrencyShare capital

in ’000Ownership

interest in %

Datacolor Holding AG1) CH-Lucerne CHF 10 000 100

Datacolor AG Europe CH-Dietlikon CHF 2 000 100

Datacolor Logistik AG CH-Lucerne CHF 1 000 100

Datacolor International France SAS FR-Paris EUR 274 100

Datacolor GmbH DE-Marl EUR 256 100

Datacolor Asia Pacific (HK) Ltd. HK-Hong Kong HKD 10 100

Datacolor Inc. US-Lawrenceville USD 35 808 100

Datacolor International Ltd. GB-Altrincham GBP 7 500 100

Datacolor Belgium BVBA BE-Melle EUR 186 100

Datacolor Italia S.r.l. IT-Bergamo EUR 20 100

Datacolor Technology (Suzhou) Co., Ltd. CN-Suzhou USD 3 200 100

Datacolor Trading (Shanghai) Ltd. CN-Shanghai CNY 1 364 100

Datacolor Solutions Private Ltd. IN-Mumbai INR 100 100

MABAG AG1) CH-Lucerne CHF 100 100

Datacolor Group

43

REPORT OF THE STATUTORY AUDITOR ON THE CONSOLIDATED FINANCIAL STATEMENTS

to the General Meeting of Shareholders of Datacolor AG, Lucerne

As statutory auditor, we have audited the accompanying consolidated financial statements of Datacolor AG,which comprise the income statement, balance sheet, cash flow statement, statement of changes in equityand notes, as set out on pages 20 to 41 for the year ended September 30, 2012.

Board of Directors’ ResponsibilityThe board of directors is responsible for the preparation and fair presentation of the consolidated financialstatements in accordance with Swiss GAAP FER and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation andfair presentation of consolidated financial statements that are free from material misstatement, whether dueto fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit.We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in theconsolidated financial statements. The procedures selected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatement of the consolidated financial statements, whether dueto fraud or error. In making those risk assessments, the auditor considers the internal control system relevantto the entity’s preparation and fair presentation of the consolidated financial statements in order to designaudit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropria-teness of the accounting policies used and the reasonableness of accounting estimates made, as well asevaluating the overall presentation of the consolidated financial statements. We believe that the audit evi-dence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements for the year ended September 30, 2012 give a true andfair view of the financial position, the results of operations and the cash flows in accordance with Swiss GAAPFER and comply with Swiss law.

Report on Other Legal Requirements

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

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

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

KPMG AG

Thomas Studhalter Sandro MascarucciLicensed Audit Expert Licensed Audit ExpertAuditor in Charge

Root / Lucerne, November 13, 2012

Datacolor Group

45

Datacolor AGBalance Sheet 46

Income Statement 47

Statement of Changes in Equity 47

Notes 48

Proposed Appropriation of Available Earnings 50

Report of the Statutory Auditor on the Financial Statements 51

FINANCIAL REPORT


Datacolor AG

46

BALANCE SHEET

in TCHF 30.09.2012 30.09.2011

Assets

Cash and cash equivalents 584 599

Financial assets 353 315

Other receivables


– Group companies 1 018 977

– Related parties 75 0

Prepaid expenses 4 9

Current assets 2 078 7.8% 1 942 6.9%

Investments in group companies 2 10 100 10 100

Treasury shares 3 4 651 5 356

Loans to group companies 2 9 745 10 607

Non-current assets 24 496 92.2% 26 063 93.1%

Assets 26 574 100.0% 28 005 100.0%

Liabilities and shareholders’ equity

Other current liabilities


– Group companies 232 259

Accrued liabilities 4 736 746

Current liabilities 993 3.8% 1 083 3.9%

Other non-current liabilities 4 1 175 991

Non-current liabilities 1 175 4.4% 991 3.5%

Liabilities 2 168 8.2% 2 074 7.4%

Share capital 3 168 168

Legal reserves 84 84

Capital contribution reserve 3 2 476 0

Reserve for treasury shares 3 4 651 5 356

Available earnings 17 027 20 323

Shareholders’ equity 24 406 91.8% 25 931 92.6%

Liabilities and shareholders’ equity 26 574 100.0% 28 005 100.0%

Datacolor AG

47

INCOME STATEMENT

in TCHF 2011 / 2012 2010 / 2011

Service income 1 142 401

Other income 105 0

Financial income 485 890

Financial expenses -241 -161

Administrative expenses -1 476 -1 060

Income taxes -4 -26

Profit for the year 11 44

Datacolor AG

STATEMENT OF CHANGES IN EQUITY

in TCHFShare

capitalLegal

reserves

Capital contribution

reserve

Reserve for treasury

sharesFree

reservesAvailable earnings

Total sha-reholders’

