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COMMITMENT INCHALLENGING TIMES

ANNUAL REPORT 2009

Annual Report

2 Report of the Chairman and the CEO

8 Wireless Solutions

12 Network Testing

16 Security Communication

Corporate Governance

18 Corporate structure and shareholders

21 Capital structure

24 Board of Directors

30 Executive Board

31 Compensation, shareholdings and loans

34 Shareholders’ participation rights

35 Change of control and defensive measures

35 Auditors

36 Information policy

Remuneration Report

37 Remuneration Report

Financial Statements

43 Table of contents

44 Group

100 Holding

112 Important Group companies

115 Dates and contacts

Declaration of forward-looking statements

Publishing details

We deliver whatwe promise – that isour competence.

1ASCOM ANNUAL REPORT 2009 COMMITMENT IN CHALLENGING TIMES

COMMITMENT

IN CHALLENGING TIMES

Ascom sets the standard for high-level innovation and expertise in the field ofMission-Critical Communication worldwide.

The company focuses on the areas of Wireless Solutions (high-value, customer-specificon-site communication solutions), Network Testing (testing and optimization solutionsfor mobile networks) as well as Security Communication (secure, reliable communicationsolutions for alarm systems, mobilization and tactical communication).

Network Testing

0 100 200 300 400

Incoming orders in CHFm

2008

2009

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Revenue in CHFm

2008

2009

0 10 20 30 40

EBIT in CHFm

2008

2009

Wireless Solutions

EBIT in CHFm

2008

2009

0 10 20 30 40

Revenue in CHFm

2008

2009

0 100 200 300 400


2008

2009

0 100 200 300 400

Security Communication

0 100 200 300 400


2008

2009

0 100 200 300 400

Revenue in CHFm

2008

2009

0 10 20 30 40

EBIT in CHFm

2008

2009

ASCOM ANNUAL REPORT 2009 REPORT OF THE CHAIRMAN AND THE CEO2

Dear Shareholders

Despite a difficult economic environment, Ascom can look

back on an encouraging year. At CHF 24.4 million, Group profit

was well above the prior-year result of CHF 8.2 million. Sup-

ported by the acquisition of TEMS, revenue grewby 5.5% (10.9%

at constant exchange rates) to CHF 537.2million (previous year:

CHF 509.2 million).

Ascom’s business model proved its robustness in the

severest recession for decades, with all divisions recording positive results. At EBITDA level (includ-

ing restructuring and integration costs of CHF 8.3 million) the result was CHF 49.8 million, with an

encouraging margin of 9.3%.

In 2009, Ascom consistently implemented its niche strategy of Mission-Critical Communi-

cation. With the acquisition of TEMS, a business unit of Ericsson, our company succeeded in taking

a strategically important development step andwithin 18months the newNetwork Testing Division

was established by combining the three targeted acquisitions with our existing in-house compe-

tences. In doing so, Ascom rapidly and proactively consolidated the “mobile network testing” niche

and thus created a world market leader in this business area.

As at 31 December 2009, Ascom has a solid balance sheet structure, and is a financially sound

technology group with cash and cash equivalents of CHF 127.7 million and an equity ratio of 29.4%.

Ascom records 10.9% revenue growth at constant exchange rates

Taking into account the pro rata consolidation of acquisitions, Ascom grew revenue by 5.5% to

CHF 537.2 million compared to CHF 509.2 million in 2008. At constant exchange rates, revenue growth

was 10.9%. Since around three-quarter of Group revenue was generated in international business, the

result was negatively affected by the weakness of the main currencies against the Swiss franc, on top

of the economic environment.

WhileWireless Solutions was affected in the first half of 2009 by the reluctance of many custom-

ers to invest due to the economic conditions, demand recovered towards year-end. In 2009, Wireless

Solutions recorded revenue totaling CHF 265.2 million, compared with CHF 308.3 million in 2008. At

constant exchange rates, this corresponds to a decline in revenue by 6.7%. During the reporting pe-

riod, Network Testing generated revenue of CHF 133.3million, including the seven-month consolidation

of TEMS. Revenue for Network Testing has been heavily impacted in particular by the significantly

weaker US dollar against the Swiss franc since spring 2009. Security Communication improved revenue

in the year under review by 2.5% to CHF 138.1 million compared to CHF 134.7 million in the previous

year. In the Swiss business, revenue remained on a par with the prior year, while revenue from inter-

national business was higher.

REPORT OF THE CHAIRMAN AND THE CEO

3ASCOM ANNUAL REPORT 2009 REPORT OF THE CHAIRMAN AND THE CEO

At CHF 514.4 million, incoming orders for the Ascom Group were 0.5% higher year-on-year, or

5.7% higher at constant exchange rates. Towards year-end, all three divisions reported renewed

customer interest in investment.

Significant increase in Group profit

The Group’s consistent focus since autumn 2007 is clearly bearing fruit. Ascom recorded Group

profit of CHF 24.4 million in 2009, compared to CHF 8.2 million in the previous year, with all three divi-

sions – Wireless Solutions, Security Communication and the newly formed Network Testing Division

–making a positive contribution to profit over the full year. In keepingwith our aim of further strength-

ening the company, we intend to invest the proceeds in the company’s development. The Board of

Directors will therefore propose to the Annual General Meeting that no dividend be paid.

Solid profitability

All three divisions were profitable in financial year 2009. Consolidated EBITDA amounted to

CHF 49.8 million, with a remarkable EBITDA margin of 9.3%. At EBIT level, a result of CHF 32.8 million

was achieved with an EBIT margin of 6.1%.

Given the economic environment, Wireless Solutions posted very solid results, achieving EBITDA

of CHF 30.0 million and an EBITDA margin of 11.3%. EBIT amounted to CHF 23.2 million, with an EBIT

margin of 8.7%. To mitigate the effects of the economic crises, capacity adjustments were made early

and had a positive impact onWireless Solutions’ earnings already in the second half of 2009. Excluding

the one-time restructuring costs of CHF 3.8 million incurred during the year under review, Wireless

Solutions ended the year with an encouraging EBIT margin of 10.2%.

Ascom key figures

CHFm 2009 2008

Incoming orders 514.4 511.9

Revenue 537.2 509.2

EBIT 32.8 44.0

EBITDA 49.8 53.3

Group profit 24.4 8.2

Number of employees (FTE) as of 31.12. 2,162 1,864

4 ASCOM ANNUAL REPORT 2009 REPORT OF THE CHAIRMAN AND THE CEO

Including TEMS over its seven-month consolidation period, the newly formed Network Testing

Division closed 2009 with EBIT of CHF 9.3 million and an EBIT margin of 7.0%. At EBITDA level, the

division achieved a result of CHF 18.1 million, with an EBITDA margin of 13.6%. Excluding integration

costs of CHF 4.5 million related to acquisitions, and disregarding the additional amortization of

CHF 7.9 million for intangible assets from acquisitions, the EBIT margin came to 16,3%, which is

slightly above the expected range defined in March 2009. TEMS succeeded in achieving its targeted

profitability and has generated EBIT above 20% (excluding integration and amortization costs) since

its consolidation on 2 June 2009.

In the year under review Security Communication posted EBITDA of CHF 4.8 million, correspond-

ing to amargin of 3.5%. The result reflects the costs related to the internationalization strategy, which

could only be partly offset through cost savings. At EBIT level the division posted a result of

CHF 3.4 million with an EBIT margin of 2.5%.

Solid balance sheet structure

Ascom is a financially sound technology group. With cash and cash equivalents of

CHF 127.7 million and an equity ratio of 29.4% at 31 December 2009, the company is well equipped

to pursue further development.

Three divisions now geared towards Mission-Critical Communication

In 2009, with the successful acquisition of TEMS we have achieved a remarkable step in our com-

pany’s development, which – coupled with the earlier acquisitions of Comarco WTS and Argogroup –

actively helped to consolidate this nichemarket and thus created a world market leader in the “mobile

network testing” business area. Ascom comprises three divisions under the umbrella of Mission-

Critical Communication: Wireless Solutions, Network Testing and Security Communication. All three

divisions are active in the business-to-business field. Communication is business-critical for our

customers, and calls for first-class products, solutions and services.

The newly formed Network Testing Division covers TEMS and the existing Telecom Solutions

Business Unit, which was part of the former Security Solutions Division. The remaining part of Secu-

rity Solutions has been operating as a separate division under the name Security Communication and

covers the defense, public safety and infrastructure operator’s business areas.

5ASCOM ANNUAL REPORT 2009 REPORT OF THE CHAIRMAN AND THE CEO

Number of employees increased by 16.0%

The number of employees (FTE) increased in 2009 by 16.0% from 1,864 to 2,162. At the same time

Ascom gained in internationality. The percentage of employees outside Switzerland increased from

73.2% to 77.2%.

Substantial investments in Research and Development

Despite a difficult economic environment, we did substantial investments in R&D also in 2009.

The expenses for R&D rose from CHF 32.9 million to CHF 47.0 million and achieved a portion of revenue

of 8.7% (previous year: 6.5%). Due to these investments in the company’s innovation capabilities the

product portfolio could be extended and the competitiveness improved.

Consistent ongoing implementation of clearly focused corporate strategy

Our three divisions reflect our stronger focus on the niche strategy of Mission-Critical Communi-

cation, with the emphasis in all areas on business-to-business activities. A customer-oriented approach

is critical to our success; we are committed to meeting our obligations towards our customers in a

professional and targeted manner.

The market strategy of Wireless Solutions will be consistently pursued with a view to gaining

market share across all three sales channels (direct, indirect via local value added resellers, and via

OEM partners). Network Testing will be integrated according to plan and here, too, the aim is to further

expand our market position thanks to a comprehensive product portfolio. At Security Communication

we intend to drive forward the internationalization strategy in order to increase international revenue.

Special attention will be paid to enhancing profitability.

We are committed to ongoing investment in the company’s innovation capabilities and

talent management, and to making targeted value-adding acquisitions. In markets in which Ascom

is active, we aim to gain market share while at the same time increasing profitability further.

Sustainability

As an internationally operating groupwe abide by the principles of sustainable businessmanage-

ment, which gives equal consideration to environmental aspects, the needs of the community, and

economic objectives. Our mission is to deliver offerings, which are environmentally friendly, safe and

reliable. Sustainable resource management is therefore on our list of priorities. The deployment of

Ascom products at the International Climate Conference in Copenhagen in December 2009was a result

of our ecological efforts.

Ascom stands for innovative solutions. And because innovations are developed by people, we

aim to attract talented staff and further develop their skill sets. With this in mind, we successfully

launched a Talent Development Program in 2009.

6

Outlook

Although signs of a recovery were apparent towards the end of 2009, market conditions are

expected to improve rather slowly in 2010. With its business activities, Ascom is well positioned to

capitalize on emerging business opportunities in its markets. Our goal is to end 2010 with further

growth in revenue and increase in the EBITDA margin, provided the economic environment at least

remains stable.

Thanks

The success of our company and the implementation of our strategy are dependent on the

dedication and skills of our employees. We thank them for their strong commitment. We also owe our

customers a vote of thanks for their loyalty to our company and their trust in our products and ser-

vices. It is a pleasure for us to offer them compelling solutions. Our thanks also go to you, our valued

shareholders, for the confidence you have shown in us and Ascom.

We are convinced that, by continuing to implement our niche strategy in a coherent manner, we

can generate profitable growth and, in so doing, sustainably enhance Ascom’s value. We at Ascomwill

do our utmost to achieve this goal.

Juhani Anttila Riet Cadonau

Chairman CEO

ASCOM ANNUAL REPORT 2009 REPORT OF THE CHAIRMAN AND THE CEO

7ASCOM ANNUAL REPORT 2009

We are a responsiblepartner.

8 ASCOM ANNUAL REPORT 2009 WIRELESS SOLUTIONS

Business results 2009

As an internationally active solution provider, Wire-

less Solutions was unable to avoid the effects of the

global economic crisis in 2009. Despite the difficult environ-

ment, the division posted very sound results, recording

a profit of CHF 23.2 million at EBIT level, corresponding

to a remarkable EBIT margin of 8.7%. Excluding the

restructuring costs, EBIT margin would have been 10.2%.

The result at EBITDA level, with a margin of 11.3%,

amounted to CHF 30.0 million.

Since Wireless Solutions earned the major portion of

its revenue in Europe, the result was also adversely af-

fected by the weakening of the Euro and the Swedish

krona against the Swiss franc. In the year under review,

Wireless Solutions generated revenues of CHF 265.2million,

compared with CHF 308.3 million in 2008. Adjusted for cur-

rency translation effects (i.e. at prior-year rates), revenue

fell by only 6.7%.

Ascom Wireless Solutions posted very solid results

in the 2009 financial year, despite a generally difficult

economic climate.

The division offers modern wireless on-site com-

munication solutions in the field of enterprise mobility.

The systems, solutions and services provided by Wireless

Solutions support the optimization of customers’ business

processes in the following market segments: hospitals,

elderly care, industry, retail, hotels, secure establishments

(such as prisons) and psychiatric clinics. The division’s

product portfolio concentrates primarily on four applica-

tion areas: voice/telephony, professional messaging

(transmission of critical data), alarm and localization. Best-

fit technology is used to deliver industry specific solutions

tailored to individual customer needs; the Ascom applica-

tions are integrated in the customer’s existing business

systems irrespective of which technology platform the

customer prefers.

Ascom Wireless Solutions is the leading specialistin wireless on-site communication solutions

WIRELESS SOLUTIONS

9ASCOM ANNUAL REPORT 2009 WIRELESS SOLUTIONS

Strategic priorities and market trends

Wireless Solutions intends to continue pursuing its

chosen strategy and aims to further consolidate and ex-

pand its international presence in all three sales channels

(direct, indirect and OEM).

With a comprehensive range of products and solu-

tions for voice, messaging, alarming and localization, the

division has succeeded in acquiring customers in new

market segments such as secure establishments and psy-

chiatric clinics.

IP-based communication platforms continue to grow

in popularity. With this in mind, the division is consis-

tently investing in new developments with a view to ex-

panding its product portfolio. At presentWireless Solutions

is concentrating on the introduction of a new, robust, high-

quality DECT model, on expanding the functionalities of

IP-DECT systems, and on the rollout of the next-generation

VoWiFi handsets scheduled for the second quarter of

2010.

Despite the challenging nature of market activities

across all three sales channels in the 2009 financial year,

Wireless Solutions achieved a satisfactory order intake of

CHF 275.3 million. Both the direct sales as well as the indi-

rect sales via international partners and the OEM business

were affected by the recession. While the hospital and

elderly care market segment in Europe remained stable,

US customers’ reluctance, also in the healthcare industry,

resulted in fewer orders. The industry segment also felt the

impact of the economic downturn. On the other hand, busi-

ness in the security segment performed very well, with the

division gaining significant market share in the segment

for secure establishments. On another positive note, to-

wards the end of 2009 first signs of a general recovery

were observed in the USA and among OEM partners. More-

over, various projects were taken up again, which had been

postponed by customers.

Wireless Solutions responded early to the changed

economic conditions and adjusted its capacity specifically.

Functional costs were reduced by CHF 11.3million (or 10.5%)

compared with last year, which had a positive impact on

the division’s operating result in the second half of the

year. Wireless Solutions could maintain its investment

level into R&D at constant exchange rates. Excluding

restructuring costs of CHF 3.8 million, the EBIT margin for

2009 would have been 10.2%.

Revenue by segmentRevenue by region

Key figures Wireless Solutions

CHFm 2009 2008


Revenue 265.2 308.3

EBIT 23.2 36.0

EBITDA 30.0 43.3

Number of employees (FTE) 1,155 1,225

■ Switzerland 7%

■ Europe excl. Switzerland 72%

Belgium 3%

France 12%

Germany 5%

Netherlands 28%

Scandinavia 16%

UK 7%

Other European countries 1%

■ USA/Canada 7%

■ RoW 4%

■ OEM 10%

■ Hospitals 29%

■ Elderly care 21%

■ Industry 16%

■ Secure establishments 5%

■ Hotel and Retail 5%

■ Other 13%

■ OEM 10%

10 ASCOM ANNUAL REPORT 2009 WIRELESS SOLUTIONS

Targeted staff development

With their skills and dedication, employees generate

added value for customers. The division fosters the devel-

opment of its employees through targeted education and

training. It is essential to attract talents on the job market

and to keep them. A key success factor when hiring new

employees is a structured recruitment process with clearly

defined job and qualification profiles, a multi-level inter-

view process and a systematic program of induction. The

education and training schemes operated by Wireless

Solutions are clearly aligned to market and customer

requirements. The main focus is on specialist areas such

as practical sales training or project management courses,

and the systematic development of management.

Outlook

Thanks to an excellent product portfolio, a solid

market position and an efficient organizational structure,

Wireless Solutions is well positioned for the 2010 financial

year.

Sustainable business management

Outstanding environmental performance and long

life time are key criteria applied by Wireless Solutions in

the development and production of its on-site communica-

tion products and solutions. The division operates a fully-

integratedmanagement system that covers environmental

management (ISO 14001 certified since 2008), quality

management (ISO 9001 certified) and the internal controls

system. Processes are regularly reviewed and optimized,

and the management systems are continually adjusted in

keeping with international standards. All products, solu-

tions and processes comply with the prevailing regulations

and standards.

In terms of environmental management, the division

has defined two main goals: First, it wants to minimize

energy consumption of its products. Not least because of

their low energy consumption, Ascom products were used

at the international Climate Conference in Copenhagen in

December 2009. Second, the division is committed to using

as few non-renewable resources as possible.

11ASCOM ANNUAL REPORT 2009

Customer satisfactionis our ambition.

12 ASCOM ANNUAL REPORT 2009 NETWORK TESTING

NETWORK TESTING


Network Testing comprises the TEMS and the Telecom

Solutions business unit of the former Security Solutions

Division. TEMS has been part of the Ascom Group since the

successful acquisition on 2 June 2009. Integration has been

proceeding rapidly and according to plan. Despite a tough

market environment, Network Testing reported EBIT of

CHF 9.3 million and an EBIT margin of 7.0%, for the period

under review, including a seven month consolidation for

TEMS. Without integration and amortization cost, EBIT

margin was at 16.3%. Revenue has been heavily impacted

in particular by theweaker US dollar against the Swiss franc

since spring 2009. Nevertheless, the EBIT margin could

be maintained because of a strict cost management. On

EBITDA level the division achieved a result of CHF 18.1 mil-

lion and an EBITDA margin of 13.6%.

Network Testing generated revenue of CHF 133.3 mil-

lion. This result has been heavily affected by the weakness

of the main currencies against the Swiss franc.

Network Testing reported incoming orders of

CHF 130.5million driven primarily by strong demand in Asia

and North America. Many of the customers in Europe and

in Central and Latin America delayed investments, and

several infrastructure projects were postponed. In addition,

the division experienced increased price competition in

South East Asia. However, some rebound in business

toward the end of the year across most of the regions

was seen.

Ascom Network Testing achieved very solid results

in 2009, despite the tough market environment.1

Ascom Network Testing is a global market leader in

testing and optimization solutions for mobile networks.

Customers of Network Testing include network operators,

infrastructure vendors, and professional service providers

in the field of mobile networks. The portfolio includes solu-

tions in the areas of Test &Measurement (for troubleshoot-

ing and optimizing mobile networks), Benchmarking &

Monitoring (for maintaining quality of service during net-

work operation), and Reporting & Analysis (for post-pro-

cessing and optimization) as well as Planning & Design (for

new and evolving mobile networks). The Network Testing

portfolio provides a full range of industry-leading solutions

that help operators and other customers to optimally run

their networks. The division has its focus onmulti-technol-

ogy, multi-vendor solutions that test from the end-user’s

perspective, so that the customers can know exactly what

consumers are experiencing.

Network Testing is a global market leaderfor benchmarking and optimization of mobile networks

1 The newly formed Network Testing Division includes the business unitsTEMS and Telecom Solutions (former business unit of the Security SolutionsDivision consisting of the units Mobile Network Testing (MTS), Systems &Solutions (S&S), Telco Net Services (TNS)). TEMS has been consolidatedwithin Ascom Group since 2 June 2009.

13ASCOM ANNUAL REPORT 2009 NETWORK TESTING


■ Switzerland 7%


Benelux & France 1%

Germany 16%

Scandinavia 2%

UK & Ireland 3%

Iberia 2%

Other European Countries 11%

■ North America 24%

■ Central & South America 4%

■ Middle East & Africa 10%

■ Asia Pacific 21%

■ Test & Measurement 38%

■ Benchmark & Monitoring 32%

■ Analysis & Reporting 5%

■ Planning & Design 3%

■ Systems & Solutions/TNS 22%

Strategic focus and market trends

In line with the commitment to providing best-in-

class solutions to all customers globally, Network Testing

established an own local sales and service organization

across key markets such as China, India, Malaysia, South

Africa, Brazil, Russia, North Africa, and Central America dur-

ing the second half of 2009. Just before year-end Network

Testing finalized the organizational transfers of all TEMS

employees from Ericsson, and established the legal struc-

tures in all major markets. Integration is expected to be

mostly completed by mid 2010.

Network Testing already has a very comprehensive

portfolio for wireless measurement, benchmarking, and

optimization on the market. In 2009, Network Testing con-

tinued the leadership, including expanding the offering

with LTE technology support and introducing TEMS Discov-

ery, a new product in the Reporting and Analysis segment.

The successful divestment of the scanner products, a sub-

set of ComarcoWTS acquired in the beginning of 2009, will

allow the division to increase the focus on core offerings.

During 2010, Network Testing intends to expand the sup-

port for developing technologies such as LTE and TD-LTE,

and to further adapt the offering to capture growth op-

portunities in the Asia Pacific region, in Central and Latin

America, and in the Middle East and Africa.

Outlook

2010 will be a year of further consolidation and inte-

gration for Network Testing. The division will prioritize the

efficiency improvement of processes and structures as well

as the implementation of infrastructure of this newly-

established third division in the Ascom Group, which in-

cludes assets obtained through three acquisitions (Argo-

group, Comarco WTS and TEMS) over the last two years.

and an already existing business (MTS). With these stra-

tegic steps, Ascom actively contributed to the consolida-

tion of this niche market. As a result of this merger Net-

work Testing anticipates efficiency gains that, in addition

to the position as market leader, will enable the division to

profitably grow faster than the market.

Key figures Network Testing

CHFm 2009 2008


Revenue 133.3 67.2

EBIT 9.3 3.8

EBITDA 18.1 4.2

Number of employees (FTE) 590 225

14 ASCOM ANNUAL REPORT 2009 NETWORK TESTING

Sustainable business development

Quality management is considered a priority in this

business and Network Testing is committed to taking care

of the environment. The products and solutions meet to-

day’s international standards and requirements. Network

Testing Division is managed according best-in-class prin-

ciples (EFQM model) and has established a multi-year

auditing program for ISO 9001/14001 which covers all its

legal entities worldwide. The overall global certification for

the Network Testing Division is expected during the year

2010.

Talent management

Excellent education and ongoing professional training

for employees are also top priorities for Network Testing.

The educational background of the employee base is high,

with the majority holding university degrees. The division

provides international career opportunities to internal tal-

ents. As a global organization, cross cultural development

and international assignments help to think globally and

act locally. The division uses specific internal and external

education programs to further develop the professionalism

of the people. The competence, personality, and dedication

of its employees are the foundation of Network Testing’s

global success.

ASCOM ANNUAL REPORT 2009 15

We prove our talentthrough innovativesolutions and products.

16

SECURITY COMMUNICATION

ASCOM ANNUAL REPORT 2009 SECURITY COMMUNICATION

In the year under review the division recorded reve-

nues totaling CHF 138.1 million, versus CHF 134.7 million in

2008. Higher revenue was generated from international

customers, while Swiss business recorded solid results and

revenue was on a par with the prior year. The costs related

to the internationalization strategy could only be partly

offset through strict cost management.

In general themarket stagnated in 2009 as customers

showed themselves reluctant to invest due to the eco-

nomic situation. The incoming orders for 2009 amounted

to CHF 108.2 million, compared with CHF 129.3 million in

2008. However, since no largemilitary projects were placed

in the division’s markets, it proved impossible to repeat the

previous year’s high level of incoming orders. Nevertheless,

Security Communication was awarded to remarkable

orders in the Swiss business, both for military and civil

applications. In its international business, the division

concluded contracts to upgrade existing communication

infrastructures in Germany and the Czech Republic, and

a contract was signed in Norway to upgrade the alarm

system platform with IP technology. Security Communi-

cation started well in the new financial year with the an-

nouncement, at the beginning of 2010, of an important

contract for Israel Railways.

Ascom Security Communication1 closed the difficult

economic financial year 2009 with positive results.

Security Communication is a recognized provider of

reliable, secure communication solutions for alarm systems,

mobilization and tactical communications. In performance

of their duties, demanding customers such as police forces,

fire departments, city councils, rescue services and armies

place their trust in secure communication technologies and

systems.

The division is represented by its own subsidiaries

in Switzerland, Austria, Finland, the Czech Republic and

Poland. Security Communication also operates in other

countries through partner companies.


With a profit of CHF 3.4 million at EBIT level, cor-

responding to an EBIT margin of 2.5%, Security Communi-

cation showed positive results despite the difficult eco-

nomic climate in 2009. Security Communication achieved

an EBITDA of CHF 4.8 million and an EBITDA margin of

3.5%.

Security Communication is a recognized providerof reliable, secure communication solutions

1 The Security Communication and Telecom Solutions business units werecombined in the Security Solutions Division in the past. Security Commu-nication is now operating as a separate division with the business areasDefense, Public Safety and Infrastructure Operators. Telecom Solutions andTEMS have been part of the newly formed Network Testing Division.

17

Strategic priorities and market trends

Security Communication concentrates on the busi-

ness areas of Defense, Public Safety and Infrastructure

Operators, and has been operating as a separate division.

The division is pursuing consistently its declared inter-

nationalization strategy and plans to step up market de-

velopment activities via its own subsidiaries and, with

emphasis, via partners and value added resellers. Security

Communication will also continue to invest in its product

portfolio, consistently expand product platforms and ad-

just them to customers’ varying country-specific require-

ments.

Outlook

Security Communication is well positioned to capi-

talize on emerging business opportunities in its markets.

The division is pursuing growth primarily through further

internationalization in all three market segments. The

geographical focus of Security Communication is on Europe.

Strict cost management continues to be accorded top

priority, to support an increase in margins.

Sustainable business management and targeted

staff development

Already over 20 years ago, Security Communication

introduced a professional quality management system,

which has been ISO 9001 certified since 2000. The division’s

environmental management system has been ISO 14001

certified since 2004. Regular reviews of the full range of

processes ensure that the related activities are optimized

and that management systems remain compliant with the

applicable international standards. This allows Security

Communication to ensure that high quality standards are

adhered to and that natural resources are sustainably

managed.

For Security Communication, the qualifications and

skills of its employees are a key to success. An excellent

educational background is therefore as important as

targeted training and development. In Switzerland the

division collaborates with universities and universities

of applied sciences to recruit highly-qualified personnel.

Targeted further training schemes enable Security Com-

munication to systematically develop the professional and

personal skills of its employees. A special management

program is operated to foster and develop future leaders.

For many years Security Communication has also accorded

major importance to training young apprentices. It runs its

own vocational training center in Bern where young people

are offered the opportunity to study primarily for a tech-

nical, but also for a commercial profession. The number of

apprentices currently undergoing training in Switzerland

is 39; an above-average percentage of the workforce.

ASCOM ANNUAL REPORT 2009 SECURITY COMMUNICATION


Key figures Security Communication

CHFm 2009 2008


Revenue 138.1 134.7

EBIT 3.4 6.0

EBITDA 4.8 7.5

Number of employees (FTE) 399 398

■ Switzerland 78%


Austria 10%

Germany 2%

Scandinavia 5%

Other European countries 5%

■ Defense 47%

■ Public Safety 23%

■ Infrastructure Operators 11 %

■ Facility Management/ 19 %

Real Estate

18 ASCOM ANNUAL REPORT 2009 CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

Listed corporation: Ascom Holding Ltd.

AscomHolding Ltd. (AscomHolding SA, AscomHolding AG)

is a joint-stock company headquartered in Berne, Switzer-

land. It has a share capital of CHF 18,000,000, divided into

36,000,000 registered shares with a par value of CHF 0.50

per share.

The company’s registered shares are traded on the SIX

Swiss ExchangeMain Standard under Securities No. 1133920,

symbol ascn.

Ticker symbols:

Bloomberg: ASCN SW■

Reuters: ASCN.S■

Market capitalization as of 31 December 2009 was

CHF 351 million.

Unlisted Group companies

The following companies belong to the AscomHolding

Ltd. scope of consolidation (see table on page 19).

1. CORPORATE STRUCTURE AND SHAREHOLDERS

Operating corporate structure (as of 1 January 2010)

Board of Directors

CEORiet Cadonau*

CFO/Investor RelationsMartin Zwyssig*

Wireless Solutions& Deputy CEOFritz Mumenthaler*

Security CommunicationFritz Gantert*

General Counsel Patrick GrawehrGeneral Secretary/Comm. Daniel LackHuman Resources Kurt Renggli

* Member of the Executive Board

Network TestingRikard Lundqvist*

19ASCOM ANNUAL REPORT 2009 CORPORATE GOVERNANCE

Country Company Location Capital Investment

Austria Ascom Austria GmbH Vienna EUR 3,635,000 Ascom Holding Ltd.: 100%

Belgium Ascom (Belgium) NV Brussels EUR 1,424,000 Ascom Holding Ltd.: 100 %

China Ascom (Beijing) Network TestingService Co., Ltd.

Beijing CNY 2,550,000 Ascom (Sweden) Holding AB: 100%

Czech Republic Ascom (CZ) s.r.o. Prague CZK 200,000 Ascom (Switzerland) Ltd.: 100%

Denmark Ascom Danmark A/S Silkeborg DKK 1,200,000 Ascom Holding Ltd.: 100%

Finland Ascom (Finland) Oy Vantaa EUR 562,000 Ascom Holding Ltd.: 100%

France Ascom Holding SA Guilherand-Granges EUR 80,000 Ascom Holding Ltd.: 100%

Ascom (France) SA Nanterre EUR 2,000,000 Ascom (Sweden) AB: 100%

Germany Ascom Deutschland GmbH Frankfurt a.M. EUR 2,137,000 Ascom Unternehmensholding GmbH: 100%

Technologiepark Teningen GmbH Teningen EUR 6,136,000 Ascom Unternehmensholding GmbH:94%, Ascom (Switzerland) Ltd.: 6%

Ascom Unternehmensholding GmbH Frankfurt a.M. EUR 5,113,000 Ascom Holding Ltd.: 100%

Ascom Network Testing GmbH Eningen EUR 25,000 Ascom Unternehmensholding GmbH: 100%

Hong Kong Ascom Hong Kong Ltd. Hong Kong HKD 1,500,000 Ascom Holding Ltd.: 100%

India Ascom Network Testing Pvt. Ltd. Mumbai INR 1,000,000 Ascom (Sweden) Holding AB: 100%

Malaysia Ascom Network Testing Sdn Bhd Subang MYR 500,000 Ascom (Sweden) Holding AB: 100%

Netherlands Ascom (Nederland) BV Utrecht EUR 1,361,000 Ascom (Sweden) AB: 100%

Ascom Finance BV Arnhem EUR 45,000 Ascom Holding Ltd.: 100%

Mocsa Real Estate BV Utrecht EUR 454,000 Ascom (Nederland) BV: 100%

Ascom Tateco BV Hoofddorp EUR 18,000 Ascom (Nederland) BV: 100%

Norway Ascom (Norway) A/S Oslo NOK 1,250,000 Ascom (Sweden) AB: 100%

Poland Ascom Poland Sp. z o.o. Warsaw PLN 2,405,200 Ascom Holding Ltd.: 100%

Sweden Ascom (Sweden) AB Gothenburg SEK 96,154,000 Ascom Holding Ltd.: 66.4%,Ascom UK Group Ltd.: 33.6%

Ascom (Sweden) Holding AB Gothenburg SEK 70,000,000 Ascom Holding Ltd.: 100%

Ascom Network Testing AB Skelleftea SEK 100,000 Ascom (Sweden) Holding AB: 100%

Switzerland Ascom (Switzerland) Ltd. Berne CHF 28,000,000 Ascom Holding Ltd.: 100%

Ascom Network Testing Ltd. Solothurn CHF 200,000 Ascom Holding Ltd.: 100%

UK Ascom Croydon Ltd. Croydon GBP 600,000 Ascom UK Group Ltd.: 100%

Ascom Network Testing Ltd. Elstead GBP 2 Ascom UK Group Ltd.: 100%

Ascom (UK) Ltd. Sevenoaks GBP 50,000 Ascom (Sweden) AB: 100 %

Ascom UK Group Ltd. Croydon GBP 5,000,000 Ascom Holding Ltd.: 100%

USA Ascom Holding Inc. Rockaway NJ USD 10 Ascom Holding Ltd.: 100%

Ascom (US) Inc. Morrisville NC USD 10 Ascom (Sweden) AB: 100%

Ascom Network Testing Inc. Lake Forest USD 1 Ascom Holding Ltd.: 100%


Shareholders

Registered shareholders

As of 31 December 2009, therewere 6,436 shareholders

registered in the share register of Ascom Holding Ltd. Share

ownership as of 31 December 2009:

Number of shares Number of shareholders

1 to 100 1,441

101 to 1,000 3,613

1,001 to 5,000 1,115

5,001 to 10,000 112

More than 10,000 155

Total 6,436

Changes subject to disclosure requirements during

the 2009 financial year

In an announcement dated 19 October 2009, published

in compliancewithArt. 20 of the Stock ExchangeAct (SESTA),

Vontobel Fonds Services AG, Zurich, disclosed that it held

Ascom securities accounting for 3.01% of the voting rights

(SIX notice dated 20 October 2009).

In an announcement dated 6 November 2009, pub-

lished in compliance with Art. 20 of the Stock Exchange Act

(SESTA), Vontobel Fond Services AG, Zurich, disclosed that

its share of Ascom voting rights was now below 3% (SIX

notice dated 6 November 2009).

Significant shareholders

The following significant shareholder as defined by

Art. 663c of the Swiss Code of Obligations, holding more

than 5% of the share capital and voting rights, was record-

ed in the share register at 31 December 2009:

Zürcher Kantonalbank: 26.74%

This does not cover shares which are not registered in

the share register (dispo shares). Dispo shares amounted

to 27.2% as of 31 December 2009.

In accordance with the disclosure announcements

made, the following parties are regarded as significant

shareholders in Ascom:

Zürcher Kantonalbank, Zurich: Ascom securities repre-■

senting 25.89% of voting rights as well as sale positions

with voting rights conferred of 2.57% (announcement

dated 7 December 2007).

Bank Julius Baer & Co. Ltd., Zurich: Ascom securities rep-■

resenting 3.74% of voting rights as well as sale positions

with voting rights conferred of 4.99% (announcement

dated 20 February 2008).

The company held 1,283,933 treasury shares as of

31 December 2009.

There are no known shareholders’ agreements.

Cross-shareholdings

The Ascom Group has not entered into cross-share-

holdings with other companies in terms of capital or voting

rights.


Share structure

31.12.09 31.12.08

Number CHFm Number CHFm

Registered sharespar value CHF 0.50

36,000,000 18 36,000,000 18

Registeredshareholders

6,436 6,832

Ascom Holding Ltd. and its subsidiaries held 1,283,933

treasury shares as of the balance sheet date.

Bonus certificates

Ascom Holding Ltd. has not issued any bonus certifi-

cates.

Authorized share capital/Conditional share capital

The Annual General Meeting of Ascom Holding Ltd.

held on 15 April 2009 approved the creation of authorized

capital. The Board of Directors is authorized at any time up

to 15 April 2011, to increase the company’s share capital by

no more than CHF 3,600,000, by issuing up to 7,200,000

registered shares with a par value of CHF 0.50 per share, to

be fully paid up.

Increases by firm underwriting as well as partial in-

creases are permissible. Registered shares are subject to the

restriction on registration set out in Article 4, Section 4 of

the Articles of Incorporation.

New registered shares are issued subject to conditions

to be laid down by the Board Directors. The issue price, type

of contribution, conditions governing the exercising of sub-

scription rights and the date of dividend entitlement shall

be determined by the Board of Directors.

2. CAPITAL STRUCTURE

Ordinary share capital

Since 6 April 2006, the share capital has amounted to

CHF 18,000,000, divided into 36,000,000 registered shares

with a par value of CHF 0.50 per share.

At the Annual General Meeting held on 6 April

2006, the company’s share capital was reduced from

CHF 198,000,000 to CHF 18,000,000 (par value reduced to

CHF 0.50). Par value of CHF 5 per registered sharewas repaid

on 28 June 2006.

At the Extraordinary General Meeting held on 4 De-

cember 2003, the share capital was initially reduced in

two stages from CHF 225,000,000 to CHF 123,750,000 (par

value reduced to CHF 5.50) and subsequently increased by

CHF 74,250,000 to CHF 198,000,000 through the issue of

13,500,000 new shares with a par value of CHF 5.50 per

share. In a resolution passed on 22 December 2003, the

Board of Directors noted that the capital increase had been

implemented.

The share capital is fully paid up. The participation

capital in the amount of CHF 38,875,000 in existence at the

time was dissolved on the occasion of the General Meeting

held on 11 June 1991.

In 2000, uniform registered shares with a par value of

CHF 10 were introduced by splitting the existing registered

shares with a par value of CHF 100 and bearer shares with

a par value of CHF 500. Each share carries one vote and all

shares carry the same claim to dividend payments.


At the Annual General Meeting held on 6 April

2006, the company’s share capital was reduced from

CHF 198,000,000 to CHF 18,000,000 (par value reduced to

CHF 0.50). Par value of CHF 5 per registered sharewas repaid

on 28 June 2006.

Limitations on transferability and nominee

registrations

In principle, the Articles of Incorporation of AscomHolding■

Ltd. contain no limitations on transferability.

The share registration guidelines are published on the■

company’s website (http://www.ascom.com/en/share-

registration-guidelines.pdf).

Every person recorded in the share register is regarded as■

a shareholder or beneficiary vis-à-vis the company.

A share register is maintained for registered shares in■

which the names and addresses of the owners and ben-

eficiaries are entered. Changes must be reported to the

company.

Entry in the share register requires proof of acquisition of■

title to the shares or of beneficiary status.

A purchaser of registered shares is entered in the share■

register upon request as a voting shareholder if he/she

expressly declares that he/she acquired the registered

shares in his/her own name and on his/her own account.

If the purchaser is not prepared to make such a declara-

tion, the Board of Directors may refuse registration as a

voting shareholder.

After consulting the party involved, the company may■

delete entries in the share register if such entries occurred

in consequence of false statements by the purchaser. The

purchaser must be informed immediately of the dele-

tion.

Admission of nominees is decided by the Board of Direc-■

tors. No applications in this regard were submitted in

2009.

The new registered shares are intended for placement

with existing shareholders. However, the Board of Directors

is authorized to exclude the preferential subscription rights

of shareholders in favor of third parties if the new shares

are used for the acquisition of companies, segments of com-

panies or participations, or in the event of share placement

with a view to financing such transactions and corporate

investment projects. Preferential subscription rights may

also be excluded if shares are issued to acquire partici-

pations in strategic partners or in the case of employee

share ownership programs. Shares for which subscription

rights have been granted but not exercised remain at the

disposal of the Board of Directors, which uses them in the

interests of the company.

The subscription and acquisition of the new registered

shares, as well as any subsequent transfer of such shares,

shall moreover be governed by the company’s Articles of

Incorporation.

The company has no conditional share capital.

Changes in equity

The equity of Ascom Holding Ltd. has changed as

follows:

in CHF 2009 2008 2007 2006

Share capital 18,000,000 18,000,000 18,000,000 18,000,000

Statutoryreserves

19,297,000 18,552,000 12,501,000 9,820,000

Free reserves 83,854,000 78,651,000 88,114,000 105,293,000

Total 121,151,000 115,203,000 118,615,000 133,113,000

Since 6 April 2006, the share capital has amounted to

CHF 18,000,000, divided into 36,000,000 registered shares

with a par value of CHF 0.50 per share.


Options/convertible bonds

Options

Ascom stock option plans are listed in the Remuner-

ation Report on pages 37 to 41.

Convertible bonds

Ascom Holding Ltd. has not issued any convertible

bonds.

Management transactions

The listing rules of the SIX Swiss Exchange stipulate

a disclosure obligation in respect of management trans-

actions. To ensure compliance with these provisions, the

Board of Directors has issued an Annex to the Organiza-

tional Regulations. Members of the Board of Directors and

the Executive Board as well as the General Secretary are

required to make a disclosure to the company. In 2009,

three individual disclosures (see table) were submitted

as well as nine collective reports. Therefore, it cannot be

concluded from the individual disclosures only, how many

shares and derivatives are being held by the Board of Direc-

tors and the Executive Board.

Transaction

date

Number

of shares

Type of transaction Amount

in CHF

14.5.2009 10,000 Disposal 112,139

11.6.2009 10,000 Disposal 121,000

1.7.2009 10,000 Disposal 134,000


Composition of the Board of Directors

of Ascom Holding Ltd.

In accordance with the Articles of Incorporation, the

Board of Directors of Ascom Holding Ltd. consists of one or

morememberswho are elected for a one-year term of office

(amendment to the Articles approved by the 2006 Annual

General Meeting).

Since the Annual General Meeting of Ascom Holding

Ltd. held on 15 April 2009, the Board of Directors has con-

sisted of the following members as listed below.

Member since

AGM in

Elected until

AGM in

Juhani Anttila, Chairman 2001 2010

Paul E. Otth, Vice-Chairman 2002 2010

Dr Wolfgang Kalsbach 2002 2010

Dr J.T. Bergqvist 2005 2010

Kenth-Ake Jönsson 2009 2010

Secretary to the Board of Directors: Dr Daniel Lack (since 16 May, 2001)

All members of the Board of Directors are non-execu-

tive members.

Changes to the Board of Directors

Dr Axel Paeger decided not to stand for re-election and

stepped down from the Board of Directors at the 2009

Annual General Meeting. Kenth-Ake Jönssonwas elected to

the Board of Directors.

3. BOARD OF DIRECTORS

Board of Directors of Ascom Holding Ltd.

The Board of Directors holds ultimate decision-making

authority and determines the strategic, organizational and

financial planning guidelines for the Group as well as the

company objectives. The Board of Directors is responsible

for the overall direction as well as the supervision and

control of the management. It sets guidelines for business

policies and ensures that it is regularly informed on the

course of business.

The primary tasks of the Board of Directors under the

Swiss Code of Obligations and the Articles of Incorporation

of Ascom Holding Ltd. are:

Overall management of the company and the Group, in-■

cluding setting the strategic direction as well as issuing

directives as required

Defining the organization and management structure■

Laying out the forms of accounting and financial control■

as well as financial planning

Appointing and discharging persons entrusted with the■

management and representation of the company and

determining who is entitled to sign on behalf of the com-

pany

Ultimate supervision of business activities■

Drawing up the Annual Report as well as preparing the■

Annual General Meeting and carrying out its resolutions

Informing the courts in the event of excessive indebted-■

ness

Passing resolutions on the financing of business, and in■

particular deciding on capital increases and IPOs and the

consequent changes to the Articles of Incorporation

Passing resolutions on participations of major/strategic■

significance

Determining the compensation for Members of the Board■

of Directors and the Executive Board


Other mandates of members of the Board of Directors

Juhani Anttila also acted as CEO of the Ascom Group

concurrently from 1 January 2003 to 31 May 2004. None of

the other members of the Board of Directors previously

worked for the Ascom Group, nor does any member of the

Board of Directors perform any permanentmanagement or

consultancy functions for important Swiss or foreign inter-

est groups or hold any official positions or political offices.

Juhani Anttila is a member of the Board of Directors

of Actelion Ltd., Allschwil. Paul E. Otth is a member of the

Board of Directors of Inficon Holding AG, Bad Ragaz (Vice-

Chairman) as well as of Swissquote Group Holding AG,

Gland. Dr J.T. Bergqvist is Chairman of the Board of Norves-

tia OYJ, Helsinki (Finland). Kenth-Ake Jönsson is Chairman

of the Board of PV Enterprise Sweden AB, Vilshult (Sweden),

and a member of the Board of Directors of Generic Sweden

AB, Nacka (Sweden). The other Boardmembers do not hold

positions on the boards of any other exchange-listed com-

panies.

Juhani Anttila is a member of the Board of ValCrea AG

in Zug (Chairman) and a member of the Board of Directors

of ArgYou AG in Baar. Paul E. Otth is Chairman of the Board

of Directors of EAO Holding AG, Olten. Kenth-Ake Jönsson

is a member of the Board of Directors of Litorina Kapital

1998 AB and of Litorina Kapital 2001 AB, both in Stockholm

(Sweden), as well as Chairman of the Board of Directors of

Ravnarp Invest AB, Växjö (Sweden). The other Board mem-

bers are not involved in any activities in governing or su-

pervisory bodies of important public- or private-law Swiss

or foreign corporations, institutions or foundations.

Election and terms of office

Since the 2006 Annual General Meeting, members of the■

Board of Directors have been appointed by the Annual

General Meeting for a term of one year. Prior to this, mem-

bers of the Board of Directors served for three years. In

this context, one year is understood to be the period from

one Annual General Meeting to the next. Members may

be re-elected.

Members are elected or re-elected to the Board of Direc-■

tors individually.

Members of the Board of Directors leave the Board at the■

Annual General Meeting held in the year in which they

reach their 70th birthday.

Internal organization

The Board of Directors is self-constituting and designates■

its own Chairman and Secretary. The latter need not be a

member of the Board.

The Board of Directors is quorate when the majority of■

members are present. In the event of capital increases,

such a quorum is not required for decisions concerning

definition of the capital increase, amendments to the

Articles of Incorporation or resolutions regarding the

capital increase report.

The Board of Directors passes its resolutions by amajority■

of the votes cast. The Chairman holds the casting vote.

Resolutions may also be adopted by written consent to a■

proposal circulated by the Chairman among all members

and passed by a majority of all members of the Board of

Directors.

Minutes are kept of deliberations and resolutions, and are■

signed by the Chairman and the Secretary.

Members of the Board of Directorsmay exercise a consult-■

ingmandate for the AscomGroup alongside their activity

on the Board, subject to the unanimous consent of the

Board of Directors. There were no such consulting man-

dates as of the balance sheet date.