equity

Balance as of 1.10.2010 168 84 0 5 356 0 22 094 27 702

Dividends paid -1 815 -1 815

Profit for the year 44 44

Balance as of 30.09.2011 168 84 0 5 356 0 20 323 25 931

Balance as of 1.10.2011 168 84 0 5 356 0 20 323 25 931

Dividends paid -1 536 -1 536 Allocation/ Reclassification 2 476 -2 476 0

Profit for the year 11 11Changes in treasury shares -705 705 0

Balance as of 30.09.2012 168 84 2 476 4 651 0 17 027 24 406

48

NOTES

1 Accounting and valuation principles

The financial statements of Datacolor AG comply with the Swiss Code of Obligations.

Financial assets

Current financial assets contain marketable, easily realizable securities held for trading. The fair value of

these assets is the market value as of the balance sheet date.

Investments and loans

Investments and loans are valuated at acquisition cost less accumulated amortization.

2 Investments in and loans to Group companies

Loans to Group companies are given on a long-term basis for financing purposes. The significant direct and

indirect investments of Datacolor AG in Group companies are disclosed in note 28 to the consolidated finan-

cial statements.

3 Shareholders’ equity

Share capital

The share capital of Datacolor AG of CHF 168 044 (previous year: CHF 168 044) is fully paid-in and consists

of 168 044 registered shares (previous year: 168 044) with a par value of CHF 1 each.

The shares are listed on the SIX Swiss Exchange Zurich under security ID 853 104.

Conditional share capital

As of September 30, 2012 conditional share capital is available for a maximum of CHF 4 580 (previous year:

CHF 4 580) with a par value of CHF 1 each.

In the year under review, no shares (previous year: 0) were issued out of the conditional share capital due to

exercised stock options.

Capital contribution reserve

The annual general meeting of Datacolor decided an allocation to the capital contribution reserve on January

10, 2012. The amount of CHF 2 475 502 is fully confirmed by the Swiss Federal Tax authorities and can be

distributed without deduction of the Swiss withholding tax.

Treasury shares

Datacolor AG holds a total of 14 484 (previous year: 16 801) treasury shares, carried at TCHF 4 651 (previous

year: TCHF 5 356). The voting rights for these shares are suspended. 12 400 treasury shares are reserved

for the stock option plan of the Datacolor Group.

Datacolor AG

2011/12 2010/11TCHF TCHF

Balance as of 1.10. 0 0

Additions 2 476

Disposals 0

Balance as of 30.09. 2 476 0

49

The share capital entitled to dividend payments amounts to CHF 153 560 (previous year: CHF 151 243).

In the year under review 3 240 options of the stock option plan (previous year: 0) were exercised and settled

with treasury shares.

Significant shareholders

The Board of Directors of Datacolor AG is aware of the following individual shareholders and jointly voting

shareholders’ groups whose holdings exceed 5% of all voting shares:

Dubach family 51.33% (previous year: 50.38%)

Keller family 16.72% (previous year: 16.72%)

Corisol Holding AG 7.72% (previous year: 7.72%)

Additional information

Information concerning compensation, loans and advances, as well as participations and options given to

current and former members of the Board of Directors and members of the Executive Committee are dis-

closed in note 22 to the consolidated financial statements.

4 Liabilities resulting from stock option plan

Information with respect to the stock option plan is disclosed in note 2 to the consolidated financial statements.

The long-term portion of the liabilitiy stemming from the stock option plan of TCHF 1 175 (previous year:

TCHF 991) is disclosed in the non-current liabilities. The accrued liabilities include the short-term portion of

the liability of TCHF 437 (previous year: TCHF 361).

5 Pledges and guarantees in favor of third parties

As of September 30, 2012 Datacolor AG has not provided any pledges or guarantees in favor of third parties.