MEMBERS OF THE BOARD OF DIRECTORS

Juhani Anttila Chairman

Nationality: Finnish | Born 1954 | Place of residence: Baar, Switzerland

| Member since 2001 | Chairman since 14 May 2002 | Elected until AGM

in 2010

> Studied law at the University of Helsinki, Finland (1976 Bachelor’s

degree, 1978 Master’s degree) > Moved to Switzerland in 1978

> 1981 – 1985 Managing Partner at CA Corporate Advisers, Zurich

> 1985 Appointed Managing Director of Nokia GmbH, Zurich,

and responsible for various activities for the Nokia Group

> 1990 – 1995 Chairman of the Executive Board of Nokia

(Deutschland) GmbH in Pforzheim > 1996 – 2002 CEO of the Swisslog

Group > Since 14 May 2002 Chairman of the Board of Directors of

Ascom Holding Ltd. > 1 January 2003 – 31 May 2004 also CEO of

the Ascom Group > Since 2004 Managing Partner of ValCrea AG, Zug

Paul E. Otth Vice-Chairman

Nationality: Swiss | Born 1943 | Place of residence: Zurich, Switzerland

| Member since 2002 | Elected until AGM in 2010

> Certified public accountant > 1974 – 1988 Various management

functions at the Corange Group (Boehringer Mannheim) in Switzer-

land and abroad > 1988 – 1989 Partner and member of the Executive

Board of Budliger Treuhand AG > From 1989 worked for Landis & Gyr

> From 1994 CFO and member of the Group Executive Board of

Landis & Gyr > 1996 – 1998 CFO and member of the Group Executive

Board of Elektrowatt, Zurich > 1998 – 2000 CFO and member

of the Division Board of Siemens Building Technologies, Zurich

> 2000 – 2002 CFO and member of the Group Executive Board of

Unaxis Holding AG, Zurich > Since 2003 Business Consultant

Dr J.T. Bergqvist

Nationality: Finnish | Born 1957 | Place of residence: Helsinki, Finland


> 1981 Master of Science (Helsinki University of Technology)

> 1987 Doctorate in Computer Science (Helsinki University of Technol-

ogy) > 1980 – 1987 Various positions as a software specialist, project

and export manager at Nokia Group, Helsinki > 1988 Assistant

Professor at Helsinki School of Economics > 1988 Manager, Overseas

Marketing South East Asia, Nokia Cellular Systems, Kuala Lumpur

> 1990 Area Manager & Assistant Vice President Marketing South

Europe, Nokia Cellular Systems, Paris > 1993 Area General Manager,

Nokia Telecommunications, Paris > 1995 Vice President Cellular

Transmission Business, Nokia Telecommunications > 1997 Senior Vice

President Radio Access Systems, Nokia Telecommunications > 2000

Senior/Executive Vice President & General Manager Nokia Networks,

IP Mobility Networks > 2003 – 2004 Senior/Executive Vice

President & General Manager, Nokia Networks, Global Business Units

> 2001 – 2005 Member of the Strategy Panel of the Group Executive

Board, Nokia Corporation > 2002 – 2005 Member of the Group Exe-

cutive Board, Nokia Corporation


Dr Wolfgang Kalsbach

Nationality: German | Born 1954 | Place of residence: Bahlingen,

Germany | Member since 2002 | Elected until AGM in 2010

> 1983 Doctorate in Physics > 1984 – 1990 Director of Research &

Development, Picture Tube Division of ITT Industries GmbH,

Freiburg, Germany > 1990 Managing Director of Luxor AB, Sweden

(subsidiary of the Nokia Group) > 1994 Chief Operating Officer

of ITT Intermetall (member of ITT Industries GmbH, Germany)

> 1998 – 2009 CEO of Micronas Semiconductor Holding AG, Zurich

Kenth-Ake Jönsson

Nationality: Swedish | Born 1951 | Place of residence: Växjö, Sweden


> 1976 Master of Science in Industrial Economics > 1976 – 1978 Sales

Manager, Lectrostatic AB, Skara > 1978 – 1990 Sales Manager / Vice

President of Sales and Marketing / CEO Sarnefa AB, Küngsör

> 1990 – 1995 CEO Telub AB, Växjö > 1995 – 2000 Deputy CEO of

Enator AB Tietoenator OY, Stockholm > 2000 – 2002 Managing

Director of Atle IT, 3i Technology, Stockholm > 2002 – 2008 Senior

Vice President / Executive Vice President of the Group and Chairman

of a Group of Business Units Saab AB, Stockholm

From left: Kenth-Ake Jönsson, Wolfgang Kalsbach, Juhani Anttila, J.T. Bergqvist, Paul E. Otth

28

Mode of operation of the Board of Directors

As a rule, the Board of Directors meets on a monthly

basis. Additional meetings or conference calls are held as

and when necessary. Eleven meetings were held in 2009.

Board attendance was 100%. The ordinary meetings of the

Board of Directors last a full day. The CEO, CFO and other

members of the Executive Board attend meetings of the

Board of Directors as andwhen required. The Board of Direc-

tors also engages external experts to address specific

topics.

Self-evaluation of the Board of Directors

Since 2005, the Board of Directors has carried out a

self-evaluation at year-end on the basis of a standardized

process using a comprehensive questionnaire. The results

are discussed at the first meeting in the new year, and any

measures necessary for improvements are discussed and

implemented as required.

Committees of the Board of Directors

To ensure the efficient and effective organization of

its duties, the Board of Directors of Ascom Holding Ltd. has

set up the following committees whose primary role is to

prepare materials as a basis for decisions by the Board of

Directors in specialized areas. The authority to make deci-

sions lies with the Board of Directors. All members of the

Board are entitled to attend any meetings of these com-

mittees.

Audit Committee

Members:

Paul E. Otth (Chairman) and Kenth-Ake Jönsson

The Audit Committee is composed of two non-execu-

tivemembers of the Board of Directors and generallymeets

four times a year, although the Chairman may convene

meetings as often as business requires. Four Audit Commit-

tee meetings were held in 2009, all of them attended – at

least for part of the time – by the external auditors. The

Chairman of the Board of Directors also attended all these

meetings.

The CFO attends themeetings of the Audit Committee

on a regular basis. The CEO and other members of manage-

ment are present as andwhen required. Representatives of

Internal Audit are also involved. The Secretary to the Board

of Directors prepares meetings and records minutes. The

full Board of Directors is kept informed on a regular basis

of the Audit Committee’s activities and also receives a copy

of the minutes.

The Audit Committee’s main activities are:

Evaluating processes in the company’s risk and control■

environment

Supervising financial reporting■

Evaluating internal and external auditing■

ASCOM ANNUAL REPORT 2009 CORPORATE GOVERNANCE

29

Compensation & Nomination Committee

Members:

Dr Wolfgang Kalsbach (Chairman) and Dr J.T. Bergqvist

The Compensation & Nomination Committee is com-

posed of two non-executivemembers of the Board of Direc-

tors and is convened by the Chairman as often as business

requires. Four meetings were held in 2009. The CEO and the

Director of Corporate Human Resources attend as andwhen

required. The full Board of Directors is regularly briefed on

the Compensation & Nomination Committee’s activities.

Themain activities performed by the Compensation &

Nomination Committee are to formulate the proposals to

the full Board of Directors with regard to:

The Ascom Group’s salary policy■

Defining compensationmodels for members of the Board■

of Directors and the Executive Board

Implementation and supervision of stock option plans■

Selecting candidates for election to the Board of Direc-■

tors

Selecting candidates for appointment to the Executive■

Board

Annual appraisals of top management■

Strategy Committee

Members:

Juhani Anttila (Chairman) and Dr J.T. Bergqvist

The Strategy Committee is composed of two non-ex-

ecutive members of the Board of Directors and is convened

by the Chairman as often as business requires. Three meet-

ings were held in 2009. The CEO attends the meetings. The

full Board of Directors is regularly briefed on the Strategy

Committee’s activities.

The main activities performed by the Strategy Com-

mittee are to formulate proposals for the full Board of Direc-

tors with regard to:

Portfolio of business activities, mergers and acquisitions,■

supervision of technology trends, structure of the Ascom

Group

Performance planning, in particular cost structure and■

value-enhancing measures

Areas of responsibility

The Board of Directors has delegated the manage-

ment of ongoing business to the CEO who, together with

the Executive Board as an advisory body, is responsible for

overall management of the AscomGroup. A detailed defini-

tion of areas of responsibility is set down in the Annex to

the Organizational Regulations. The Board of Directors is

responsible in particular for approving the budget, autho-

rizing important acquisitions and divestments, and

appointing and discharging members of the Executive

Board.


30

Internal Control System (ICS)

A Board directive and the ICS manual govern the

Internal Control System (ICS). The ICS ensures the imple-

mentation of appropriate procedures andmeasures for the

purpose of identifying and monitoring the main risks to

which the company is exposed. In particular, the aim of the

ICS is to ensure the integrity and completeness of account-

ing and bookkeeping, to provide timely and reliable finan-

cial reporting, and to prevent, minimize and identify errors

and irregularities in the financial statements.

4. EXECUTIVE BOARD

The Executive Board of the Ascom Group

The Executive Board is responsible for operational

management of the Ascom Group within the framework of

the delegation of responsibilities. Its duties are set down

in the Organizational Regulations and the corresponding

Annexes.

Composition of the Ascom Executive Board

The Ascom Group Executive Board comprised the

following members as of 1 January 2010:

Executive Board

member since

Riet Cadonau CEO 20.8.2007

Fritz Mumenthaler Deputy CEO / GeneralManager Wireless Solutions

1.6.2005

Dr Fritz Gantert General Manager SecurityCommunication

1.10.2007

Dr Martin Zwyssig CFO 1.9.2008

Rikard Lundqvist General ManagerNetwork Testing

1.1.2010


Information and control instruments in respect

of the Executive Board / management instruments

The Ascom Group’s management information system

(MIS) consists of management reporting and financial con-

solidation.

Each month the balance sheet, income statement, in-

coming orders, order backlog and employee headcount for

the individual companies are entered in the management

reporting system. This information is consolidated for the

various divisions and for the Group as a whole, and com-

pared against the previous year’s figures and the current

budget. The Executive Board discusses the results in detail

on a monthly basis and decides about the actions to be

taken.

Financial consolidation in compliance with IFRS is

performed on a quarterly basis by all subsidiaries, which

are consolidated by segment, region and the Group as a

whole.

Financial reports are submitted to the Board of Direc-

tors on a monthly basis.

Additional management instruments for the moni-

toring ofmanagement processes include strategicmedium-

term planning (MTP), annual planning and quarterly

forecasts. Regular reports are presented to the Board of

Directors and the Audit Committee on topics such as legal

issues and risk management. For information purposes,

meetings of the Board of Directors and the Audit Committee

are attended by the CEO and CFO as well as, where neces-

sary, other members of management.

Internal auditing is performed on a mandate basis by

Ernst & Young according to the directions of the Audit Com-

mittee. The internal audit plan is revised on an annual basis

in conjunctionwith the external auditors andmanagement,

and approved by the Audit Committee. Special audits are

also commissioned as and when required.

31

Changes in the Executive Board

On 1 January 2010, Rikard Lundqvist was appointed as

General Manager Network Testing and joined the Executive

Board.

Other mandates of members of the Executive Board

The members of the Executive Board hold the follow-

ing positions on the Boards of other exchange-listed com-

panies: Riet Cadonau is a member of the Board of Directors

of Kaba Holding AG, Rümlang, and Dr Fritz Gantert is amem-

ber of the Board of Directors of Datacolor AG, Lucerne.

The members of the Executive Board are involved in

following activities in governing or supervisory bodies of

important public- and private-law Swiss and foreign cor-

porations, institutions and foundations: Riet Cadonau is a

member of the Board of Directors of Griesser Holding AG,

Aadorf, and Dr Fritz Gantert is a member of the Board of

Directors of Fraisa Holding AG, Bellach, and of Wandfluh

Holding AG, Frutigen.

Dr Fritz Gantert is Chairman of the Swiss Association

for Technology and Army (STA). The other members of the

Executive Board do not perform any permanent manage-

rial or consultancy functions for important Swiss or foreign

interest groups or hold any official positions or political

offices.

Mode of operation of the Executive Board

The Executive Board generally convenes on amonthly

basis. Additional meetings or conference calls are held as

and when necessary. Twelve meetings were held in 2009.

Management contracts

There are nomanagement contracts within the Ascom

Group.

Organization of the internal audit

The internal auditing mandate was awarded to Ernst

& Young Ltd, Zurich, with effect from 1 December 2002. Fees

are based on the scope of services rendered. In 2009 Ernst

& Young performed various individual audits . Ernst & Young

were paid remuneration totaling CHF 298,500 (including

expenses) for these services.

Business relationships with closely associated

companies and persons

No significant business transactions exist with closely

associated companies and persons.

5. COMPENSATION, SHAREHOLDINGS AND LOANS

All details of compensation, shareholdings and loans

are listed in the Remuneration Report on pages 37 to 41 of

this Annual Report. This information can also be found in

note 7 to the financial statements of Ascom Holding Ltd.

(page 103 of this Annual Report).


32 ASCom AnnuAl RepoRt 2009 Corporate GovernanCe

executive board

Riet Cadonau Chief Executive Officer of the Ascom Group

Nationality: Swiss | Born 1961

> 1988 Master of Business Administration, University of Zurich (lic.

oec. publ.) > 1988 Executive Marketing Assistant, Swiss Bank

Corporation, Basle > 1990 Various sales and management positions

incl. Account Executive (worldwide); Head of Banking business unit,

IBM Switzerland, Zurich > 1998 Member of the Executive Board and

Head of Global Services, IBM Switzerland, Zurich > 2001 Ascom

Group, General Manager of the Integrated Services Division and

member of the Executive Board > 2002 General Manager of the

Transport Revenue Division, Deputy CEO of the Ascom Group

> 2005 After completion of divestment: Managing Director Transport

Revenue, ACS; from 2006 also Senior Vice President, ACS Europe

> 2007 Studies at INSEAD (AMP) in Fontainebleau/Paris

> Since 20 August 2007 CEO of the Ascom Group

Dr Martin Zwyssig Chief Financial Officer of the Ascom Group


> 1992 MBA from the University of St. Gallen (lic. oec. HSG)

> 1995 PhD in Economics (Dr. oec.) from the University of St. Gallen

> 1995 – 1997 Corporate Controlling, Swiss Bank Corporation, Basle

> 1997 – 2001 Divisional Controller, Sarnatech/Sarnamotive,

Sarna Kunststoff Holding AG, Sarnen > 2001 – 2002 Senior Vice

President Finance & Controlling, EMS-TOGO Group, Romanshorn

> 2003 – 2008 CFO and Member of the Group Executive Board of

Schaffner Holding AG, Luterbach > Since 1 September 2008 CFO of

the Ascom Group and Member of the Executive Board

From left: Fritz Mumenthaler, Riet Cadonau, Rikard Lundqvist, Martin Zwyssig, Fritz Gantert


Dr Fritz Gantert General Manager Security Communication


> 1982 Degree in mechanical process engineering, construction and

industrial management, Federal Institute of Technology (ETH), Zurich

> 1983 – 1987 Assistant at the Institute of Industrial Management

before transferring to the Stiftung BWI für Forschung und Beratung

(Foundation for Research and Consulting) > 1987 PhD, ETH Zürich

> 1988 – 1998 Various management positions, Ascom AG, Berne,

including Head of Electronics Production and Head of the Paysys

Division; latterly as Head of Ascom Service Automation Switzerland

> 1991 – 1992 Executive MBA from the Graduate School of Business

Administration, Zurich > 1998 – 2001 Member of the Group

Executive Board, Sarna Kunststoff Holding AG, Sarnen, Head of the

Sarnatech Division, subsequently set up the Sarnamotive Division

> 2001 – 2006 Delegate to the Board of Directors and CEO of

Schaffner Holding AG, Luterbach > Since 1 October 2007 General

Manager Security Communication (former Security Solutions) and

Member of the Executive Board of the Ascom Group

Fritz Mumenthaler General Manager Wireless Solutions

& Deputy CEO


> 1985 Degree in business administration from the Universities of

Berne and Neuchâtel (lic. rer. pol.) > 1985 Manager Human Resources,

Credit Suisse > 1988 MBA from INSEAD, Fontainebleau/Paris

> 1989 Assistant Director, Swissphone Telecommunications

> 1992 Project Manager Corporate Development, Landis & Gyr

> 1994 Head of Marketing Europe, subsequently Head of Global

Marketing of Landis & Gyr Building Control resp. Siemens Building

Technologies., Building Automation Division > 2000 Head of Zone

Europe, Member of the Division Management Team, Siemens Building

Technologies, Building Automation Division > Since 1 June 2005

General Manager Wireless Solutions and Member of the Executive

Board of the Ascom Group > Since 20 August 2007 also Deputy CEO

Rikard Lundqvist General Manager Network Testing

(since 1 January 2010)

Nationality: Swedish | Born 1967

> 1991 Master of Science in Computer Science and Engineering

(University of Lulea, Sweden) > 1994 – 1996 Manager Product

Market Strategies Ericsson Erisoft AB, Skelleftea (Sweden)

> 1996 – 1999 Regional Sales Manager TEMS, Dallas TX (USA)

> 1999 – 2005 Director Global Product Management TEMS, Reston

VA (USA) > 2005 – 2006 Chief Technology Officer TEMS, Reston VA

(USA) > 2006 – 2008 Head of Strategy and Business Development

TEMS, Reston VA (USA) > 2008 – 2009 Vice President and General

Manager TEMS, Reston VA (USA) > Since 1 January 2010 General

Manager Network Testing and Member of the Executive Board of the

Ascom Group

34

decided by the relative majority of votes in a second

ballot.

The Chairman holds the casting vote.■

The Board of Directors determines the voting procedure.■

Shareholders representing registered shares with a par

value of CHF 100,000 are entitled to demand a written

ballot. This threshold corresponds to 0.5% of the votes.

Convocation of the Annual General Meeting

The Annual General Meeting is convened by the Board of■

Directors or, if need be, by the auditors.

Convocation is effected no later than 20 days before the■

date of the meeting by a single announcement in the

company’s publication of record (the Swiss Official

Gazette of Commerce – SOGC) and by letter to the share-

holders.

Agenda

In accordance with art. 699 para. 3 of the Swiss Code of■

Obligations, requests to place an item on the agendamust

be submitted to the Board of Directors no later than 45

days before the date of the Annual General Meeting.

The invitation to submit agenda items is published in a■

single announcement in the company’s publication organ

(the SOGC).

Registration in the share register

All shareholders recorded in the share register as voting■

shareholders 10 days before the date of the Annual Gen-

eral Meeting are admitted to the meeting and entitled to

vote.

Shareholders who dispose of their shares before the■

Annual General Meeting are no longer entitled to vote.

6. SHAREHOLDERS’ PARTICIPATION RIGHTS

Voting rights and protective rights

Shareholders in Swiss joint-stock companies have

extensive participation and protective rights governed in

principle by the Swiss Code of Obligations (OR) and supple-

mented by the respective company’s Articles of Incorpo-

ration. The main rights enjoyed by shareholders of Ascom

Holding Ltd. are listed below.

Annual General Meeting

Voting rights and representation

Each share entitles the holder to one vote represented at■

the Annual General Meeting. There are no voting right

restrictions.

Each shareholdermay be represented by proxy at the An-■

nual General Meeting by another shareholder who holds

a power of attorney and is recorded in the share register

as a voting shareholder.

Sole proprietorships, partnerships and legal entities may■

be represented by authorized signatories, natural persons

by their legal representatives and married persons by

their spouses, even if these representatives are not share-

holders.

The Board of Directors makes the requisite arrangements■

to determine voting rights and to establish the results of

votes and elections.

Resolutions and elections

The Annual General Meeting has a quorum for transaction■

of business regardless of the number of votes repre-

sented.

Unless otherwise stipulated by law, the Annual General■

Meeting adopts resolutions and carries out votes by an

absolute majority of valid votes cast. Elections are


35

7. CHANGE OF CONTROL AND DEFENSIVE MEASURES

Obligation to submit a purchase offer

The Articles of Incorporation of Ascom Holding Ltd.

contain neither an opting-out nor an opting-up clause. Any-

onewho acquires one-third (331/3%) of AscomHolding Ltd’s

share capital is obliged under the Stock Exchange Act (art.

32, SESTA) to submit a public purchase offer for the remain-

ing shares.

Change of control clauses

No change of control clauses have been agreed in cov-

enants with members of the Board of Directors. The period

of notice for senior management varies between 12 and 24

months. In certain cases a change of control can result in

the employee concerned being granted the right to be re-

leased with continued payment of salary during the notice

period or the right to a special payment up to the amount

of one year’s salary.

8. AUDITORS

Auditors

PricewaterhouseCoopers Ltd., Zurich (formerly STG

Coopers & Lybrand Ltd.), have acted as auditors since 1987.

Stefan Räbsamen has been auditor-in-charge since 2007.

The auditors are appointed by the Annual General Meeting

for a term of one fiscal year.

Auditing fee

PricewaterhouseCoopers was paid compensation of

CHF 1,071,788 (previous year: CHF 1,057,357) for services in

connection with auditing the annual financial statements

of Ascom Holding Ltd. and Group companies and the con-

solidated statements of the Ascom Group for the year

ended 31 December 2009.

Additional fees

In 2009 PricewaterhouseCoopers was paid the follow-

ing additional fees:

Tax consulting CHF 159,449 (previous year: CHF 205,519)

Miscellaneous (e.g. IT audit tasks)

CHF 107,875 (previous year: CHF 384,479)

Total CHF 267,324 (previous year: CHF 589,998)

Monitoring and control instruments

As a committee of the Board of Directors, the Audit

Committee evaluates the performance, fees and indepen-

dence of the external auditors each year.

The external auditors prepare a detailed audit report

at least once a year and report in detail to the Audit Com-

mittee. Themain findings and recommendations contained

in the audit reports of the external auditors are then dis-

cussed in detail with the CFO.

In 2009, the external auditors drew up two detailed

management reports (for the Half-Year Report and the An-

nual Report). The external auditors attended all Audit Com-

mittee meetings held in 2009, at least for part of the

time.

Each year the Board of Directors reviews the selection

of auditors in order to propose them to shareholders for

appointment at the Annual General Meeting. The Audit

Committee assesses the effectiveness of the auditors in

compliance with the legal provisions in Switzerland. The

Board of Directors bases the rotation cycle for the auditor-

in-charge on the relevant provisions of the Swiss Code of

Obligations, according to which the auditor-in-charge may

perform his mandate for no more than seven years.

The Audit Committee also examines the ratio between

the fee for the annual audit and fees for additional services

performed by the auditors, in order to ensure that the audi-

tors’ independence is not impaired. For the 2009 reporting

year, the Board of Directors concluded that the auditors’

independence was fully assured.



All media releases (www.ascom.com/en/index/news-

corporate.htm) and presentations at media conferences

(www.ascom.com/en/index/investor-relations/ir-reports-

presentations.htm) can be downloaded from the website.

Media releases may also be received by e-mail by subscrib-

ing to the News Service on the website, or via News Feed

(www.ascom.com/en/index/news-corporate/news-ser-

vice/hugin-subscription-form.htm).

The Articles of Incorporation of Ascom Holding Ltd.,

the Organizational Regulations, a current extract from the

Commercial Register and the minutes of the last Annual

General Meeting can be downloaded from the website un-

der “Corporate Governance” (www.ascom.com/en/index/

investor-relations/about-the-group/corporate-gover-

nance.htm).

Implementation of publication requirements

under stock exchange regulations

The Board of Directors has issued an Annex to the

Organizational Regulations entitled “Corporate Policy and

Procedure on Insider Trading”, which in particular prohibits

Ascom employees and governing bodies of Ascom from

engaging in insider trading. An absolute ban on trading

applies during a period of at least four weeks prior to the

publication of the annual results and half-year results.

Information onmanagement transactions is published

underwww.six-swiss-exchange.com,ProductSearch“ASCN”,

Overview, Management transactions.

Detailed information on disclosure announcements

can be viewed underwww.six-swiss-exchange.com, Product

Search “ASCN”, Overview, Significant shareholders.

Dates and contacts

A list of important dates in 2010 and contacts for Cor-

porate Communications as well as for Investor Relations are

available on page 115 of this Annual Report.

9. INFORMATION POLICY

The Board of Directors of Ascom Holding Ltd. and the

Executive Board have undertaken to align their organiza-

tional structure in compliance with the latest corporate

governance standards.

Ascom’s information policy is based on commitment

to a high degree of transparency and equal treatment of all

stakeholder groups. Corporate communications come under

the remit of the General Secretary. Ascom Holding Ltd. pro-

vides a wide range of communication tools to keep its

shareholders, the media, analysts and other stakeholder

groups informed:

Publications

Annual Report■

Half-Year Report■

The official publication organ is the Swiss Official Gazette■

of Commerce (SOGC)

Events

Annual Media Conference and Half-YearMedia Conference■

for media representatives and analysts

Ad-hoc Media Conferences■

Investor & Media Day■

Annual General Meeting of Shareholders■

Roadshows for institutional investors■

Media releases

In accordance with the provisions of the SIX Swiss Ex-

change, Ascom publishes information on ad-hoc publicity

rules. Furthermore, Ascom publishes Ascommedia releases

on significant business activities and on important product

and service innovations.

Internet

TheAscomwebsite (www.ascom.com) provides a com-

prehensive overview of the company’s structure and activi-

ties and the offerings of the individual business units.

37ASCOM ANNUAL REPORT 2009 REMUNERATION REPORT

measurable quantitative targets set (e.g. revenue, EBIT).

The individual incentive targets used to determine the vari-

able salary component (bonus calculation) for members of

the Executive Board are defined annually by the full Board

of Directors at the request of the Compensation & Nomi-

nation Committee. On fully achieving all defined targets,

the respective member of the Executive Board receives a

predetermined percentage of his basic salary as a target

bonus.

The CEO receives a bonus of 50% of his basic salary on

fully achieving all defined targets. In cases where the tar-

gets set are exceeded, the CEO is paid an increased bonus

up to a maximum of potentially doubling the target bonus

of 50% of the basic salary.

The other members of the Executive Board receive a

bonus of 40% of their basic salary on fully achieving all

defined targets. In cases where the targets set within the

respective member’s area of responsibility as well as the

Group targets are exceeded, the other members of the Ex-

ecutive Board are paid an increased bonus in line with the

individually defined incentive target up to a maximum of

potentially doubling the target bonus of 40% of the basic

salary.

In addition, since 2003 the Board of Directors has

approved an option program for senior management on an

annual basis, with a view to rewarding behavior geared to-

wards medium and long-term success with compensation

elements that are only available at a later point in time.

Options are allocated on the basis of stock option plans set

up each year and agreed in writing. The conditions for ex-

ercising such options are defined when they are allocated,

with no subsequent changes being made and in particular

no re-pricing. The strike price corresponds at least to the

market price on the exercise date or to the average market

price over a defined number of trading days before this

date. The management of the Ascom Stock Option Plans is

This Remuneration Report provides information on

the compensation paid by Ascom in fiscal year 2009. This

report is an integral part of the Annual Report, which

will be presented to the 2010 Annual General Meeting for

approval.

1. Content and method of determining remuneration

and stock option plans

a) Board of Directors

Members of the Board of Directors receive a fee in

accordance with the Compensation Regulations Annex to

theOrganizational Regulations (www.ascom.com/en/index/

investor-relations/about-the-group/corporate-gover-

nance.htm). The fee is paid in cash. No other compensation

is paid.

Since 2007, the fee for a regular member of the Board

of Directors has been CHF 100,000 per annum.

The fees for the Chairman and Vice-Chairman of the

Board of Directors have not changed since 2004. The Chair-

man of the Board of Directors receives a fee of CHF 240,000

per annum. The Vice-Chairman of the Board of Directors,

who is also Chairman of the Audit Committee, receives a fee

of CHF 160,000 per annum.

b) Executive Board

The compensation packages for all members of the

Executive Board are set by the full Board of Directors based

on the recommendation of the Compensation & Nomination

Committee. The Compensation & Nomination Committee is

made up exclusively of independent members of the Board

of Directors.

Total compensation for each member consists of a

basic salary according to the responsibility and a perfor-

mance-related bonus as a variable component. The perfor-

mance-related bonus is linked to the attainment of clearly

REMUNERATION REPORT

38 ASCOM ANNUAL REPORT 2009 REMUNERATION REPORT

b) Executive Board

The total paid to all four members active in the Execu-

tive Board in the fiscal year 2009 amounted to CHF 2,883,590

(2008: CHF 3,766,480). The total amount includes employ-

er’s contributions to the occupational pension scheme

in the amount of CHF 229,000 as well as provisions of

CHF 382,000 in respect of the contractually agreed bonus

entitlements of the four Executive Board members cur-

rently in office.

Executive Board members’ bonus entitlements for

2009 will be calculated and paid in April 2010 after approv-

al of the annual financial statements. The criteria governing

payment of the 2009 bonus are measurable and contractu-

ally regulated. In addition, the members of the Executive

Board were allocated a total of 185,700 options under the

2009 Ascom Stock Option Plan. These options are valued at

a total of CHF 393,065, based on the value at the time they

were granted.

The highest total compensation within the Executive

Boardwas paid to the CEO. The total compensation for 2009

amounted to CHF 797,000 (basic salary and bonus provi-

sion). Pension contributions amounted to CHF 82,000. The

CEO was also allocated 86,700 options under the Ascom

Stock Option Plan 2009. These options are valued at a total

of CHF 183,515 based on the value at the time they were

granted.

within the responsibility of the Board of Directors.

In 2009, the CEO received options worth 20% of the

total of his basic salary and 100% bonus potential under

the Ascom Stock Option Plan 2009. The other members of

the Executive Board received options worth 20% of the

total of their basic salaries and target bonuses. The value

of the options was determined by an independent third

party.

In the context of the legal and contractual provisions,

the company also pays employer’s contributions to the

occupational pension plans of members of the Executive

Board.

2. Remuneration for acting members of governing

bodies

The following compensation was paid in 2009:


Themembers of the Board of Directors were paid com-

pensation totaling CHF 700,000 in 2009.

CHF

Juhani Anttila, Chairman 240,000

Paul E. Otth, Vice-Chairman 160,000

Dr J.T. Bergqvist 100,000

Dr Wolfgang Kalsbach 100,000

Kenth-Ake Jönsson (since 15.4.2009) 70,830

Dr Axel Paeger 29,170

No members of the Board of Directors received any

additional payments as defined by art. 663bbis of the Swiss

Code of Obligations, nor were any payments made to par-

ties closely related to the Board of Directors.

No members of the Board of Directors or parties

closely linked to them received any loans from the com-

pany.


No members of the Executive Board received any ad-

ditional payments as defined by art. 663bbis of the Swiss

Code of Obligations, nor were any payments made to par-

ties closely linked to the Executive Board.

No members of the Executive Board or parties closely

linked to them received any additional payments or loans

from the company.

3. Remuneration for former members of governing

bodies

In 2009, the former CEO Rudolf Hadorn was paid an

amount of CHF 75,000 in compliance with contractual com-

mitments according to his contract of employment (accrued

annual leave), thereby settling all claims.

In 2009, the former CFO Alberto Romaneschi was paid

an amount of CHF 335,000 in compliance with contractual

commitments according to his contract of employment,

thereby settling all claims.

No other former members of the Board of Directors

or Executive Board received any compensation in the year

under review.

No former members of the Board of Directors, Execu-

tive Board or parties closely related to them received any

loans from the company.

4. Share ownership

The number of Ascom Holding Ltd. shares held as of

31 December 2009:


All members of the Board of Directors and parties closely■

linked to them, in toto: 75,500 shares.

Shares

Juhani Anttila, Chairman 75,500

Paul E. Otth, Vice-Chairman 0

Dr J.T. Bergqvist 0

Kenth-Ake Jönsson 0

Dr Wolfgang Kalsbach 0

No members of the Board of Directors or parties closely■

linked to them hold any conversion or option rights.

b) Executive Board

All members of the Executive Board and parties closely■

linked to them, in toto: 95,000 shares and 568,100 options

(all employee options).

in CHF Basic salary Bonus

provision

Miscellaneous Pension

contributions

Options 1 Total

CEO 650,000 147,000 0 82,000 183,515 1,062,515

Other members 1,120,000 235,000 109,525 147,000 209,550 1,821,075

Total Executive Board 1,770,000 382,000 109,525 229,000 393,065 2,883,590

1 Fair value of the options granted in 2009, calculated at the time they were granted using a binomial model.

40 ASCOM ANNUAL REPORT 2009 REMUNERATION REPORT

Due to the par value repayment of CHF 5 per share, the

Board of Directors decided on 30 June 2006 to reduce the

strike price by CHF 5 for all options still outstanding, with

immediate effect. The strike price for all options still out-

standing from the 2005 Ascom Stock Option Plan was set

at CHF 14.75.

None of the 106,200 options still outstanding in 2009

was exercised. 60,300 were forfeited, and the remaining

45,900 are still outstanding.

b) Ascom Stock Option Plan 2007/I

In accordancewith the resolution passed by the Board

of Directors on 5March 2007, a total of 95,400 options were

issued to three members of Ascom senior management on

5 March 2007 and 14 May 2007 respectively, each option

entitling the holder to purchase one share with a par value

of CHF 0.50. The strike price is CHF 19.85. The options have

a duration of four years and are subject both to an exercise

hurdle (outperformance of the SMI index within a period of

12 months) and to a blocking period to 4 March 2009.

All 95,400 options are still outstanding.

c) Ascom Stock Option Plan 2007/II


of Directors on 25 September 2007, a total of 360,000 op-

tions were issued to 26members of Ascom senior manage-

ment on 1 October 2007, each option entitling the holder to

purchase one share with a par value of CHF 0.50. The strike

price is CHF 13.00. The options have a duration of four years

and are subject both to an exercise hurdle (outperformance

of the SMI index within a period of 12 months) and to a

vesting period (one third of the options can be exercised

after one year).

c) Share allotment in the year under review

Ascom Holding Ltd. allotted no shares in 2009.■

5. Options

a) Ascom Stock Option Plan 2006


of Directors on 6 April 2006 and 29 August 2006, a total of

135,400 options were issued to four members of Ascom

seniormanagement on 1March 2006 and 1 September 2006

respectively, each option entitling the holder to purchase

one share with a par value of CHF 5.50. The strike price is

CHF 19.75. The options have a duration of four years and are

subject both to an exercise hurdle (outperformance of the

SMI index within a period of 12 months) and to a blocking

period to 28 February 2008.

Number Shares Options Employeeoptions(exercis-

able)1

Employeeoptions

(not exer-cisable)1

Riet Cadonau,CEO

30,000 0 109,633 153,967

Fritz Mumenthaler,GM WS & Deputy CEO

20,000 0 88,500 63,500

Dr Fritz Gantert,GM SeCom

45,000 0 28,000 63,500

Dr Martin Zwyssig,CFO

0 0 9,333 51,667

Total Executive Board 95,000 0 235,466 332,634

1 In accordance with the provisions of Ascom Stock Option Plans 2006, 2007/I,

2007/II, 2008 and 2009. Ratio 1:1


f) Options held as of 31 December 2009

Issue date Duration

in years

Strike price

CHF

Exercised

options

Expired

options

Retained

options

1.3.2006 4 14.75 0 89,500 45,900

5.3.2007 4 19.85 0 0 95,400

1.10.2007 4 13.00 0 18,000 342,000

3.3.2008 4 12.50 5,000 0 165,400

2.3.2009 4 7.70 0 0 490,200

The 1,138,900 options issued and not yet exercised or

expired as of 31 December 2009 correspond to 3.16% of the

total share capital.

None of the 354,000 options still outstanding was ex-

ercised in 2009. 12,000 were forfeited, and the remaining


d) Ascom Stock Option Plan 2008


of Directors on 3 March 2008, a total of 170,400 options

were issued to six members of Ascom senior management

on 3 March 2008, 28 July 2008 and 4 August 2008 respec-

tively, each option entitling the holder to purchase one

share with a par value of CHF 0.50. The strike price is

CHF 12.50. The options have a duration of four years and

are subject both to an exercise hurdle (outperformance of

the SMI indexwithin a period of 12months) and to a vesting

period (one third of the options can be exercised after one

year).

In 2009, 5,000 options were exercised. The remaining


e) Ascom Stock Option Plan 2009


of Directors on 2 March 2009, a total of 490,200 options

were issued to 33 members of Ascom senior management

on 2 March 2009, 1 June 2009, 12 June 2009, 29 June 2009,

3 August 2009 and 12 August 2009 respectively, each option

entitling the holder to purchase one share with a par value

of CHF 0.50. The strike price is CHF 7.70. The options have a

duration of four years and are subject both to an exercise

hurdle (outperformance of the SMI index within a period

of 12 months) and to a vesting period (one third of the

options can be exercised after one year).

All 490,200 options are still outstanding.

FINANCIAL STATEMENTS 2009

Ascom Group

44 Consolidated statement of financial position

45 Consolidated statement of comprehensive income

46 Consolidated statement of cash flows

47 Consolidated statement of changes in equity

48 Notes to the consolidated financial statements

97 Report of the statutory auditors on the consolidated financial statements

99 Summary of key financial data

Ascom Holding Ltd.

100 Balance sheet

101 Income statement

102 Notes to the annual financial statements

107 Comments on the financial statements

108 Proposal for the appropriation of retained earnings 2009

109 Report of the statutory auditors on the financial statements

111 Key financial data on the share capital

43ASCOM FINANCIAL STATEMENTS 2009 FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CHFm Note 31.12.2009 31.12.2008

ASSETS Property, plant and equipment 4 29.1 28.9

Intangible assets 5 238.8 31.1

Deferred income tax assets 6 4.3 2.4

Financial assets 7 5.5 11.6

Other non-current assets 11 2.7 2.0

Non-current assets 280.4 76.0

Inventories and work in progress 9 47.3 48.6

Trade receivables 10 108.2 83.7

Other current assets 11 45.1 56.3

Financial assets held for trading purposes 12 0.5 0.5

Cash and cash equivalents 13 127.7 182.6

328.8 371.7

Assets held for sale 30 – 3.5

Current assets 328.8 375.2

Total assets 609.2 451.2

LIABILITIES

AND

SHARE-

HOLDERS’

EQUITY

Equity attributable to owners of the parent 179.3 148.6

Minority interests 16 – 0.1

Shareholders’ equity 179.3 148.7

Borrowings 17 75.1 –

Deferred income tax liabilities 6 20.9 3.1

Retirement benefit obligations 18 15.9 13.6

Provisions 19 17.4 17.1

Other liabilities 1.4 1.2

Non-current liabilities 130.7 35.0

Borrowings 17 25.1 –

Provisions 19 34.1 33.1

Trade payables 29.9 27.1

Liabilities for income taxes 6.6 1.3

Other liabilities 20 203.5 189.2

299.2 250.7

Liabilities in relation to assets held for sale 30 – 16.8

Current liabilities 299.2 267.5

Total liabilities 429.9 302.5

Total liabilities and shareholders’ equity 609.2 451.2

The notes on pages 48 to 96 are an integral part of the consolidated financial statements.

ASCOM FINANCIAL STATEMENTS 2009 GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION44

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CHFm Note 2009 2008

Revenue 21, 36 537.2 509.2

Cost of goods sold (309.9) (300.3)

Gross profit 227.3 208.9

Marketing and distribution (104.2) (102.7)

Research and development (47.0) (32.9)

Administration (40.5) (31.5)

Amortization of intangible assets from acquisition1 5 (7.9) –

Other income/(expenses), net 22 5.1 2.2

Earnings before interest and income taxes (EBIT) 36 32.8 44.0

Financial income 23 5.3 5.9

Financial expenses 23 (5.6) (9.0)

Earnings before income taxes (EBT) 32.5 40.9

Income taxes 24 (8.1) (8.2)

Profit for the year from continuing operations 24.4 32.7

Loss for the year from discontinued operations 30 – (24.5)

Group profit for the year 24.4 8.2

Other comprehensive income

Currency translation adjustments 5.8 (17.3)

Total comprehensive income for the year 30.2 (9.1)

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

Group profit for the year attributable to

Owners of the parent 24.5 8.2

Minority interest (0.1) –

Total comprehensive income for the year attributable to

Owners of the parent 30.3 (9.1)

Minority interest (0.1) –

Earnings per share from continuing operations in CHF

basic 0.70 0.93

diluted 0.70 0.93

Earnings per share in CHF

basic 27 0.70 0.23

diluted 27 0.70 0.23


ASCOM FINANCIAL STATEMENTS 2009 GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 45

CONSOLIDATED STATEMENT OF CASH FLOWS

CHFm Note 2009 2008

Group profit for the year 24.4 8.2

+ Depreciation and impairment of property, plant and equipment 4 7.1 7.4

+ Amortization and impairment of intangible assets 5 9.9 1.4

- (Profit)/loss from disposal of property, plant and equipment 22 (0.2) (0.2)

- (Profit)/loss from divestment of a subsidiary or business 2 (3.6) 13.7

+ Share based payments 29 1.4 1.4

+/- Increase/(release) of provisions 2.2 0.9

- Provisions paid 19 (16.9) (13.8)

+/- Change in inventory and work in progress 6.7 (7.8)

+/- Change in trade receivables (6.7) (4.6)

+/- Change in trade payables (5.7) (8.0)

+/- Change in other current assets and other liabilities 2.8 (1.1)

+/- Interest (income)/expenses, net 23 2.0 (3.7)

+ Interest received 1.1 5.7

- Interest paid (2.5) –

+ Income tax expenses, net 24 8.1 8.5

- Income tax paid (5.9) (10.3)

+/- Foreign currency translation differences from intra-group positions 0.3 –

Net cash flow from operating activities 24.5 (2.3)

- Purchase of property, plant and equipment 4 (6.4) (6.7)

+ Proceeds from sale of property, plant and equipment 0.5 1.6

- Purchase of intangible assets 5 (3.0) (5.0)

- Acquisition of a subsidiary or business 2 (181.4) (11.5)

+ Proceeds from divestment of a subsidiary or business 2 4.1 3.4

+/- Change in financial assets and other non-current assets 6.1 (7.8)

Net cash flow from investing activities (180.1) (26.0)

+ Increase in borrowings 120.2 –

- Repayment of borrowings (20.0) –

+ Proceeds from sale of own shares 15 0.1 0.1

- Purchase of own shares 15 (0.8) (6.2)

Net cash flow from financing activities 99.5 (6.1)

+/- Effect of foreign exchange rate fluctuations on cash and cash equivalents 1.2 (6.0)

Net increase/(decrease) in cash and cash equivalents (54.9) (40.4)

+ Cash and cash equivalents at 1.1. 182.6 223.0

Cash and cash equivalents at 31.12. 13 127.7 182.6


46 ASCOM FINANCIAL STATEMENTS 2009 GROUP CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to owners of the parent

CHFm Sharecapital 1

Ownshares 1

Legal andspecial

reserves

Otherreserves

Currencytranslation

adjustments

Retainedearnings

Minorityinterests 2

Totalshareholders’

equity

Balance at 1.1.2008 18.0 (7.1) 21.9 3.0 (8.4) 135.0 0.1 162.5

Group profit for the year – – – – – 8.2 – 8.2

Currency translation adjustments – – – – (17.3) – – (17.3)

Total comprehensive incomefor the year

– – – – (17.3) 8.2 – (9.1)

Share-based payments – – – 1.4 – – – 1.4

Purchase of own shares – (6.2) – – – – – (6.2)

Disposal of own shares – 0.1 – – – – – 0.1

Total transactions with owners – (6.1) – 1.4 (17.3) 8.2 – (13.8)

Balance at 31.12.2008 18.0 (13.2) 21.9 4.4 (25.7) 143.2 0.1 148.7

Group profit for the year – – – – – 24.5 (0.1) 24.4

Currency translation adjustments – – – – 5.8 – – 5.8

Total comprehensive incomefor the year

– – – – 5.8 24.5 (0.1) 30.2

Share-based payments – – – 1.1 – – – 1.1

Purchase of own shares – (0.8) – – – – – (0.8)

Disposal of own shares – 0.1 – – – – – 0.1

Total transactions with owners – (0.7) – 1.1 5.8 24.5 (0.1) 30.6

Balance at 31.12.2009 18.0 (13.9) 21.9 5.5 (19.9) 167.7 – 179.3

1 Refer to note 15.2 Refer to note 16.


47ASCOM FINANCIAL STATEMENTS 2009 GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1. SUMMARY OF THE GENERAL GROUP ACCOUNTING POLICIES

1.1 General information

The Ascom consolidated financial statements are drawn up in Swiss francs (CHF) on the basis of

the individual Group company accounts. These are based on historical costs except for the revaluation

of certain financial assets at market values (more specifically – financial assets and liabilities

[including derivatives] at fair value through profit or loss), and are prepared in accordance with Inter-

national Financial Reporting Standards (IFRS) including the standards and interpretation guidelines

issued by the International Accounting Standards Board as well as the valuation and accounting

policies described below. These policies have been consistently applied.

The preparation of financial statements in conformity with IFRS requires the use of certain critical

accounting estimates. It also requires management to exercise its judgment in the process of applying

the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or

areas where assumptions and estimates are significant to the consolidated financial statements, are

disclosed in note 1.23.

The closing date for the Group and the individual companies is 31 December.

New accounting standards and IFRIC interpretations

a) Standards, amendments to published standards and interpretations effective in 2009with an effect

on Ascom’s financial statements:

IAS 1 (Revised) – “Presentation of Financial Statements”: The revised standard prohibits the

presentation of items of income and expenses (that is, “non-owner changes in equity”) in the state-

ment of changes in equity, requiring “non-owner changes in equity” to be presented separately from

owner changes in equity in a statement of comprehensive income. As a result the Group presents in

the consolidated statement of changes in equity, all owner changes in equity, whereas all non-owner

changes in equity are presented in the consolidated statement of comprehensive income. Comparative

information has been re-presented so that it also is in conformity with the revised standard. As the

change in accounting policy only impacts presentation aspects, there is no impact on earnings per

share.

IFRS 8 – “Operating Segments”: IFRS 8 replaces IAS 14 – “Segment Reporting”. It requires a man-

agement approach under which segment information is presented on the same basis as that used for

internal reporting purposes. Because of the fact that the previous reported segments were already

in line with the internal reporting, the application of IFRS 8 has no effect to the number of reportable

segments. Operating segments are reported in a manner consistent with the internal reporting

provided to the chief operating decision-maker. The CEO has been identified as the chief operating

decision-maker.

IFRS 7 – “Financial instruments – Disclosures” (amendment): The amendment requires enhanced

disclosures about fair value measurement and liquidity risk. In particular, the amendment requires

disclosure of fair value measurements by level of a fair value measurement hierarchy. As the change

in accounting policy only results in additional disclosures, there is no impact on earnings per share.

In addition, Ascom introduced the following changes on 1 January 2009: Amendments to IFRIC 11

– “Group and Treasury Share Transactions”, amendments to IFRIC 9 and IAS 39 – “Embedded

Derivatives” , amendments to IFRS 2 – “Vesting Conditions and Cancellations”, amendments to

IFRS 1 and IAS 27 – “Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate”,

IAS 23 – “Borrowing Costs”, amendments to IAS 32 and IAS 1 – “Puttable Financial Instruments and

Obligations Arising on Liquidation”, IFRIC 13 – “Customer Loyalty Programmes”, IFRIC 16 – “Hedges of

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

48 ASCOM FINANCIAL STATEMENTS 2009 GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

a Net Investment in a Foreign Operation”, IFRIC 15 – “Agreements for the Construction of Real Estate”,

as well as IFRS Improvements published in May 2008 to various IFRSs. These standards have no effect

on the consolidated statement of financial position or statement of comprehensive income of Ascom

Group, as they are either mostly disclosure regulations or are of little significance to Ascom Group.

b) The following new and revised standards and interpretations have been issued but are not yet

effective. They have not been early adopted in these consolidated financial statements.

Standard As-sess-ment

Effectivedate

Plannedapplicationby Ascom

IAS 27 (Revised) – “Consolidated and Separate Financial Statements” * 1.7.2009 2010

IFRS 3 (Revised) – “Business Combinations” *** 1.7.2009 2010

IFRIC 17 – “Distributions of Non-cash Assets to Owners” and consequentialamendment of IFRS 5 – “Non-current Assets Held for Sale and DiscontinuedOperations”

* 1.7.2009 2010

IAS 39 (Amendments) – “Eligible Hedged Items” * 1.7.2009 2010

IFRIC 18 – “Transfers of Assets from Customers” * 1.7.2009 2010

IFRS 2 (Amendments) – “Group Cash-settled Share-based PaymentTransactions”

*** 1.1.2010 2010

IFRS 1 (Amendments) – “Additional Exemptions for First-time Adopters” * 1.1.2010 2010

IAS 32 (Amendments) – “Classification of Rights Issues” * 1.2.2010 2011

IFRIC 19 – “Extinguishing Financial Liabilities with Equity Instruments” * 1.7.2010 2011

IAS 24 (Revised) – “Related Party Disclosures” * 1.1.2011 2011

IFRIC 14 (Amendments) – “Prepayments of a Minimum Funding Requirement” *** 1.1.2011 2011

IFRS 9 – “Financial Instruments” *** 1.1.2013 2013

IFRS Improvements published in April 2009 to various IFRSs **1.7.2009

– 1.1.20102010

* No impact or no significant impact expected on the consolidated financial statements.** The impact on the consolidated financial statements is expected to result in additional disclosures or

changes in presentations.*** The impact on the consolidated financial statements cannot yet be determined with sufficient reliability.

1.2 Consolidation

The consolidated financial statements cover Ascom Holding Ltd. and all companies over which

the Group has the power to govern the financial and operating policies generally accompanying a

shareholding of more than one half of the voting rights. The existence and effect of potential voting

rights that are currently exercisable or convertible are considered when assessing whether the Group

controls another entity. The list of the significant Group companies is included under note 37. The

purchasemethod of accounting is used to account for the acquisition of subsidiaries by the Group. The

cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and

liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisi-

tion. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business com-

bination are measured initially at their fair values at the acquisition date, irrespective of the extent of

any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of

the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the

fair value of the net assets of the subsidiary acquired, the difference is recognized as gain in profit or

loss on the acquisition date. Percentages in capital correspond to percentages in voting rights held.