6 Information on risk assessments

The assessment and control of risks within Datacolor Group is performed by applying a standardized, four

level risk management approach that includes the risk elements identification, analysis, control and report-

ing. Further information is stated in note 14 Risk management and internal controls to the consolidated

financial statements of Datacolor Group.

7 VAT taxation group

In the context of the taxation group for the Swiss value added tax Datacolor AG is jointly liable for the group

companies Datacolor Logistik AG, Lucerne, Datacolor AG Europe, Dietlikon and Datacolor Holding AG,

Lucerne.

2011 / 12 2010 / 11Carrying Carrying

Par value amount Par value amountTCHF TCHF Number TCHF TCHF Number

Balance as of 1.10. 17 5 356 16 801 17 5 091 16 801

Purchase of treasury shares 1 354 923 0 0

Exercise of stock options -4 -1 059 -3 240 0 0

Result 265

Balance as of 30.09. 14 4 651 14 484 17 5 356 16 801

Datacolor AG

50

PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

Proposal of the Board of Directors

The Board of Directors proposes that the available earnings of TCHF 17 027 of Datacolor AG are distributed as

follows:

Carry forward to new account TCHF 17 027

The Board of Directors transfers to allocate part of the confirmed capital contribution reserve of TCHF 2 476

to free reserves and to distribute as follows:

Allocation from confirmed capital contribution reserve to free reserves TCHF 1 689

Distribution of a dividend from capital contribution reserves TCHF -1 689

Total TCHF 0

The total distribution of CHF 1 689 160 corresponds to a dividend of CHF 11 per dividend-entitled share at

a par value of CHF 1. If this earnings appropriation proposal is accepted, the dividend will be paid on January

17, 2013 without deducting the Swiss withholding tax.

After distribution of a dividend the residual amount of the capital contribution reserve amounts to TCHF 787.

Datacolor AG

51

REPORT OF THE STATUTORY AUDITOR ON THE FINANCIAL STATEMENTS TO THE GENERAL MEETING OF SHAREHOLDERS OF

Datacolor AG, Lucerne

As statutory auditor, we have audited the accompanying financial statements of Datacolor AG, which com-prise the income statement, balance sheet, statement of changes in equity and notes, as set out on pages46 to 49 for the year ended September 30, 2012.

Board of Directors’ ResponsibilityThe board of directors is responsible for the preparation of the financial statements in accordance with therequirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing,implementing and maintaining an internal control system relevant to the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error. The board of directors is further res-ponsible for selecting and applying appropriate accounting policies and making accounting estimates thatare reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we planand perform the audit to obtain reasonable assurance whether the financial statements are free from materialmisstatement.

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

OpinionIn our opinion, the financial statements for the year ended September 30, 2012 comply with Swiss law andthe company’s articles of incorporation.

Report on Other Legal Requirements

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

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

We further confirm that the proposed appropriation of available earnings complies with Swiss law and thecompany’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG

Thomas Studhalter Sandro MascarucciLicensed Audit Expert Licensed Audit ExpertAuditor in Charge

Root / Lucerne, November 13, 2012

Datacolor AG

ADDRESSES

Headquarter Holding

Datacolor AGWaldstaetterstrasse 12CH-6003 Lucernewww.datacolor.com

Datacolor

USA

Datacolor Inc. 5 Princess Road08648 Lawrenceville NJ, USA Tel. +1 609 924 21 89 Fax +1 609 895 74 72 www.datacolor.com

Europe

Datacolor AG EuropeBrandbachstrasse 10CH-8305 DietlikonTel. +41 44 835 37 11Fax +41 44 835 38 35www.datacolor.com

As of January 1, 2013:Datacolor AG EuropeLoorenstrasse 9CH-8305 DietlikonTel. +41 44 835 37 11Fax +41 44 835 38 35www.datacolor.com

Asia

Datacolor Asia Pacific (HK) LimitedRoom 4301, 43 / F.Metroplaza, Tower II223 Hing Fong RoadKwai ChungHong KongTel. +852 2 420 82 83Fax +852 2 420 83 20www.datacolor.com

Documents

GB12 en V08:DC · 2016-11-21 · Datacolor is debt-free and has a high net cash position and an even stronger, very solid equity ratio. In view of the Company’s sound financial