49ASCOM FINANCIAL STATEMENTS 2009 GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Group companies are included in the consolidated financial statements in their entirety. Minority in-

terests in equity and the net income of Group companies are included in the equity and net income

respectively, and are disclosed separately (economic entity approach). Intercompany transactions and

balances, including intercompany profits, are eliminated on consolidation. Investments in companies

in which Ascom Group is able to exercise significant influence are associated companies (as a rule,

ownership between 20% and 50%) and are accounted for using the equity method. They are initially

recognized at cost and adjusted thereafter for the post-acquisition change in Ascom’s share of the

net assets of the investee. Companies acquired or disposed of during the year are consolidated or de-

consolidated from the date on which control is transferred to the Group or from the date the control

ceases. Profits or losses from disposals are charged to profit or loss.

1.3 Foreign currency translation

The consolidated financial statements are presented in Swiss francs (CHF), which is the Group’s

presentation currency.

All assets and liabilities of foreign entities are translated into the Group’s presentation currency

at the exchange rates prevailing on 31 December. Income, expenses and cash flows of foreign entities

are translated at average exchange rates for the year where this is considered an appropriate ap-

proximation of the applicable period rates. Exchange differences arising from the reconversion of the

net investment in subsidiaries or associated undertakings in foreign functional currencies are taken

to currency translation adjustments in equity. Also taken to equity are differences from the retrans-

lation of borrowings that hedge such investments in foreign Group companies. Upon disposal of a

foreign operation (e.g. through sale, liquidation or repayments of the share capital of all, or a part of

that entity), accumulated currency translation differences are recognized in profit or loss as part of

the gain or loss on sale.

Foreign currency translation

CHF ISO-code Unit 31.12.2009

Average2009

31.12.2008

Average2008

US dollar USD 1 1.032 1.082 1.059 1.082

Pound sterling GBP 1 1.669 1.679 1.530 2.041

Euro EUR 1 1.487 1.508 1.491 1.597

Swedish krona SEK 1 0.145 0.143 0.137 0.168

Items included in the financial statements of each of the Group’s entities are measured using the

currency of the primary economic environment inwhich the entity operates (“the functional currency”).

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets

and liabilities of the foreign entity and translated at the rate prevailing on the acquisition date. Trans-

actions in foreign currencies are accounted for at the exchange rates prevailing on the transaction

date. Gains and losses resulting from the settlement of such transactions and from the conversion of

monetary assets and liabilities denominated in foreign currencies are recognized in the statement of

comprehensive income. Such balances are converted into the functional currency of the foreign entity

at the exchange rates prevailing on 31 December.


1.4 Derivative financial instruments

All derivative financial instruments are designated as at fair value through profit or loss. Initially

they are recorded at their fair value including transaction costs. All purchases and sales are recognized

on the settlement date. Subsequently, derivative financial instruments are accounted for at market

value on a regular basis. No hedge accounting is applied.

All changes in market value of the financial instruments are recorded in net financial income/

(expenses) of the corresponding reporting period. Derivative financial instruments comprise forward

exchange contracts. Forwards are used to hedge currency risks.

1.5 Property, plant and equipment

Property, plant and equipment is recorded at purchase or manufacturing cost (i.e. historical cost)

less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the

items acquired. Leases of property, plant and equipment where the Group holds the risks and rewards

incident to ownership are classified as finance leases. Finance leases are capitalized at the inception

of the lease at the lower of the fair market value of the leased property or the present value of the

lease payments. At the same time, the corresponding lease obligations are included in the current and

non-current liabilities. Each leasing payment is allocated to the liability and the finance charges in

order to achieve a constant interest rate on the outstanding lease liability. The interest portion of the

lease payments is charged to the profit or loss over the lease period. Property, plant and equipment

acquired under finance leases are depreciated over the lease period or, if shorter, the useful life of the

asset. Land is valued at cost and is not depreciated. Depreciation on property, plant and equipment

is calculated using the straight-line method based on the estimated useful lives as shown in the

following table:

Useful life in years

Buildings 20–40

Installations and transport systems 7–10

Production equipment, measuring and test equipment, IT hardware, furniture 3–5

Tools 3

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the date

of that statement of financial position.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,

as appropriate, only when it is probable that future economic benefits associated with the item will

flow to the Group and the cost of the item can be measured reliably. The carrying amount of the

replaced part is derecognized. All other repairs and maintenance are charged to the profit or loss

during the financial period in which they are incurred.

Items of property, plant and equipment are eliminated from the statement of financial position

from their date of disposal, or written off when no further economic benefit can be expected from their

use. All gains or losses arising from the disposal of such items are included in the profit or loss. Where

the carrying amount of property, plant and equipment is higher than the recoverable amount, these

assets are impaired to the recoverable amount. The recoverable amount is the higher of an asset’s fair

value less costs to sell and value in use. Land and/or buildings that are held for appreciation of value

or for rental income are defined as investment properties. This real estate is carried at acquisition cost

less any necessary depreciation.


1.6 Intangible assets

Licenses, patents, trademarks, software and other similar rights are recorded at cost less accu-

mulated amortization. The amortization charge is calculated on a straight-line basis over the period

of its estimated useful economic life as shown in the following table:

Useful life in years

Licenses 3–5

Customer relations 10

Technology 7

Trademarks 5

Other 2–5

Purchased goodwill (the excess of the purchase price over the fair value of the net assets ac-

quired) is recorded as an intangible asset with an indefinite useful life that is tested for impairment

at least once a year. For the purposes of testing for impairment, the goodwill was allocated to the

corresponding cash generating units.

Goodwill is carried at cost less any accumulated impairment losses.

1.7 Financial assets/investments

Financial assets are classified as “Financial assets and liabilities at fair value through profit or

loss”, “Held-to-maturity investments”, “Loans and receivables” and “Financial assets available for

sale”.

a) Financial assets and liabilities at fair value through profit or loss

The financial assets and liabilities at fair value through profit or loss are either held for trading

purposes or designated as such. Financial investments held for trading are purchased with the inten-

tion of generating a profit from short-term fluctuations in the price. Derivatives are classified as held

for trading. Assets in this category are classified as current assets.

b) Held-to-maturity investments

Held-to-maturity investments are financial assets with a fixed term, which the Group has the

intention and ability to hold to maturity.

c) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments

that are not quoted in an active market. They are included in current assets, except for maturities

greater than 12 months after the date of that statement of financial position. These are classified as

non-current assets. Loans and receivables are classified as trade receivables and financial assets in the

statement of financial position.

d) Financial assets available for sale

Available-for-sale financial assets are non-derivative financial instruments that are either allo-

cated to this category or do not belong to any other category. They are included in non-current assets

unless management intends to dispose of the investment within 12 months of the date of that state-

ment of financial position.


All financial instruments are recorded initially at fair value including transaction costs. All pur-

chases and sales are recognized on the settlement date, i.e. on the day of the transfer of the asset.

After initial recognition, financial assets and liabilities at fair value through profit or loss are recorded

at market value and changes in market value are charged to financial income/(expenses) in the ap-

propriate reporting period. The fair value of exchange-listed financial instruments is based on available

stock exchange prices. If a financial instrument is not traded on an activemarket, alternative valuation

methods are used based on recent transactions between willing and independent third parties or

discounted cash flow analysis or similar.

Following initial recognition, held-to-maturity financial investments are recorded at their amor-

tized cost value using the effective interest method (amortized costs). Interest is recognized in the

profit or loss as part of other income. Following initial recognition, available-for-sale financial invest-

ments are recognized at fair market value and changes in value are charged to equity. If there is objec-

tive evidence that such a financial asset is impaired the cumulative loss – measured as the difference

between the acquisition cost and the current fair value, less any impairment loss on that financial

asset previously recognized in profit or loss – is removed from equity and recognized in profit or loss.

Dividends on available-for-sale equity instruments are recognized in the profit or loss as part of other

income when the Group’s right to receive payments is established.

1.8 Inventories and work in progress

Inventories are stated at the lower of purchase costs/manufacturing costs or net realizable

value. Net realizable value is the estimated selling price in the normal course of business, less esti-

mated costs of completion and the estimated costs necessary to make the sale. Manufacturing costs

include direct material and production costs as well as material and production overheads. The costs

are determined using the weighted average method.

Value adjustments are made for obsolete and slow-moving items. Inventories held for the fulfill-

ment of long-term delivery commitments are valued according to the delivery commitment. Project

contracts are recognized according to the stage of completion of the contract (PoC method), and the

respective effect is recognized in the profit or loss. Customer prepayments are shown separately as a

liability. Provisions are made to cover all anticipated losses, as soon as these are identified.

1.9 Trade receivables

Trade receivables are carried at the invoiced amount less provision for doubtful debts. A provision

for doubtful debts is recognized when it becomes obvious that the originally invoiced amount is not

fully realizable. Significant financial difficulties of the debtor, probability that the debtor will enter

bankruptcy or financial reorganization, and default or delinquency in payments (more than 30 days

overdue) are considered indicators that the trade receivable is impaired. The amount of the provision

is determined by reference to the originally invoiced amount less the amount of the expected realiza-

tion. The carrying amount of the asset is reduced through the use of a provision account and the loss

is recorded in the profit or loss within marketing and distribution costs.

When a trade receivable is uncollectible, it is written off against the provision account for trade

receivables. Subsequent recoveries of amounts previously written off are credited against marketing

and distribution costs in the profit or loss.

1.10 Other current assets

Prepayments and accrued income are stated at cost or net realizable value.


1.11 Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-

term highly liquid investments with original maturities of three months or less, and bank overdrafts.

Bank overdrafts are shown within borrowings on the statement of financial position. Cash, which is

restricted for at least 12 months, is recognized as a financial asset.

1.12 Research and development costs

All research costs are charged immediately to profit or loss. Costs incurred on development pro-

jects (relating to the design and testing of new or improved products) are recognized as intangible

assets when the following criteria are fulfilled:

a) it is technically feasible to complete the intangible asset so that it will be available for use or sale

b) management intends to complete the intangible asset and use or sell it

c) there is an ability to use or sell the intangible asset

d) it can be demonstrated how the intangible asset will generate probable future economic benefits

e) adequate technical, financial and other resources to complete the development and to use or sell

the intangible asset are available

f) the expenditure attributable to the intangible asset during its development can be reliably mea-

sured

The capitalized assets are amortized on a straight-line basis over the estimated useful life of

the respective product. Development costs that cannot be capitalized are charged to profit or loss in

the period in which they occur. Property, plant and equipment used for research and development

activities are capitalized in the same way as other property, plant and equipment, and depreciated on

a straight-line basis over their useful lives.

1.13 Income taxes

Income taxes are recorded based on the period to which they properly relate. Deferred income

taxes are recorded in full using the liability method. Deferred income tax assets and liabilities arise on

temporary differences between carrying values of assets and liabilities for Group purposes and their

related tax values. These temporary differences arise mainly from depreciation on property, plant and

equipment, revaluation of certain non-current assets, retirement benefit obligations and tax loss

carry-forwards, and, in the case of acquisitions, the difference between the fair value of the net assets

acquired and their tax base. The tax rates and laws enacted or substantially enacted at the date of

that statement of financial position are used to determine deferred income tax. Deferred income tax

assets are recognized to the extent that it is probable that future taxable profits will be available

against which the temporary deductible differences can be offset.

Deferred income tax is recognized on temporary differences arising from investments in sub-

sidiaries, associates and joint ventures. Exceptions are temporary differences for which the timing of

the reversal of the temporary difference can be controlled by the Group and it is probable that the

temporary difference will not reverse in the foreseeable future.

1.14 Pension plans

Current and former employees are covered by various statutory retirement plans in their respec-

tive countries. Both defined benefit plans and defined contribution plans exist. For defined benefit

plans, the defined benefit obligation (DBO) is determined using the projected unit credit method.

Actuarial valuations are obtained annually. This method corresponds to the present value of the


expected future cash flows. The costs recognized in the profit or loss comprise the actuarially deter-

mined costs for the period less contributions made by employees. Actuarial gains and losses are

accounted for over the average remaining working period of the employees if these gains and losses

exceed the 10% corridor of the higher of retirement benefit liabilities and pension fund assets. Em-

ployer contribution reserves in special employer funds are taken into account. Past-service costs are

recognized immediately in profit or loss, unless the changes to the pension plan are conditional on the

employee remaining in service for a specified period of time (the vesting period). In this case, the

past-service costs are amortized on a straight-line basis over the vesting period. The contributions to

defined contribution pension plans are charged to the profit or loss in the period to which they relate.

Costs related to pension plans are, together with other personnel expenses, included in cost of goods

sold, costs for marketing and distribution, research and development and administration costs.

1.15 Provisions

Provisions are made when there is a present legal or constructive obligation as a result of a past

event, when it is probable that an outflow of resources will be required to settle the obligation, and

when a reliable estimate can be made of the amount of the obligation. If an outflow of resources to

settle an obligation is not probable, a contingent liability is disclosed. Provisions for product warranties

are made to the extent of the outflow of resources that can be expected to meet the obligation in full.

For costs that are expected to arise in connection with plant closures, the disposal of companies or

business units and restructuring, provisions are made at the time of the approval and announcement

of the planned measures. For onerous contracts, provisions are provided if the unavoidable costs of

meeting the obligation exceed the economic benefit to be received.

1.16 Borrowings

Liabilities are stated as being short-term if they are settled within 12 months or if there is no

unconditional right to extend the settlement to at least 12 months after the date of that statement

of financial position. Initial recognition is at fair value, net of transaction costs incurred. Valuation is

subsequently carried out at amortized cost value using the effective interest method.

1.17 Equity

Registered shares are classified as equity. Own shares and options to acquire own shares as

well as realized gains or losses stemming from disposals and costs relating to capital increases and

decreases are deducted from equity. Dividends are charged to equity in the period in which they are

approved.

1.18 Revenue

Revenue from sales and services to third parties is reported net. This includes the total value of

invoices for products and services sold, licensed or leased out. Trade rebates, sales tax or value-added

tax as well as credit notes for goods returned are deducted from revenue. Revenue from project con-

tracts is determined based on the stage of completion using the Percentage of Completion (PoC)

method if the stage of completion and expected outcome can be measured reliably. The respective

calculation is based on the costs incurred and the total costs to complete. If it is probable that the

contract costs will exceed the economic benefit, the potential loss is recognized in the profit or loss

regardless of the project progress.


1.19 Borrowing costs

Borrowing costs are charged to profit or loss as incurred.

1.20 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to

the chief operating decision-maker. The chief operating decision-maker, who is responsible for allo-

cating resources and assessing performance of the operating segments, has been identified as the

Chief Executive Officer (CEO) who makes strategic decisions.

1.21 Option plans

Ascom offers various employee option plans (stock option plans). The fair value of the employee

benefits as remuneration for the options received is booked as an expense. The total expense, which

is recorded over the entire vesting period, is based on the fair value of the options, with market con-

ditions taken into account. Conditions that are not market-related are included in the estimate of the

exercisable options. These estimates are assessed as of each date of statement of financial position

and recorded under personnel expenses, with the corresponding counter booking directly within

equity (equity-settled stock options) or liabilities (cash-settled stock options).

1.22 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the

lessor are classified as operating leases. Payments made under operating leases are charged to the

profit or loss on a straight-line basis over the period of the lease.

Leases in which a significant portion of the risks and rewards of ownership are transferred from

the lessor to the lessee are classified as finance leases. The leased assets are carried at acquisition

costs not higher than the minimal lease payments and depreciated along with other assets (see

note 1.5). The corresponding leasing obligations are shown as liabilities. Per period leasing installments

are distributed accordingly as either capital repayments or interest expenses.

1.23 Main sources of uncertainty with regard to estimates

Below we explain important forward-looking assumptions and other main sources of uncer-

tainty with regard to estimates, which could result in significant value adjustments in respect of assets

and liabilities carried on the statement of financial position in the coming financial year.

Goodwill is regarded as an intangible asset with an indefinite useful life that must be tested for

impairment at least once a year. For this purpose, it is necessary to estimate future cash flows from

the cash-generating unit to which the goodwill is allocated. Determining the present value of goodwill

requires an estimate of the expected future cash flows from the cash generating unit and the setting

of an appropriate discount rate for calculation of the present value of these cash flows. The estimates

of the cash flows are based on medium-term plans. The discount rate applied reflects the risk arising

in connection with the respective business activities. Further information on goodwill can be found

in note 5.

Intangible assets from acquisition are initially capitalized at their fair value due to a purchase

price allocation at acquisition date. The fair value is determined using the respective methods as

disclosed further in note 5. Future assessment of potential impairment of such intangible assets is

dependent on the achievement of the forecasted cash flows as used in the initial business plan.


In connection with recording revenue from project contracts it is necessary to reliably determine

the project progress and costs. The calculation is based on the ratio of the costs already incurred to

the estimated total contract costs. The contracts are analyzed and reassessed at least as of every date

of the statement of financial position. The PoC (percentage of completion) revenue in the period under

review amounted to CHF 78.3 million (previous year: CHF 91.3 million, note 11).

Ascom management regularly monitors the net future outflow of economic benefits related to

onerous lease contracts. In calculating the value of these provisions, net cash flows of forecasts with

a time horizon to 2015 are used and the planned costs are amortized with market related discount

rates. Management continuously updates the provisions for the likelihood of finding tenants for vacant

space in the foreseeable future. Further information on onerous contracts can be found in note 19.

Restructuring provisions are created in connection with the discontinuation or reorganization of

a line of business and the closure or relocation of business locations if there is a detailed formal plan

and the implications are known and communicated (note 19).

For defined benefit plans, the defined benefit obligation is determined using the Projected Unit

Credit Method. Actuarial valuations are obtained annually. This method corresponds to the present

value of the expected future cash flows. Actuarial assumptions are used in determining the cost of

funded retirement benefits. These actuarial assumptions, such as discount rate, expected return on

assets, future salary or pension increases and average life expectancy, are estimates and therefore

sources of uncertainty (note 18).

Income taxes: Ascom Group is subject to income tax in numerous jurisdictions. Significant judg-

ment is required in determining theworldwide provision for income taxes. There aremany transactions

and calculations for which the ultimate tax determination is uncertain during the ordinary course of

business. As of the date of that statement of financial position, there were non-capitalized tax loss

carry-forwards (note 6). As a result of future positive developments with regard to income, the pos-

sibility may arise that deferred income tax assets in connection with these tax loss carry-forwards are

capitalized at least in part.

1.24 Assets held for sale and discontinued operations

A group of assets is classified as held for sale if a sale is highly probable within one year. The

assets must be available for immediate sale in their present condition. A discontinued operation is a

substantial component that either has been disposed of or is classified as held for sale. Tangible and

intangible assets held for sale are measured at the lower of their carrying amount at the date of their

first recognition as held for sale and fair value less costs to sell. Such assets are no longer depreciated

or amortized systematically. A possible impairment is included in the profit or loss.

1.25 Definition of non-GAAP measures

Earnings before interest and income taxes (EBIT) is a subtotal which includes all operating income

and expenses before addition/deduction of financial income and expenses and income taxes.

Earnings before income taxes (EBT) as a subtotal which includes all operating income and

expenses as well as financial income and expenses before deduction of income taxes.


2. SIGNIFICANT TRANSACTIONS AND OPERATIONAL CHANGES

2.1 Acquisition of Comarco WTS

As of 6 January 2009, Ascom acquired the Wireless Testing Business (WTS) of Comarco based in

California for CHF 14.7million. The assets pertaining to the ComarcoWTS business have been transferred

to Ascom Network Testing Inc., based in Lake Forest, California, an American affiliate of Ascom Holding

Ltd. The transaction includes 48 employees. Comarco WTS became an integral part of Ascom´s newly

formed Network Testing Division. With the acquisition of Comarco WTS, the Mobile Test Solutions

Business further strengthens its leading position in the global market of mobile Quality of Service

(QoS) and stationary network testing after the acquisition of Argogroup in spring 2008. With this

acquisition, Ascom became a true global player for mobile and stationary testing with strong US and

European presence.

In accordance with IFRS 3.62, the acquisition of Comarco WTS was only provisionally recorded in

the interim report as of 30 June 2009. The balance sheet as of 31 December 2009 incorporates more

information concerning the purchase price allocation, within the context of the evaluation of the fair

values, which is disclosed in the following statement:

CHFm Book value Fair valueadjustments

Fair value

Property, plant and equipment 0.2 – 0.2

Goodwill – 11.0 11.0

Other intangible assets – 3.5 3.5

Non-current assets 0.2 14.5 14.7

Inventories and work in progress 1.9 – 1.9

Trade receivables 2.6 – 2.6

Current assets 4.5 – 4.5

Total assets 4.7 14.5 19.2

Current liabilities 4.5 – 4.5

Total liabilities 4.5 – 4.5

Total purchase price 14.7

Offset by

Cash 13.3

Directly attributable costs 1.4

Net cash outflow in the reporting period 14.7

ComarcoWTS contributed revenue of CHF 11.0million and a loss of CHF 1.2million since acquisition

date to the Group’s performance. The change in profit and revenue of Comarco WTS if the

acquisition date would have been 1 January 2009 is insignificant as the acquisition took place already

on 6 January 2009.

2.2 Acquisition of TEMS

As of 2 June 2009, Ascom acquired the network testing business TEMS of Ericsson for CHF 173.8

million. The deal consists of the acquisition of 100% of the shares of Sweden based TEMS Network

Testing AB (today Ascom Network Testing AB) together with assets pertaining to the TEMS business


by Ascom Network Testing Inc., based in Lake Forest, California. TEMS is a software company with a

global market leadership position in optimization solutions for mobile networks. TEMS has approxi-

mately 300 employees in 17 countries around the globe. Its principal locations are Skelleftea (Sweden),

and Reston, Virginia (USA). This acquisition represents an important strategic step for Ascom, creating

a globalmarket leader formobile network benchmarking and optimization. TEMS formed, with Ascom’s

Mobile Test Solutions (MTS), a new third division named “Network Testing”. This acquisition was a

logical next step, following the take-over of Argogroup in 2008 and Comarco WTS in 2009.

In accordance with IFRS 3.62, accounting of the acquisition is of a provisional nature as of

31 December 2009, since it could be assumed that, with respect to the purchase price allocation, further

information will become known concerning the market based valuation.

CHFm Book value Fair valueadjustments

Fair value

Property, plant and equipment 0.6 – 0.6

Goodwill – 122.4 122.4

Intangible assets – 72.1 72.1

Deferred income tax assets 0.5 (0.5) –

Non-current assets 1.1 194.0 195.1

Inventories and work in progress 2.9 – 2.9

Trade receivables 12.2 – 12.2

Other current assets 1.1 – 1.1

Cash and cash equivalents 7.1 – 7.1

Current assets 23.3 – 23.3

Total assets 24.4 194.0 218.4

Deferred income tax liabilities – 18.4 18.4

Current liabilities 26.2 – 26.2

Total liabilities 26.2 18.4 44.6

Total purchase price 173.8

Offset by

Cash 164.0

Directly attributable costs 9.8

Cash and cash equivalents acquired (7.1)

Net cash outflow in the reporting period 166.7

TEMS contributed revenue of CHF 62.6million and a profit of CHF 4.9million since acquisition date

to the Group’s performance. The disclosure of the impact on revenue and profit if the acquisition date

of TEMS would have taken place on the first day of the fiscal year would be impractical as the TEMS

business was fully integrated into Ericsson until the acquisition of Ascom.

2.3 Divestment of Ascom’s Scanning Receiver Business

As of 30 December 2009, Ascom sold its scanning receiver business for CHF 4.6 million to the US

Company PCTEL, Inc. This business was a small part of Comarco’s Wireless Test Solutions (WTS), a

business that Ascom acquired in January 2009. Under the agreement, PCTEL will continue to supply

both PCTEL and WTS scanning receivers to the newly formed Ascom Network Testing Division. The


purchase price consists of an initial cash payment of CHF 4.4million and two deferred payments (earn-

out) of CHF 0.1 million each. The deferred payments will be due if agreed sales targets for fiscal year

2010 respectively 2011 are met. As of 31 December 2009, it was expected that objectives would be

completely fulfilled, and the full amount of CHF 0.2million is therefore accounted for. The consideration

includes the acquisition of the assets and the assumption of warranty obligations by the buyer.

CHFm 30.12.2009

Inventories and work in progress 0.4

Total assets 0.4

Current liabilities 0.1

Total liabilities 0.1

Total net assets 0.3

Disposal of net assets (0.3)

Directly attributable costs (0.3)

Cash payment 4.4

Deferred payment 0.2

Net result included 4.0

2.4 Divestment of ZAO Letus

As of 31 December 2009, Ascom sold all of its shares (51%) of Russia based ZAO Letus for CHF 1

to former minority holder V.G. Mishenkov, who acted also as Managing Director of ZAO Letus. This

company was part of the Ascom’s Security Communication Division.

CHFm 31.12.2009

Trade receivables 0.1

Other current assets 0.2

Total net assets 0.3

Disposal of net assets (0.3)

Disposal of currency translation adjustments (0.1)

Cash payment –

Net result included (0.4)


3. RISK MANAGEMENT

3.1 Risk controlling using clearly defined management information systems

As an international company, Ascom is exposed to a variety of financial and non-financial risks

that are directly associatedwith the Group’s business operations. The Group’s risk exposure is addressed

in accordance with the principle of risk limitation. Our overall risk management is an integral part of

corporate management and the long-term corporate strategy, and it is correspondingly incorporated

in the framework of our business processes and procedures.

Ascom applies clearly defined management information and control systems to measure, moni-

tor and control the risks towhich it is exposed. Detailedmonthly reports are prepared. Ourmanagement

monitors the effectiveness and efficiency of our risk management activities and control systems at

regular intervals and proposes adjustments as and when required.

3.2 Operational risks

The Wireless Solutions, Network Testing and Security Communication divisions manage some

large and complex projects. Depending on the division, these projects can extend from several months

to as much as several years. Technical problems, unforeseen developments at project sites, problems

at the customer end, and a degree of dependence on our suppliers’ technological approaches constitute

the greatest risks in the project business. To minimize the risk of operational downtimes, quality

problems and the associated extra costs or contractual penalties, the divisions have defined specific

directives and procedures in cooperation with the Group. The bid process itself is governed by a list of

strictly defined responsibilities and provisions that cover commercial as well as legal aspects. It is the

policy of each division to require suppliers to agree with the fulfillment guarantees demanded by

customers. Subject to certain limits, exclusions or co-payments, Ascom is also insured against the

financial consequences of such guarantees in the event of damage claims. Moreover, consistent imple-

mentation of a clearly defined procedure ensures regular reviews of the individual project steps as well

as the financial and legal requirements in respect of ongoing projects.

The continuing loyalty of our customers is dependent on the compliance of our security solutions

with high quality standards and security regulations. New developments are therefore subjected to

comprehensive security tests. Operating reliability is ensured by our maintenance organizations on

the basis of customer-specific Service Level Agreements governing maintenance and operation, and

through standardized processes at the individual division level. This is further supported through the

continued training of our employees in accordance with international guidelines such as the Inter-

national Project Management Association (IPMA) and the IT Infrastructure Library (ITIL).

3.3 Supplier-related risks

Our secure communication solutions are also dependent on external suppliers. This involves risks

concerning unexpected difficulties in delivery or unforeseeable price rises as a result of changes in

market conditions or currency effects. We aim to minimize these risks by way of comprehensive con-

tractual regulations with our suppliers. However, the boundaries set for the Ascom divisions vary

depending on the market position of their suppliers. The divisions therefore endeavor to develop

vendor-independent solutions and, wherever possible, to enter into long-term delivery agreements.

3.4 Employee-related risks

In the areas in which Ascom is active, there is intensive competition for well-qualified technical

andmanagement staff with the technological andmarket-specific skills that are key for Ascom. Skilled

employees are extremely important for the value-added development of our Group. We therefore


strive to recruit well-trained employees, to ensure they are integrated optimally, and to foster a long-

term working relationship. We offer our employees not only attractive conditions of employment, but

also opportunities for targeted further training and education. Another top priority is the provision of

high-quality apprentice training schemes in our various business areas.

3.5 Capital risks

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue

as a going concern in order to provide returns for the shareholders and benefits for other stakeholders

and to maintain an optimal capital structure to reduce the cost of capital.

In order tomaintain or adjust the capital structure, the Groupmay adjust the amount of dividends

paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital on the basis of the following parameters shown below:

CHFm 31.12.2009 31.12.2008

Interest bearing debt 100.2 –

EBITDA 49.8 53.3

Debt ratio 2.0 –


Total equity 179.3 148.7

Equity ratio 29.4 % 33.0 %

The Group is targeted on an debt ratio between 2.0 and 2.5 and an equity ratio between 30%

and 40%.

3.6 Other risks

Our innovative and competitive strengths are consolidated and expanded on the one hand

through organic growth, and on the other through targeted acquisitions. Our Group’s business port-

folio therefore changes over time through the sale of parts of the company, acquisitions of new com-

panies and strategic alliances. The potential risks in this regard arise from changing market, competi-

tion or company developments that can delay or even prevent the conclusion of negotiations to sell

or acquire companies. We counter these risks by defining clear processes and high standards, which

we apply to every transaction.

3.7 Financial risks

Financial risk management (cash management, procurement of loans and advances, hedging of

interest rate risks, foreign exchange risks, market risks and credit risks) is carried out centrally by Group

Treasury and is ensured by the relevant written principles and guidelines laid down by the manage-

ment and approved by the Board of Directors. The Group has written policies in place to cover spe-

cific risk areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial

instruments and management of (excess) liquidity. Group Treasury identifies, evaluates and selec-

tively hedges certain financial risks in close co-operation with the Group’s operating units/divisions.

Group companies submit monthly reports on loans and cash positions.

Financial risks comprise liquidity risk, market risk and credit risk:


a) Liquidity risks

Forward-looking and prudent liquidity risk management implies maintaining sufficient cash and

marketable securities as well as the ability to draw on committed credit lines. In general, the liquidity

status is monitored by Group Treasury on a weekly basis. In addition, bottom-up 12 month rolling

liquidity- and reserve forecasts are prepared on a monthly basis (undrawn credit facilities and cash

and cash equivalents on the basis of expected cash flows).

An analysis of the Group’s financial liabilities into the relevant maturity groupings, based on the

remaining period at the date of that statement of financial position to the contractual maturity date,

is set out below. Contractual commitments in relation to financial guarantees are further disclosed

in note 33.

CHFmAt 31.12.2009

Less than12 months

Between1 and 5 years

Over5 years

Total 1

Borrowings 25.1 75.1 – 100.2

Other financial liabilities 209.5 15.3 – 224.8

Total 234.6 90.4 – 325.0

CHFmAt 31.12.2008

Less than12 months


Over5 years

Total 1

Borrowings – – – –

Other financial liabilities 187.8 11.9 – 199.7

Total 187.8 11.9 – 199.7

1 The amounts in the table are contractual undiscounted cash flows and these amounts will therefore not reconcile with the amounts

disclosed on the statement of financial position. Balances due within 12 months equal their carrying balance as the impact of discounting

is not significant.

An analysis of the Group’s derivative financial instruments which will be settled on a gross basis

into the relevant maturity groupings, based on the remaining period at the date of that statement of

financial position to the contractual maturity date is set out below:

CHFmAt 31.12.2009

Less than3 months

Between3 and 12 months


Over5 years

Total

Forward foreign exchange contracts – outflow 3.7 4.2 1.1 – 9.0

Forward foreign exchange contracts – inflow 1.6 3.1 1.1 – 5.8

CHFmAt 31.12.2008

Less than3 months

Between3 and 12 months


Over5 years

Total

Forward foreign exchange contracts – outflow 25.9 39.6 3.2 – 68.7

Forward foreign exchange contracts – inflow 20.7 25.5 – – 46.2

b) Market risks

Market risks include foreign currency risk, fair value interest rate risk, cash flow interest rate risk

and price risk. Changes in the market values of financial assets, liabilities or financial instruments can

affect the Group’s asset and income situation. It is not part of the Ascom investment policy to invest

amounts in financial assets outside its operational activities. Apart from interest rate and foreign cur-

rency risks, the Group is not exposed to any other significant financial market risks.


Foreign currency risks

Due to the global nature of its activities, the Group is exposed to foreign exchange risks. Foreign

exchange risks are continuously monitored and the necessary measures are taken as and when re-

quired, to hedge against impairment of valuewith respect to transactions and assets. Foreign exchange

gains or losses arise from future commercial transactions as well as financial assets and liabilities

denominated in foreign currencies (mainly EUR, USD, SEK and GBP) if these are not the entity’s func-

tional currency and are affected by exchange rate fluctuations.

Management has set up a policy to require Group companies to manage their foreign exchange

risk against their functional currency. Foreign currency forward contracts are used to economically

hedge against transaction risks from future operational activities at the closing date of the respective

business. To this end, the group companies are required to economically hedge their entire foreign

exchange risk exposure with Group Treasury. The Group’s treasury risk management policy is to eco-

nomically hedge 100% of the anticipated cash flows of all booked transaction exposures in each major

foreign currency. Corresponding economic hedge transactions are stated at market value.

The Group has certain investments in foreign operations whose net assets are exposed to foreign

currency translation risk. The Group’s treasury policy states that these types of translation risks are

in general not hedged.

The currency risk at year end is shown on the following table:

CHFm 31.12.2009 31.12.2009 31.12.2008 31.12.2008

reasonableshift

impacton net result

reasonableshift

impacton net result

EUR/CHF +/- 6% +/- 0.7 +/- 10% +/- 1.1

GBP/CHF +/- 10% +/- 0.3 +/- 10% +/- 0.3

SEK/CHF +/- 10% +/- 0.5 +/- 10% +/- 0.4

USD/CHF +/- 10% +/- 3.4 +/- 10% +/- 1.7

The changes are mainly due to gains and losses on exchange rates on cash, trade receivables,

liabilities and forward foreign exchange contracts.

Interest rate risks

As the Group has no significant interest-bearing assets apart from temporary cash surpluses, the

Group’s income and operating cash flows from interest-bearing assets are substantially independent

of changes in market interest rates.

In 2009 the Group entered into a long-term credit facility agreement over CHF 120 million with a

bank consortium of eight Swiss banks. The credit facility has to be repaid in stages over the period

ending 31 December 2012. The credit facility was issued at variable interest rates. Other borrowings

issued at fixed rates expose the Group to fair value interest rate risk.

Changes in interest rates can impact the market value of the Group’s financial assets and liabili-

ties. The Group is financing its long-term issuable facility line in short-term intervals. As the Group has

substantial cash surpluses, changes in interest rates are eliminated.


c) Credit risks

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits

with banks and financial institutions, as well as credit exposure to customers, including outstanding

receivables and committed transactions. Credit risks may result in a financial loss if one party in a

transaction is unable or unwilling to discharge its obligations. Credit risk is managed by Group entities

and on divisional level for credits arising from goods delivered and services rendered. It is Group policy

that all banks and financial institutions have to fulfill aminimum credit rating of “A”. Credit worthiness

of key customers is measured by using independent ratings; otherwise risk control assesses the credit

quality of individual customers by taking into account their financial position, past experience and

other factors. The utilization of credit limits is monitored by Group entities at local level.

The table below sets out the Group’s six major counterparties at the date of that statement of

financial position, which excludes customers for which the credit risk is mitigated by way of customer

prepayments:

CHFm Rating1 Balance31.12.2009

Balance31.12.2008

Counterparty (Financial institution)

Bank A A+ 55.9 51.5

Bank B A+ 20.2 50.2

Bank C AA- 11.9 –

Bank D A- – 40.0


Counterparty (Customer)

Multinational telecom supplier BBB+ 12.0

Multinational provider of communication services AA- 2.4

Multinational provider of wireless services A- 2.1


Counterparty (Customer)

Primary wireless OEM BBB+ 2.5

Multinational, privately held telecom supplier n/a 4.0

Governmental organization n/a 3.1

1 Long-term credit rating Standard & Poor’s or Fitch.

The number of customers and their geographical distribution minimizes the risk of clustering.

No credit limits of funds invested by the Group at financial institutions were exceeded during the

reporting period and management does not expect any losses from non-performance by these

counterparties.


3.8 Fair value estimation

Effective 1 January 2009, the Group adopted the amendment to IFRS 7 for financial instruments

that are measured in the statement of financial position at fair value. This requires disclosure of fair

value measurements by level of the following fair value measurement hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset

or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (that is,

unobservable inputs).

The following table presents the Group’s assets and liabilities that are measured at fair value

at 31 December 2009:

CHFm Based on quotedprices in active

markets (level 1)

Based on otherobservable inputs

(level 2)

Based on unob-servable inputs

(level 3)

Total

Assets

Available for sale financial assets – – 0.9 0.9

Financial assets at fair value through profit or loss 0.5 – – 0.5

Balance at 31.12.2009 0.5 – 0.9 1.4

Liabilities

Financial liabilities at fair value through profit or loss – 0.3 – 0.3

Balance at 31.12.2009 – 0.3 – 0.3

The fair value of financial instruments traded in active markets is based on quoted market prices

at the date of that statement of financial position. A market is regarded as active if quoted prices are

readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or

regulatory agency, and those prices represent actual and regularly occurring market transactions on

an arm’s length basis. The quoted market price used for financial assets held by the Group is the

current bid price. These instruments are included in level 1. Instruments included in level 1 comprise

primarily FTSE 100 equity investments classified as financial assets held for trading purposes.

The fair value of financial instruments that are not traded in an activemarket (for example, over-

the-counter derivatives) is determined by using valuation techniques. These valuation techniques

maximize the use of observable market data where it is available and rely as little as possible on

entity specific estimates. If all significant inputs required to fair value an instrument are observable,

the instrument is included in level 2. Forward exchange contracts are allocated to this level.

If one or more of the significant inputs is not based on observable market data, the instrument

is included in level 3. These inputs reflect the Group’s own assumptions about market pricing using the

best internal and external information available. Investments in third parties for which the fair value

of the market prices cannot be reliably determined are allocated to this level.


4. PROPERTY, PLANT AND EQUIPMENT

CHFm Land andbuildings

Other property,plant and

equipment

Equipment underconstruction and

prepayments

Total

Acquisition costs

Balance at 1.1.2008 40.5 114.4 1.2 156.1

Additions 0.4 3.3 3.0 6.7

Disposals – (7.8) – (7.8)

Acquisition of a subsidiary or business – 0.9 – 0.9

Divestment of a subsidiary or business (0.3) (0.6) – (0.9)

Reclassifications – 1.9 (2.6) (0.7)

Currency translation adjustments (4.0) (17.5) (0.3) (21.8)

Balance at 31.12.2008 36.6 94.6 1.3 132.5

Additions 1.4 2.8 2.2 6.4

Disposals (0.4) (8.3) (0.2) (8.9)

Acquisition of a subsidiary or business 0.1 0.8 – 0.9

Formerly classified as assets held for sale 8.8 0.2 – 9.0

Reclassifications – 1.1 (1.1) –

Currency translation adjustments 0.3 2.8 0.1 3.2

Balance at 31.12.2009 46.8 94.0 2.3 143.1

Accumulated depreciation and impairment

Balance at 1.1.2008 23.9 95.0 – 118.9

Additions 1.0 6.2 – 7.2

Disposals – (6.8) – (6.8)

Acquisition of a subsidiary or business 0.1 0.8 – 0.9

Divestment of a subsidiary or business (0.3) 0.3 – –

Currency translation adjustments (2.3) (14.3) – (16.6)

Balance at 31.12.2008 22.4 81.2 – 103.6

Additions 0.8 6.3 – 7.1

Disposals (0.1) (8.2) – (8.3)

Formerly classified as assets held for sale 8.8 0.2 – 9.0

Reclassifications (0.2) 0.2 – –

Currency translation adjustments 0.1 2.5 – 2.6

Balance at 31.12.2009 31.8 82.2 – 114.0

Net book value at 31.12.2008 14.2 13.4 1.3 28.9

Net book value at 31.12.2009 15.0 11.8 2.3 29.1

At the date of that statement of financial position, the book value of leased assets included in

property, plant and equipment amounts to CHF 0.2 million (previous year: nil). The fire insurance

value of property, plant and equipment at 31 December 2009 is CHF 160million (previous year: CHF 170

million). As at 31 December 2009, there were contractual commitments for acquisition of property,

plant and equipment of CHF 0.3 million (previous year: nil).


5. INTANGIBLE ASSETS

CHFm Goodwill LicensesIntangible assetsfrom acquisition

Other Total

Acquisition costs

Balance at 1.1.2008 12.6 13.3 – 52.6 78.5

Additions – – – 5.0 5.0

Disposals – (1.8) – (1.0) (2.8)

Acquisition of a subsidiary or business 16.8 – – – 16.8

Divestment of a subsidiary or business – – – (0.9) (0.9)

Reclassifications – – – 0.7 0.7

Currency translation adjustments (5.5) (1.2) – (11.3) (18.0)

Balance at 31.12.2008 23.9 10.3 – 45.1 79.3

Additions – 0.3 – 2.7 3.0

Disposals – – – (3.6) (3.6)

Acquisition of a subsidiary or business 133.4 – 75.6 – 209.0

Formerly classified as assets held for sale – 1.8 – 4.9 6.7

Currency translation adjustments 3.7 0.1 1.9 2.2 7.9

Balance at 31.12.2009 161.0 12.5 77.5 51.3 302.3

Accumulated amortization and impairment

Balance at 1.1.2008 – 13.0 – 48.5 61.5

Additions – 0.1 – 1.3 1.4

Disposals – (1.8) – (1.0) (2.8)

Divestment of a subsidiary or business – – – (0.9) (0.9)

Currency translation adjustments – (1.2) – (9.8) (11.0)

Balance at 31.12.2008 – 10.1 – 38.1 48.2

Additions – 0.2 7.9 1.8 9.9

Disposals – – – (3.5) (3.5)

Formerly classified as assets held for sale – 1.8 – 4.9 6.7

Currency translation adjustments – 0.1 0.1 2.0 2.2

Balance at 31.12.2009 – 12.2 8.0 43.3 63.5

Net book value at 31.12.2008 23.9 0.2 – 7.0 31.1

Net book value at 31.12.2009 161.0 0.3 69.5 8.0 238.8

As at 31 December 2009, there were no contractual commitments for acquisition of intangible

assets (previous year: CHF 0.1 million).


Goodwill is allocated to the Group’s cash-generating units (CGU) as shown in the table below:

CHFm 31.12.2009 31.12.2008

Wireless Solutions 11.0 10.6

Network Testing1 150.0 13.3

Total 161.0 23.9

1Consisted of Mobil Test Solutions (MTS) as part of the Telecom Solutions business in previous year.

The recoverable amount of a CGU is determined based on value-in-use calculations. These calcu-

lations use pre-tax cash flow projections based on financial budgets approved by the management

covering a four-year period. Cash flows beyond the four-year period are extrapolated using a 1.5%

growth rate. The basis for the cash flow estimates is the result before interest and income taxes (EBIT).

The discount rate applied is based on a risk-free 10-year bond adjusted for risk. The following assump-

tions based on experience are applied:

2009 2008

Growth rate

- Wireless Solutions 6% – 8% 5% – 7.5%

- Network Testing1 3% – 5% 6% – 8%

EBIT margin

- Wireless Solutions 7% – 12% 12% – 14%

- Network Testing1 7% – 11% 13% – 16%

Discount rate

- Wireless Solutions 10.8% 10%

- Network Testing1 10.8% 10%

1Consisted of Mobil Test Solutions (MTS) as part of the Telecom Solutions business in previous year.

Based on these calculations there is no need for impairment. Regarding the sensitivity of changes

to underlying assumptions used, Ascom Group showed that even a possible change in the discount

rate up to 13% would still not result in an impairment of goodwill, neither in Wireless Solutions nor in

Network Testing. Also a reduction in EBIT margin assumption of 2% would not lead to an impairment

of goodwill. The total amount of goodwill expected to be deductible for income tax at the date of that

statement of financial position is CHF 19.4 million (previous year: nil).

Intangible assets from acquisition consistmainly of customer relations (CHF 33.6million), technol-

ogy (CHF 27.4 million) and trademarks (CHF 6.8 million). Customer relations were capitalized the first

time at 6 January 2009 respectively 2 June 2009 using the excess earning method for valuation of the

existing customers at acquisition date of Comarco WTS respectively TEMS. Customer relations are

amortized over their estimated useful life of 10 years, using the straight-line method. Technology and

trademarks were capitalized the first time at 6 January 2009 respectively 2 June 2009 using the roy-

alty rate method for valuation of the trademark “TEMS” and the acquired technology “Air Interface

Monitoring” and “US cdma”. Technology is amortized over the estimated useful life of 7 years, the

trademark is amortized over the estimated useful life of 5 years, using the straight-line method.


Amortization of intangible assets from acquisition of CHF 7.9 million (previous year: nil) shown

as separate line item in the statement of comprehensive income exclusively includes amortization and

impairment of intangible assets initially capitalized due to a purchase price allocation at acquisition

date. Taking into account the cost of sales method this line item could be reassigned as follows: CHF

5.3 million to marketing and distribution as well as CHF 2.6 million to research and development.

Other intangible assets include mainly software. Following a reassessment of the remaining

expected life and expected future economic benefits to be generated by other intangible assets, there

was no need to impair intangible assets during the period under review (previous year: nil).

6. DEFERRED INCOME TAX

CHFm Deferred incometax assets

Deferred incometax liabilities

Net value

Balance at 1.1.2008 3.7 (3.1) 0.6

Additions 0.1 (1.2) (1.1)

Reversal (0.6) 0.4 (0.2)

Acquisition/(divestment) of a subsidiary or business (0.2) – (0.2)

Currency translation adjustments (0.6) 0.8 0.2

Balance at 31.12.2008 2.4 (3.1) (0.7)

Additions 2.1 (1.5) 0.6

Reversal (0.3) 2.7 2.4

Acquisition/(divestment) of a subsidiary or business – (18.4) (18.4)

Currency translation adjustments 0.1 (0.6) (0.5)

Balance at 31.12.2009 4.3 (20.9) (16.6)

Estimated reversal within 12 months – (2.6) (2.6)

Estimated reversal later 4.3 (18.3) (14.0)

Deferred income tax assets result from tax loss carry-forwards as well as valuation differences

of assets and liabilities. They are recognized to the extent that realization through the future taxable

profits is probable.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to

offset current income tax assets against current income tax liabilities and when the deferred income

taxes relate to the same tax authority. In 2009 deferred income tax liabilities in the amount of CHF 1.1

million (previous year: CHF 0.1 million) have been offset with deferred income tax assets.

The deferred income tax liabilities pertain to the following line items of the statement of financial

position:


CHFm 31.12.2009 31.12.2008

Property, plant and equipment 1.6 1.0

Intangible assets 18.0 1.3

Current assets 1.3 0.2

Liabilities – 0.6

Total 20.9 3.1

The deferred income tax assets pertain to the following line items of the statement of financial

position:

CHFm 31.12.2009 31.12.2008

Property, plant and equipment 0.5 0.7

Current assets 0.3 –

Tax loss carry-forwards 1.1 1.0

Liabilities 2.4 0.7

Total 4.3 2.4

Tax loss carry-forwards which are not capitalized amount to CHF 503.1 million (previous year: CHF

940.5 million) and expire in the following years:

CHFm 31.12.2009 31.12.2008

2010 (2009) 116.2 335.6

2011 (2010) 22.4 116.0

2012 (2011) 0.8 22.7

2013 (2012) 0.4 0.7

2014 (2013) 52.0 0.1

2015 (2014) 10.5 49.8

2016 (2015) 17.6 23.4

Later 283.2 392.2

7. FINANCIAL ASSETS (NON-CURRENT)

CHFm 31.12.2009 31.12.2008

Investments in third parties 0.9 1.0

Loans and other financial investments 4.6 10.6

Total 5.5 11.6

Investments in third parties are available for sale and valued at fair value. Holdings in equity for

which the fair value of the market prices cannot be reliably determined are shown in the statement

of financial position at acquisition cost. This refers to the stake in CSEM AG, Neuenburg. Loans and

other financial investments primarily comprise loans in connection with the sale of real estate and

divestment of a business in previous years.


8.a) FINANCIAL INSTRUMENTS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

CHFm Note Assets at fairvalue throughprofit or loss

Loans andreceivables

Available for salefinancial assets

Total 1

Assets in the statement of financial position

Financial assets (non-current) 7 – 4.6 0.9 5.5

Trade and other receivables – 126.4 – 126.4

Financial assets held for trading purposes 12 0.5 – – 0.5

Cash and cash equivalents 13 – 127.7 – 127.7

Other financial assets 11 – 3.5 – 3.5

Balance at 31.12.2009 0.5 262.2 0.9 263.6

1The Group had no held-to-maturity investments at the date of that statement of financial position.

CHFm Note Liabilities at fairvalue throughprofit or loss

Other financialliabilities at

amortized cost

Total

Liabilities in the statement of financial position

Borrowings 17 – 100.2 100.2

Trade payables – 29.9 29.9

Derivative financial instruments 32 0.3 – 0.3

Other financial liabilities – 224.5 224.5

Balance at 31.12.2009 0.3 354.6 354.9

CHFm Note Assets at fairvalue throughprofit or loss

Loans andreceivables

Available for salefinancial assets

Total 1

Assets in the statement of financial position

Financial assets (non-current) 7 – 10.6 1.0 11.6

Trade and other receivables – 86.2 – 86.2

Financial assets held for trading purposes 12 0.5 – – 0.5

Cash and cash equivalents 13 – 182.6 – 182.6

Derivative financial instruments 32 1.7 – – 1.7

Other financial assets 11 – 2.5 – 2.5

Balance at 31.12.2008 2.2 281.9 1.0 285.1

1The Group had no held-to-maturity investments at the date of that statement of financial position.


CHFm Note Liabilities at fairvalue throughprofit or loss

Other financialliabilities at

amortized cost

Total

Liabilities in the statement of financial position

Borrowings 17 – – –

Trade payables – 27.1 27.1

Derivative financial instruments 32 4.2 – 4.2

Other financial liabilities – 195.5 195.5

Balance at 31.12.2008 4.2 222.6 226.8

8.b) CREDIT QUALITY OF FINANCIAL ASSETS

The credit quality of financial assets that are neither past due nor impaired at the date of that

statement of financial position can be assessed by reference to external credit ratings, if available, or

to historical information about counterparty default rates:

CHFm 31.12.2009 31.12.2008

Cash in bank and current bank deposits1

Financial institutions with “A” or better ratings 126.8 181.8

Financial institutions without official ratings, but approvedby Group Treasury

0.6 0.3

Total 127.4 182.1

1 The remainder of the line item “cash and cash equivalents” is cash in hand as well as national giro (post) accounts.

CHFm 31.12.2009 31.12.2008

Derivative financial (liabilities)/assets

Forward foreign exchange contracts with financial institutionswith “A” or better ratings

(0.3) (2.5)

Total (0.3) (2.5)

The Groupmonitors the credit worthiness of its key customers by using independent ratings and

by taking into account their financial position, past experience and other factors at subsidiary level.

Each division has its own policy in place to manage the quality of trade receivables.

9. INVENTORIES AND WORK IN PROGRESS

CHFm 31.12.2009 31.12.2008

Raw materials and components 8.8 8.6

Work in progress and customer-specific contracts 16.6 17.0

Finished goods and goods for resale 21.9 23.0

Total 47.3 48.6

Customer prepayments are recorded under other liabilities. Project contracts valued using the

PoC method are included under prepaid expenses (note 11). The above figures are after value adjust-

ments amounting to CHF 13.0 million as of 31 December 2009 (previous year: CHF 15.8 million).


10. TRADE RECEIVABLES

CHFm 31.12.2009 31.12.2008

Receivables from third parties 112.0 86.2

Less provision for doubtful debts (3.8) (2.5)

Total 108.2 83.7

The fair value of trade receivables equals the carrying amounts at year-end. The maximum

exposure to credit risk at the reporting date is the fair value of trade receivables. As of 31 December

2009, trade receivables of CHF 108.2 million (previous year: CHF 83.7 million) were fully performing.

Trade receivables that are less than three months past due are not considered impaired. These

relate to a number of independent customers for whom there is no recent history of default. The age

analysis for these trade receivables is as follows:

CHFm 31.12.2009 31.12.2008

Current/past due, not more than 30 days 95.2 78.2

Past due, up to 3 months 9.0 4.4

Past due, up to 12 months 4.0 1.1

Past due, more than 12 months – –

Total 108.2 83.7

Movements on the Group’s provision for doubtful debts are as follows:

CHFm 2009 2008

Balance at 1.1. 2.5 2.0

Additions 1.8 2.1

Receivables written off during the year as uncollectible (0.3) (0.1)

Release of unused amounts (1.3) (1.2)

Acquisition of a subsidiary or business 0.5 0.1

Formerly classified as assets held for sale 0.6 –

Currency translation adjustments – (0.4)

Balance at 31.12. 3.8 2.5

As of 31 December 2009, trade receivables of CHF 3.8 million (previous year: CHF 2.5 million) were

impaired and provided for. Individually impaired receivables relate to customers which are in unexpect-

edly difficult economic situations. It was assessed that a portion of the receivables is expected to be

recovered.


Valuation adjustments in the amount of CHF 0.5 million net (previous year: CHF 1.2 million net

were recorded in the profit or loss of the reporting year. Additions and release of provision for doubt-

ful debts have been included in marketing and distribution costs. Amounts charged to the provision

account are generally written off when there is no expectation of recovering additional cash. The Group

does not hold any collateral as security for trade receivables.

The carrying amounts of the Group’s trade receivables are denominated in the following cur-

rencies:

CHFm 31.12.2009 31.12.2008

Currency

Euro 43.2 40.6

US dollar 36.6 6.6

Swiss franc 15.9 24.1

Swedish krona 8.5 2.4

UK pound 2.8 2.4

Other currencies 5.0 12.5

Total 112.0 86.2

11. OTHER CURRENT AND NON-CURRENT ASSETS

CHFm 31.12.2009 31.12.2008

Other receivables 18.2 11.3

Prepayments for goods 0.8 6.0

Accrued income 25.3 38.5

Finance leases 3.5 2.5

Total 47.8 58.3

Less non-current portion of finance leases (2.7) (2.0)

Total current portion 45.1 56.3

Other receivables include recoverable withholding tax and value added tax totaling CHF 0.9 mil-

lion (previous year: CHF 2.0 million). The other current assets do not contain any classes of impaired

assets. Besides other items, accrued income includes accrued revenues from project contracts valued

using the PoC method. The Group does not hold any collateral as security for other current assets.


The key data in connection with project contracts valued using the PoC method are as follows:

CHFm 31.12.2009 31.12.2008

Total revenue from project contracts 78.3 91.3

Accumulated costs 126.8 141.0

Profit share 45.1 37.5

Accumulated contract costs incl. recognized profits 171.9 178.5

Progress billings (210.4) (188.6)

Total (deferred)/accrued revenues valued using PoC method (38.5) (10.1)

Accrued costs in connection with PoC contracts 1 53.3 34.8

1Refer to note 20.

A reconciliation of the finance lease assets is as follows:

CHFm Due within12 months

Due after12 months, butbefore 5 years

Due after5 years

Total31.12.2009

Gross investment in leases 1.0 2.8 0.6 4.4

Unearned finance income (0.3) (0.6) – (0.9)

Present value of minimum leasepayments

0.7 2.2 0.6 3.5

CHFm Due within12 months

Due after12 months, butbefore 5 years

Due after5 years

Total31.12.2008

Gross investment in leases 0.6 1.9 0.3 2.8

Unearned finance income (0.1) (0.2) – (0.3)

Present value of minimum leasepayments

0.5 1.7 0.3 2.5


12. FINANCIAL ASSETS HELD FOR TRADING PURPOSES

This position comprises moneymarket funds. This is available without restrictions and is held for

trading purposes.

13. CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash on hand, post office and bank account balances, as well

as money market instruments with original maturities of less than 3 months and are valued at face

value. Their availability is as follows:

CHFm 31.12.2009 31.12.2008

Available without restrictions 126.5 182.6

Restricted 1.2 –

Total cash and cash equivalents 127.7 182.6

The average interest rate on cash and cash equivalents in the year under review was 0.2% (pre-

vious year: 3%).

14. PLEDGES

As per 25 May 2009, the Group entered into a long-term credit facility agreement over CHF 120

million with a bank consortium of eight Swiss banks. The credit facility has to be repaid in stages over

the period ending 31 December 2012. As of 31 December 2009, all shares of Ascom (Sweden) Holding

AB and AscomNetwork Testing ABwere pledged to secure thementioned credit facility (previous year:

nil).

15. SHARE CAPITAL AND OWN SHARES

Composition of share capital

CHFmNumber

31.12.2009Amount

31.12.2009Number

31.12.2008Amount

31.12.2008

Registered shares nom. CHF 0.50 36,000,000 18.0 36,000,000 18.0

Number of registered shareholders 6,436 6,832

The total authorized number of ordinary shares is 36,000,000 of which 34,716,067 (previous year:

34,790,411) are outstanding. Each share grants the owner one vote at the annual general meeting of

the shareholders. All shares issued by the company were fully paid in.


Own shares

CHFm Number 2009 Amount 2009 Number 2008 Amount 2008

Balance at 1.1. 1,209,589 13.2 580,800 7.1

Additions 79,344 0.8 632,789 6.2

Disposals (5,000) (0.1) (4,000) (0.1)

Balance at 31.12. 1,283,933 13.9 1,209,589 13.2

During 2009, Ascom bought 79,344 registered shares to hedge the issuance of shares in conjunc-

tion with the exercise of options under the Ascom Stock Option Plan 2009. In previous year, Ascom

bought 632,789 registered shares to hedge the Ascom Stock Option Plan 2008. The holdings of own

shares stated under the changes in equity correspond to these registered shares.

16. MINORITY INTERESTS

CHFm 2009 2008

Balance at 1.1. 0.1 0.1

Loss (0.1) –

Balance at 31.12. – 0.1

At 31 December 2009, Ascom sold its 51% interest in Letus ZAO, St. Petersburg (also refer to

note 2), therefore all related minority interests were disposed of at the end of the year 2009.

17. BORROWINGS

As of 31 December 2009, the Group’s total credit facility comprised a cash line of CHF 106 million

and a guarantee line of CHF 66.9 million available from financial institutions and banks worldwide

(previous year: combined cash and guarantee line of total CHF 100 million). As of 31 December 2009,

Ascom did use the cash credit line as shown in the table below (previous year: not used).

CHFm Current portion Total31.12.2009 31.12.2008 31.12.2009 31.12.2008

Non-current loans from financial institutions and banks 25.0 – 100.1 –

Current loans from financial institutions and banks 0.1 – 0.1 –

Total 25.1 – 100.2 –

The total borrowings consist mainly of one single Swiss francs credit facility agreement over CHF

120 million with a bank consortium of eight Swiss banks at variable interest rates. The credit facility

has to be repaid in stages over the period ending 31 December 2012. This credit facility agreement

contains covenants.

The fair value of the borrowings is equal to the carrying amount.


18. RETIREMENT BENEFIT OBLIGATIONS

Ascom employees are covered by either a defined benefit plan or a defined contribution plan.

Significant defined benefit plans are subject to annual valuation by qualified actuaries. The latest

valuations took place on 31 December 2009 and 2008. The valuation methods used are described in

note 1.14. Unfunded plans exist primarily in the case of the German companies.

As per 1 January 2008, Ascom’s pension plans in Switzerland were restructured by merging the

Ascom Pensionskasse, the Ascom-Kadervorsorgestiftung and the Alpha-Vorsorgestiftung and chang-

ing the plan from a defined benefit to a defined contribution scheme according to Swiss pension law.

At the same time the affiliation agreements between the pension plan and non-Ascom companies

were amended. Under new affiliation agreements all risks related to active employees and pensioners

are transferred to the respective companies. Accordingly, defined benefit obligations of CHF 120million

and plan assets of CHF 118.1 million were derecognized in fiscal year 2008.

The amounts recognized in the statement of financial position are as follows:

CHFm Plans in Switzerland Other plans Total2009 2008 2009 2008 2009 2008

Present value of funded obligations (1,001.3) (973.1) (32.4) (28.4) (1,033.7) (1,001.5)

Fair value of plan assets 916.9 907.9 14.0 10.7 930.9 918.6

Funded status (84.4) (65.2) (18.4) (17.7) (102.8) (82.9)

Present value of unfunded obligations – – (4.6) (4.2) (4.6) (4.2)

Unrecognized actuarial losses/(gains) 84.8 65.2 7.6 8.6 92.4 73.8

Unrecognized plan assets – – – – – –

Unrecognized past service costs – – – – – –

Net asset/(liability) in the statement of financial position 0.4 – (15.4) (13.3) (15.0) (13.3)

Prepaid asset 0.4 – 0.5 0.5 0.9 0.5

Retirement benefit obligation – – (15.9) (13.8) (15.9) (13.8)

Total at 31.12. 0.4 – (15.4) (13.3) (15.0) (13.3)

The movement of the year in the defined benefit obligations is as follows:


Balance at 1.1. (973.1) (1,123.8) (32.6) (38.2) (1,005.7) (1,162.0)

Current service costs (3.7) (4.2) (1.3) (0.8) (5.0) (5.0)

Past service costs – (11.6) (0.5) – (0.5) (11.6)

Interest costs (33.1) (35.7) (1.6) (1.8) (34.7) (37.5)

Contributions by plan participants (4.2) (4.7) – – (4.2) (4.7)

Actuarial (losses)/gains (57.3) (18.2) 0.6 (4.6) (56.7) (22.8)

Benefits paid 70.1 69.7 1.3 1.4 71.4 71.1

Change in consolidation scope – 131.5 (0.9) 0.6 (0.9) 132.1

Curtailments and settlements – 23.9 – – – 23.9

Currency translation adjustments – – (2.0) 10.8 (2.0) 10.8

Balance at 31.12. (1,001.3) (973.1) (37.0) (32.6) (1,038.3) (1,005.7)


The movement of the year in the fair value of the defined benefit plan assets is as follows:


Balance at 1.1. 907.9 1,270.6 10.7 18.4 918.6 1,289.0

Expected return on plan assets 36.0 51.0 0.7 1.0 36.7 52.0

Actuarial (losses)/gains 37.7 (217.7) 1.0 (2.9) 38.7 (220.6)

Employer contributions1 1.2 0.5 0.3 0.1 1.5 0.6

Employee contributions 4.2 4.7 – – 4.2 4.7

Benefits paid (70.1) (69.7) (0.6) (0.6) (70.7) (70.3)

Change in consolidation scope – (131.5) 0.9 – 0.9 (131.5)

Currency translation adjustments – – 1.0 (5.3) 1.0 (5.3)

Balance at 31.12. 916.9 907.9 14.0 10.7 930.9 918.6

1Employer contributions are less than the employee contributions due to the company’s use of its contribution reserve.

The defined benefit plan assets are comprised as follows:


Cash 53.2 39.9 – – 53.2 39.9

Shares 350.3 301.4 4.7 3.8 355.0 305.2

Bonds 90.8 85.3 6.2 5.4 97.0 90.7

Mortgages 61.4 74.4 – – 61.4 74.4

Property 356.7 372.2 – – 356.7 372.2

Other 4.5 34.7 3.1 1.5 7.6 36.2

Balance at 31.12. 916.9 907.9 14.0 10.7 930.9 918.6

The pension costs recognized for defined benefit plans consist of:


Current service costs 3.7 4.2 1.3 0.8 5.0 5.0

Past service costs – 11.6 0.5 – 0.5 11.6

Interest cost 33.1 35.7 1.6 1.8 34.7 37.5

Expected return on plan assets (36.0) (51.0) (0.7) (1.0) (36.7) (52.0)

Net actuarial losses/(gains) recognized under IAS 19.58 – 127.1 0.3 – 0.3 127.1

Change unrecognized plan assets (IAS 19.58b limitation) – (103.2) – – – (103.2)

Curtailments and settlements – (23.9) – – – (23.9)

Expenses/(income) recognized 0.8 0.5 3.0 1.6 3.8 2.1

Of the total charge of CHF 3.8 million (previous year: CHF 2.1 million), CHF 0.7 million (previous

year: CHF 0.8 million) was included in cost of goods sold, CHF 0.3 million in administration expenses

(previous year: CHF 0.1 million), CHF 2.2 million in marketing and distribution and R&D expenses (pre-

vious year: CHF 0.4 million) and CHF 0.6 million in other cost categories (previous year: CHF 0.8 mil-

lion).


The principal actuarial assumptions used in determining the cost of funded retirement benefits

vary according to local conditions. The assumptions applied in the valuation of the significant plans in

Switzerland and abroad are as follows:

Plans in Switzerland Other plans2009 2008 2009 2008

Discount rate in % 3.00 3.50 3.50 – 5.80 3.00 – 6.50

Expected return on assets in % 4.13 4.50 3.75 – 6.23 3.50 – 5.92

Future salary increases in % 2.00 2.00 1.00 – 3.75 1.00 – 3.00

Future pension increases in % 1.00 1.00 2.00 – 3.80 1.75 – 3.35

Average life expectancy in years of someoneretiring at 62 for Switzerland and 65 for the otherplans at the date of the statement of financial posi-tions

– male 20.31 20.31 20.0 – 22.0 20.00 – 22.00

– female 23.60 23.60 24.0 24.00 – 25.00

Pension plan assets include buildings occupied by the Group with a fair value of CHF 6.2 million

at 31 December 2009 (previous year: CHF 8.0 million).

The actual gain on the pension fund capital was CHF 72.1 million (previous year: loss CHF 164.7

million). The expected return on plan assets is determined by considering the expected returns avail-

able on the assets underlying the current investment policy. Expected yields on fixed interest invest-

ments are based on gross redemption yields at the date of that statement of financial position. Ex-

pected returns on equity and property investments reflect long-term real rates of return in the respec-

tive markets.

The expected contributions to post-employment benefits for the year ending 31 December 2010

are CHF 4.9 million.

For the Swiss pension plan the experience adjustments are as follows:

CHFm 2009 2008 2007 2006 2005

Fair value of plan assets 916.9 907.9 1,270.6 1,275.2 1,238.2

Present value of defined benefit obligation (1,001.3) (973.1) (1,123.8) (1,183.6) (1,201.7)

Funded status (84.4) (65.2) 146.8 91.6 36.5

Experience adjustments on plan liabilities (13.0) (6.7) 13.6 (15.5) (29.0)

Change in assumptions adjustment on plan liabilities (44.3) (11.5) 29.9 – (92.5)

Experience adjustments on plan assets 37.7 (217.7) (4.5) 62.1 126.3

Total actuarial gain/(loss) (19.6) (235.9) 39.0 46.6 4.8

The amount recognized as an expense for defined contribution plans was CHF 9.2 million (previ-

ous year: CHF 12.0 million).


19. PROVISIONS

CHFm Restructuring Onerouscontracts

Warranties Otherprovisions

Total

Balance at 1.1.2008 17.9 22.4 10.2 18.0 68.5

Additions 2.9 1.6 3.0 3.0 10.5

Payments (7.9) (2.6) (1.5) (2.4) (14.4)

Release of unused amounts (1.5) (3.5) (3.2) (2.7) (10.9)

Reclassifications (0.9) 0.1 – (0.9) (1.7)

Currency translation adjustments (0.5) (0.2) (0.5) (0.6) (1.8)

Balance at 31.12.2008 10.0 17.8 8.0 14.4 50.2

Additions 4.5 1.9 4.4 7.2 18.0

Payments (9.2) (3.0) (2.7) (2.0) (16.9)

Release of unused amounts (2.8) (5.1) (3.3) (4.9) (16.1)

Acquisition of a subsidiary or business – – 0.6 1.8 2.4

Formerly classified as liabilities in relation to assetsheld for sale

1.9 – 2.2 7.5 11.6

Reclassifications (0.1) 3.4 0.5 (1.8) 2.0

Currency translation adjustments – – 0.1 0.2 0.3

Balance at 31.12.2009 4.3 15.0 9.8 22.4 51.5

Expected usage:

Within 12 months 9.1 8.1 5.2 10.7 33.1

Later 0.9 9.7 2.8 3.7 17.1

Balance at 31.12.2008 10.0 17.8 8.0 14.4 50.2

Within 12 months 3.4 3.2 6.7 20.8 34.1

Later 0.9 11.8 3.1 1.6 17.4

Balance at 31.12.2009 4.3 15.0 9.8 22.4 51.5

The restructuring provisions also include costs related to divested activities and the risks associ-

ated with these disposals. As a consequence of the ongoing restructuring process, it is not possible

to specify the timing of potential payouts precisely. The payments of CHF 9.2 million are primarily

related to the project Vitesse announced in 2007.

The provisions include onerous lease contracts for a number of leased properties that are par-

tially or fully vacant. Ascom does not use the vacant space and the Group experiences difficulties to

sublet the premises. The value of the provisions is based on the net cash flows using forecasts with

a time horizon to 2015 and by amortizing the costs with a market related discount rate of 6.5% (pre-

vious year: 5% – 6.5%).

Provisions for warranties are project-related and are based on systematic extrapolation of his-

torical payment patterns, which are verified and adjusted periodically.

Other provisions comprise provisions for project risks, environmental costs relating to certain

premises and other obligations arising from lawsuits in connection with the operational business of

Ascom companies. The additions mainly relate to operational business risks. Other provisions include

a provision in relation to open income tax cases of CHF 2.2 million.


20. OTHER LIABILITIES (CURRENT)

CHFm 31.12.2009 31.12.2008

Prepayments from customers 67.2 79.3

VAT liabilities 8.3 6.1

Personnel related accruals and other liabilities 36.0 33.6

Accrued costs in connection with PoC contracts 53.3 34.8

Other accruals and liabilities 38.7 35.4

Total 203.5 189.2

21. REVENUE

CHFm 2009 2008

Revenue from goods delivered and services 515.9 485.6

Other revenue 21.3 23.6

Total 537.2 509.2

22. OTHER INCOME/(EXPENSES), NET

CHFm 2009 2008

Release of provisions 1.5 1.7

Profit from sale of real estate 0.2 0.2

Trademark/management fees 0.1 1.3

Profit from divestment of a subsidiary or business 3.6 –

Other operating income/(expenses) (0.3) (1.0)

Total 5.1 2.2


23. FINANCIAL INCOME AND EXPENSES

CHFm 2009 2008

Financial income

Interest income 1.5 5.9

Net foreign exchange gains 3.8 –

Total 5.3 5.9

Financial expenses

Interest expenses1 3.5 2.2

Net foreign exchange losses – 6.2

Other financial expenses 2.1 0.6

Total 5.6 9.0

Net financial income (0.3) (3.1)

1Previous year mainly relating to discounting values of retirement benefit obligations and onerous contract provisions.

24. INCOME TAXES

CHFm 2009 2008

Income taxes on profit for the year 11.7 7.3

Effects from prior years (0.6) (0.1)

Income taxes from discontinued operations – (0.3)

Deferred income taxes (3.0) 1.3

Total income tax expenses 8.1 8.2


Analysis of income tax rate

The following elements explain the difference between the expected income tax charge (using

the weighted average tax rate based on earnings before income taxes of each Group company) and

the actual tax rate:

CHFm 2009 2008

Earnings before income taxes from continuing operations 32.5 40.9

Earnings before income taxes from discontinued operations – (24.2)

Total earnings before income taxes 32.5 16.7

Theoretically expected average income tax rate 30.2% 27.6%

Expected income tax expenses 9.8 4.6

Utilization of non-capitalized tax loss carry-forwards (1.1) (2.5)

Changes in income tax rates – (0.1)

Effect of current tax losses not capitalized 5.5 23.5

Effects from prior years (0.6) (0.1)

Effect of (income)/expenses taxed at lower rate or not taxed (5.5) (16.9)


Income taxes from continuing operations 8.1 8.2

Income taxes from discontinued operations – 0.3


The weighted average expected income tax rate was 30.2% (previous year: 27.6%). The increase

is caused by a change in the profitability of the Group’s subsidiaries in the respective countries.

25. PERSONNEL EXPENSES

CHFm 2009 2008

Wages and salaries 173.2 180.5

Social security costs 23.1 25.5

Share based payments 1.4 1.4

Pension costs 13.0 14.1

Other personnel expenses 12.9 15.2

Total 223.6 236.7


26. LEASE OBLIGATIONS

The future minimum payments under non-cancellable lease obligations fall due as follows:

CHFm Finance leases Operating leases31.12.2009 31.12.2008 31.12.2009 31.12.2008

Due within 12 month 0.8 – 22.0 21.5

Due after 12 month, but before 5 years 2.1 – 58.6 67.9

Due after 5 years 0.5 – 4.7 8.3

Total 3.4 – 85.3 97.7

Significant leasing agreements exist with regard to the sale and lease back of properties used

for operational purposes in Berne and Hombrechtikon.

27. EARNINGS PER SHARE

Earnings per share are calculated by dividing the Group profit for the year attributable to owners

of the parent by the time-weighted number of shares outstanding during the financial year. Own

shares are not considered as outstanding shares.

2009 2008

Group profit for the year attributable to owners of the parent (CHFm) 24.5 8.2

Weighted-average number of outstanding shares 34,778,764 35,182,013

Earnings per share (CHF) 0.70 0.23

For the purpose of calculating diluted earnings per share, the weighted-average number of ordi-

nary shares is adjusted by the weighted-average number of ordinary shares which would be issued

on the conversion of all potential dilutive share options into ordinary shares.

2009 2008

Group profit for the year attributable to owners of the parent (CHFm) 24.5 8.2

Weighted-average number of outstanding shares 34,778,764 35,182,013

Adjusted for the dilutive number of outstanding share options 36,145 108

Weighted-average number of diluted shares 34,814,909 35,182,121

Diluted earnings per share (CHF) 0.70 0.23

For the year ended 31 December 2009, the Board of Directors will propose no dividend payment

to the Annual General Meeting on 21 April 2010 (previous year: no dividend proposed). No dividend

was paid in 2009.


28. TRANSACTIONS WITH RELATED PARTIES

The following compensation was paid to the key management (including the Board of Directors

and the Executive Board):

in 1000 CHF 2009 2008

Short-term employee benefits 2,961.5 3,730.7

Post-employment benefits 229.0 206.0

Share-based payments1 606.9 591.5

Total 3,797.4 4,528.2

1 Includes charges relating to former CEO and CFO.

No further compensation was paid to key management during the year. At the date of that

statement of financial position, payables due to key management in the amount of CHF 0.4 million

(previous year: CHF 0.8 million) existed.

Legally independent funds provide for Swiss pensions. In the fiscal year 2009 CHF 4.6 million

(previous year: CHF 4.3 million) was paid to these funds. At the date of that statement of financial

position, a current receivable of CHF 6.7 million (previous year: CHF 3.4 million) was outstanding,

subject to an interest yield of 2.5%. The Swiss pension funds did not own any Ascom shares.

29. SHARE BASED PAYMENTS

Ascom Stock Option Plan 2005

In accordance with the resolution passed by the Board of Directors on 1 March 2005 and 27 June

2005, a total of 150,200 options were issued to seven members of Ascom’s senior management on

1 February 2005 and 1 July 2005 respectively, each option entitling the holder to purchase one share

with a nominal value of CHF 5.50. The strike price is CHF 22.25.

The options have a life of four years and are subject both to an exercise hurdle (outperformance

of the SMI index within a period of 12 months) and to a vesting period to 31 January 2007.

The Board of Directors resolved on 30 June 2006 to lower the strike price by CHF 5 for all outstand-

ing options with immediate effect due to the capital reduction of CHF 5 per share. The strike price for

all options with regard to the Ascom Stock Option Plan 2005 was fixed at CHF 17.25.

In 2009, no options were exercised (previous year: nil). 15,200 options left of the Option Plan 2005

expired on 31 January 2009.


In accordance with the resolution passed by the Board of Directors on 6 April 2006 and 29 August

2006, a total of 135,400 options were issued to four members of Ascom’s senior management on

1 March 2006 and 1 September 2006 respectively, each option entitling the holder to purchase one

share with a nominal value of CHF 5.50 and CHF 0.50 respectively. The strike price was CHF 19.75 and

CHF 14.75 respectively.


The options have a life of four years and are subject both to an exercise hurdle (outperformance

of the SMI index within a period of 12 months) and to a vesting period to 28 February 2008.

The Board of Directors resolved on 30 June 2006 to lower the strike price by CHF 5 for all outstand-

ing options with immediate effect due to the capital reduction of CHF 5 per share. The strike price for

all options with regard to the Ascom Stock Option Plan 2006 was fixed at CHF 14.75.

No options were exercised and 60,300 options became nil and void during 2008 due to the em-

ployment relationship of the holders having ended (2008 and prior years 29,200). There are thus 45,900

options still outstanding at 31 December 2009.

Ascom Stock Option Plan 2007/I

In accordance with the resolution passed by the Board of Directors on 5 March 2007 a total of

95,400 options were issued to three members of Ascom’s senior management on 5 March 2007 and

14 May 2007 respectively, each option entitling the holder to purchase one share with a nominal value

of CHF 0.50. The strike price is CHF 19.85.

The options have a life of four years and are subject both to an exercise hurdle (out performance

of the SMI index within a period of 12 months) and to a vesting period to 4 March 2009.

No options became nil and void due to the employment relationship of the holders having ended.

There are thus 95,400 options still outstanding at 31 December 2009.

Ascom Stock Option Plan 2007/II

In accordance with the resolution passed by the Board of Directors on 25 September 2007 a total

of 360,000 options were issued to 26 members of Ascom’s senior management on 1 October 2007,

each option entitling the holder to purchase one share with a nominal value of CHF 0.50. The strike

price is CHF 13.00.


of the SMI index within a period of 12 months) and to a vesting period (one third of the options can

be exercised after one year and another third in each consecutive year; after three years, all granted

options can be exercised).

In 2009, 12,000 options became nil and void due to the employment relationship of the holders

having ended (previous year: 6,000). There are thus 342,000 options outstanding at 31 December

2009.


In accordance with the resolution passed by the Board of Directors on 3 March 2008 a total

of 170,400 options were issued to six members of Ascom’s senior management on 3 March 2008,

on 28 July 2008 and 4 August 2008, each option entitling the holder to purchase one share with a

nominal value of CHF 0.50. The strike price is CHF 12.50.





In 2009, 5,000 options were exercised (previous year: nil). No options became nil and void due to

the employment relationship of the holders having ended. There are thus 165,400 options still out-

standing at 31 December 2009.



In accordance with the resolution passed by the Board of Directors on 2 March 2009 a total

of 490,200 options were issued to 33 members of Ascom’s senior management on 2 March 2009, on

1 June 2009, on 12 June 2009, on 29 June 2009, on 3 August 2009 and 12 August 2009, each option

entitling the holder to purchase one share with a nominal value of CHF 0.50. The strike price is

CHF 7.70.





No options became nil and void due to the employment relationship of the holders having ended.

There are thus 490,200 options still outstanding at 31 December 2009.

In the following table the development of outstanding options is presented:

Number ofoptions 2009

Weighted strikeprice (CHF)

2009

Number ofoptions 2008

Weighted strikeprice (CHF)

2008

Options outstanding at 1.1. 741,200 14.10 580,800 14.53

Granted 490,200 7.70 170,400 12.50

Exercised (5,000) 12.50 (4,000) 9.21

Forfeited (72,300) 14.46 (6,000) 13.00

Expired (15,200) 17.25 – –

Options outstanding at 31.12. 1,138,900 11.29 741,200 14.10

Options exercisable at 31.12. 432,765 14.63 239,400 14.05

2009 2008

Range of exercise prices of remaining options (CHF) 7.70 - 19.85 12.50 – 19.85

Weighted-average of remaining contract duration (years) 2.31 2.49

Weighted-average of fair value of granted options (CHF) 2.97 3.84

Average price of shares (exercised) 12.50 10.85

Personnel expenses included in equity (CHFm) 1.079 1.395

Personnel expenses included in liabilities (CHFm) 0.277 –


The enhanced American Model (binomial model) was used to determine the fair value, with the

following parameters:

Strike price(CHF)

Price ongrant date

(CHF)

Vestingperiod(years)

Max.duration(years)

Volatility(%)

Interestrate(%)

Dividendyield(%)

Withdrawalrate(%)

Expectedduration(years)

Allocation 2006 (1) 19.75 19.95 2.000 4 51.1 2.08 1.37 8 3.00

Allocation 2006 (2) 14.75 13.00 1.500 3.5 51.7 2.30 1.54 8 2.50

Allocation 2007 / I (1) 19.85 19.85 2.000 4 62.6 2.56 1.01 8 3.00

Allocation 2007/ I (2) 19.85 19.85 1.810 3.81 59.2 2.88 1.01 8 2.81

Allocation 2007 / II (1) 13.00 11.80 1.000 4 58.5 2.97 1.68 8 2.66

Allocation 2007 / II (2) 13.00 11.80 2.000 4 58.5 3.00 1.68 8 3.05

Allocation 2007 / II (3) 13.00 11.80 3.000 4 58.5 3.04 1.68 8 3.63

Allocation 2008 / I (1) 12.50 12.10 1.000 4 60.1 2.56 0.90 8 2.66

Allocation 2008 / I (2) 12.50 12.10 2.000 4 60.1 2.59 0.90 8 3.00

Allocation 2008 / I (3) 12.50 12.10 3.000 4 60.1 2.64 0.90 8 3.59

Allocation 2008 / II (1) 12.50 9.20 0.590 3.59 57.3 3.16 1.19 8 2.57

Allocation 2008 / II (2) 12.50 9.20 1.590 3.59 57.3 3.19 1.19 8 2.74

Allocation 2008 / II (3) 12.50 9.20 2.590 3.59 57.3 3.23 1.19 8 3.25

Allocation 2008 / III (1) 12.50 9.16 0.570 3.57 57.8 3.02 1.19 8 2.56

Allocation 2008 / III (2) 12.50 9.16 1.570 3.57 57.8 3.04 1.19 8 2.71

Allocation 2008 / III (3) 12.50 9.16 2.570 3.57 57.8 3.06 1.19 8 3.23

Allocation 2009 / I (1) 7.70 6.60 1.000 4 65.6 1.10 1.21 8 2.63

Allocation 2009 / I (2) 7.70 6.60 2.000 4 65.6 1.23 1.21 8 3.12

Allocation 2009 / I (3) 7.70 6.60 3.000 4 65.6 1.41 1.21 8 3.66

Allocation 2009 / II (1) 7.70 11.90 0.748 3.75 69.2 0.94 0.67 8 2.00

Allocation 2009 / II (2) 7.70 11.90 1.748 3.75 69.2 1.03 0.67 8 2.45

Allocation 2009 / II (3) 7.70 11.90 2.748 3.75 69.2 1.21 0.67 8 3.23

Allocation 2009 / III (1) 7.70 14.05 0.718 3.72 58.6 1.07 0.57 8 1.70

Allocation 2009 / III (2) 7.70 14.05 1.718 3.72 58.6 1.16 0.57 8 2.15

Allocation 2009 / III (3) 7.70 14.05 2.718 3.72 58.6 1.34 0.57 8 3.06

Allocation 2009 / IV (1) 7.70 13.55 0.671 3.67 60.2 0.98 0.59 8 1.73

Allocation 2009 / IV (2) 7.70 13.55 1.671 3.67 60.2 1.04 0.59 8 2.11

Allocation 2009 / IV (3) 7.70 13.55 2.671 3.67 60.2 1.22 0.59 8 3.02

Allocation 2009 / V (1) 7.70 13.65 0.575 3.58 58.5 0.95 0.59 8 2.45

Allocation 2009 / V (2) 7.70 13.65 1.575 3.58 58.5 1.00 0.59 8 2.58

Allocation 2009 / V (3) 7.70 13.65 2.575 3.58 58.5 1.16 0.59 8 3.08

Allocation 2009 / VI (1) 7.70 13.50 0.551 3.55 58.4 0.97 0.59 8 2.44

Allocation 2009 / VI (2) 7.70 13.50 1.551 3.55 58.4 1.02 0.59 8 2.55

Allocation 2009 / VI (3) 7.70 13.50 2.551 3.55 58.4 1.17 0.59 8 3.05

The expected volatility was estimated using the historical, long-term volatility (in the case of the 2007, 2008 and2009 grants also weighted with the implied volatility) over a ten-year period to the issue date.The market-related exercise hurdle (market condition) was taken into account in calculating the fair value of theoptions.For all outstanding options from the ASOP plan 2006 the strike price was lowered by CHF 5 on 30 June 2006 due tothe capital reduction of CHF 5 per share.


30. ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

Management has managed to find a buyer for the activities of Industry Switzerland (“LPS”),

Traffic Security Switzerland, Multitoll France and Payphones France and Mexico. The sale of these

activities took place in year 2008. The results of these activities until the dates of loss of control as

well as the loss on disposal are included in previous year’s loss from discontinued operations.

CHFm Payphones LPS TrafficSecurity

Other1 31.12.2008

ASSETS Property, plant and equipment – – – – –

Non-current assets – – – – –

Inventories and work in progress – – 0.1 – 0.1

Trade receivables – – 1.2 – 1.2

Other current assets 0.1 0.1 0.4 1.6 2.2

Current assets 0.1 0.1 1.7 1.6 3.5

Total assets 0.1 0.1 1.7 1.6 3.5

LIABILITIES Non-current liabilities – 2.2 0.6 0.6 3.4

Current liabilities 0.6 2.2 3.5 7.1 13.4

Total liabilities 0.6 4.4 4.1 7.7 16.8

1 Comprises activities of Network Integration Switzerland and Germany, Powerline Communications and Transport Revenue.

The assets and liabilities held for sale are valued at book value or fair value minus selling costs

if lower. All assets and liabilities classified as held for sale as per 31 December 2008 were reclassified

into ordinary assets and liabilities in 2009 as these were no longer considered as held for sale. There

was no impact on profit or loss of the current period due to the reclassification.


Further information on discontinued operations

CHFm Toll Payphones LPS TrafficSecurity

Other1 2008

Incoming orders 12.9 8.4 3.6 3.4 0.5 28.8

Revenue 11.9 10.4 3.6 7.2 0.6 33.7

Cost of goods sold (9.4) (6.4) (3.2) (4.9) (0.8) (24.7)

Gross profit/(loss) 2.5 4.0 0.4 2.3 (0.2) 9.0

Marketing and distribution (1.2) (2.1) (0.2) (1.8) (0.1) (5.4)

Research and development (0.4) (0.8) – (0.1) – (1.3)

Administration (0.9) (1.8) (0.3) (0.9) (0.3) (4.2)

Loss from divestment (6.4) (7.5) (5.7) (4.2) (0.4) (24.2)

Other income/(expenses), net 0.1 (0.8) – – 2.6 1.9

Earnings before interest and income taxes (EBIT) (6.3) (9.0) (5.8) (4.7) 1.6 (24.2)

Net financial income/(expenses) (0.1) 0.1 – – – –

Earnings before income taxes (EBT) (6.4) (8.9) (5.8) (4.7) 1.6 (24.2)

Income taxes – (0.3) – – – (0.3)

Profit/(loss) for the year from discontinued operations (6.4) (9.2) (5.8) (4.7) 1.6 (24.5)

Loss per share in CHF 0.70

Diluted loss per share in CHF 0.70

Cash flow from operating activities (2.4) (5.0) (0.8) (3.5) (0.1) (11.8)

Cash flow from investing activities – – – – – –

Cash flow from financing activities – – – – – –

1 Comprises activities of Network Integration Switzerland and Germany, Powerline Communications and Transport Revenue.

31. EVENTS OCCURRING AFTER THE DATE OF THAT STATEMENT OF FINANCIAL POSITION

With closing date of 1 February 2010, Ascom transferred its TelcoNet Services (TNS) unit to

Weiss + Appetito Holding AG, a construction and service company based in Berne. TNS was part of

Ascom’s Network Testing Division. The impact of this divestment on the result of Ascom will not be

material.

Since the date of that statement of financial position, no further events have occurred that have

an influence on the 2009 financial statements.

32. DERIVATIVE FINANCIAL INSTRUMENTS

Forward foreign exchange contracts

Foreign currencies are purchased and forward contracts are entered into at Group level as a

economic hedge against foreign currency risks for accounts outstanding or planned. The open contracts

comprise the following forward exchange contracts in various currencies:


CHFm 31.12.2009 31.12.2008

Contract volume 7.8 26.3

Positive market value – 1.7

Negative market value 0.3 4.2

Breakdown by currency (CHFm) 31.12.2009 31.12.2008

USD 1.6 2.2

EUR 2.0 17.7

GBP 4.2 6.4

Total 7.8 26.3

The maximum credit risk corresponds to the aggregated positive market values. This risk is con-

sidered low since the counterparties are financial institutions of good standing. The positive market

values are included under other current assets, the negative market values under other current liabil-

ities. The changes in value are recognized in profit or loss under financial income as foreign exchange

gains/losses.

33. CONTINGENT LIABILITIES

A number of Group companies issue warrantees in connection with their ordinary business

operations. Provisions are made for warranties where the likelihood of fulfillment is probable (also

refer note 19).

For the other contingent liabilities that mainly relate to guarantees issued by AscomHolding Ltd.

of CHF 46.7 million at 31 December 2009 (previous year: CHF 144.4 million, thereof CHF 31.6 million

pertained to discontinued operations). There is no indication that these guarantees will lead to fulfill-

ment payments.

Ascom SAS, sold in previous year, was notified by the Mexican tax authorities of a violation of

the national tax deduction requirements. Ascom has lodged an administrative appeal and expects that

the appeal will finally be granted. However, a provision was made for the assessed exposure and the

legal costs in relation to this appeal.

34. DOMICILE

Ascom Holding Ltd., the parent company of the Group, is domiciled in Berne, Switzerland.

35. TIME OF RELEASE FOR PUBLICATION

The Board of Directors approved the 2009 financial statements on 3March 2010 and gave permis-

sion for publication at the media conference on 10 March 2010.


36. SEGMENT INFORMATION

IFRS 8 requires separate reporting of segmental information for operating segments. Operating

segments reflect the Group’s management structure and the way financial information is regularly

reviewed by the Group’s chief operating decisionmaker, which is defined as the Chief Executive Officer

(CEO). In 2009, after the acquisition of TEMS, Ascom decided to form a new third division named

Network Testing, including also Ascom’s Telecom Solutions, which was part of the former Security

Solutions Division. Therefore Ascom has three clearly focused divisions as reportable segments: Wire-

less Solutions, Network Testing and Security Communication – all three being homogenous units under

the common umbrella of Mission-Critical Communication.

Wireless Solutions comprises products and services in connection with client-specific onsite com-

munication solutions. Network Testing offers a complete portfolio of software solutions for air interface

monitoring, benchmarking, analysis and radio network planning. Security Communication comprises

products and services for security organizations and the defense sector. The segment Corporate in-

cludes those Group activities that cannot be assigned directly to the divisions. No operating segments

were aggregated.

As a result of the amendment of the Group’s reportable segments, comparative information has

been restated accordingly.

Key figures by segment

CHFm WirelessSolutions

NetworkTesting

SecurityCommunication

Corporate Consolidation Total Ascom

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Incoming orders 275.3 316.0 130.5 67.5 108.2 129.3 0.3 0.4 0.1 (1.3) 514.4 511.9

Revenue 265.2 308.3 133.3 67.2 138.1 134.7 0.3 0.4 0.3 (1.4) 537.2 509.2

of which with other segments 0.5 0.8 – – 0.2 0.2 0.3 0.3 (1.0) (1.3) – –

Cost of goods sold (140.4) (158.5) (60.0) (37.0) (107.9) (103.7) (0.8) (1.1) (0.8) – (309.9) (300.3)

Gross profit/(loss) 124.8 149.8 73.3 30.2 30.2 31.0 (0.5) (0.7) (0.5) (1.4) 227.3 208.9

as % of revenue 47.1% 48.6% 55.0% 44.9% 21.9% 23.0% n/a n/a n/a n/a 42.3% 41.0%

Marketing and distribution (66.6) (74.4) (22.1) (14.1) (14.8) (13.9) (0.2) (0.2) (0.5) (0.1) (104.2) (102.7)

Research and development (18.9) (21.4) (23.0) (6.0) (5.1) (5.7) – – – 0.2 (47.0) (32.9)

Administration (11.0) (12.0) (12.3) (4.9) (4.4) (1.4) (12.1) (13.6) (0.7) 0.4 (40.5) (31.5)

Amortization of intangible assets fromacquisition

– – (7.9) – – – – – – – (7.9) –

Other income/(expenses), net (5.1) (6.0) 1.3 (1.4) (2.5) (4.0) 11.6 13.1 (0.2) 0.5 5.1 2.2

EBIT 23.2 36.0 9.3 3.8 3.4 6.0 (1.2) (1.4) (1.9) (0.4) 32.8 44.0


Financial income/(expenses), net (0.3) (3.1)

Earnings before income taxes (EBT) 32.5 40.9

EBITDA 30.0 43.3 18.1 4.2 4.8 7.5 (1.2) (1.4) (1.9) (0.3) 49.8 53.3


Capital expenditures 5.5 9.7 1.1 0.3 2.0 1.5 0.8 0.2 – – 9.4 11.7

Employees (FTE) at 31.12. 1,155 1,225 590 225 399 398 18 16 – – 2,162 1,864

In 2009, revenues of CHF 67.2 million (previous year: CHF 63.8 million) are derived from a single

external customer. These revenues are attributable to the segment Security Communication.


Reportable segments’ assets are reconciled to total assets as follows:

at 31.12.CHFm

WirelessSolutions

NetworkTesting

SecurityCommunication

Corporate Consolidation Total Ascom

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Reportable segments’ assets 115.6 132.8 280.7 40.5 66.2 70.2 4.4 6.5 1.6 (1.4) 468.5 248.6

Deferred income tax assets 4.3 2.4

Financial assets 5.5 11.6

Other non-current assets 2.7 2.0

Financial assets held for trading purposes 0.5 0.5

Cash and cash equivalents 127.7 182.6

Assets held for sale – 3.5


Key figures by region

CHFm Switzerland Europe1

excl. SwitzerlandAmericas Asia Pacific Total Ascom

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Incoming orders 108.4 141.5 310.8 327.6 62.4 33.6 32.8 9.2 514.4 511.9

Revenue 142.3 141.6 305.5 327.0 57.3 30.4 32.1 10.2 537.2 509.2

Non-current assets at 31.12.2 6.2 5.8 239.6 53.9 22.1 0.3 – – 267.9 60.0

Employees (FTE) at 31.12. 492 500 1,482 1,307 173 56 15 1 2,162 1,864

1 Including Africa.2 This line item exclusively includes property, plant and equipment as well as intangible assets.


37. CONSOLIDATED COMPANIES

Country Company Location Capital Investment

Austria Ascom Austria GmbH Vienna EUR 3,635,000 Ascom Holding Ltd.: 100%

Belgium Ascom (Belgium) NV Brussels EUR 1,424,000 Ascom Holding Ltd.: 100 %

China Ascom (Beijing) Network TestingService Co., Ltd.

Beijing CNY 2,550,000 Ascom (Sweden) Holding AB: 100%

Czech Republic Ascom (CZ) s.r.o. Prague CZK 200,000 Ascom (Switzerland) Ltd.: 100%

Denmark Ascom Danmark A/S Silkeborg DKK 1,200,000 Ascom Holding Ltd.: 100%

Finland Ascom (Finland) Oy Vantaa EUR 562,000 Ascom Holding Ltd.: 100%

France Ascom Holding SA Guilherand-Granges EUR 80,000 Ascom Holding Ltd.: 100%

Ascom (France) SA Nanterre EUR 2,000,000 Ascom (Sweden) AB: 100%

Germany Ascom Deutschland GmbH Frankfurt a.M. EUR 2,137,000 Ascom Unternehmensholding GmbH: 100%

Technologiepark Teningen GmbH Teningen EUR 6,136,000 Ascom Unternehmensholding GmbH:94%, Ascom (Switzerland) Ltd.: 6%

Ascom Unternehmensholding GmbH Frankfurt a.M. EUR 5,113,000 Ascom Holding Ltd.: 100%

Ascom Network Testing GmbH Eningen EUR 25,000 Ascom Unternehmensholding GmbH: 100%

Hong Kong Ascom Hong Kong Ltd. Hong Kong HKD 1,500,000 Ascom Holding Ltd.: 100%

India Ascom Network Testing Pvt. Ltd. Mumbai INR 1,000,000 Ascom (Sweden) Holding AB: 100%

Malaysia Ascom Network Testing Sdn Bhd Subang MYR 500,000 Ascom (Sweden) Holding AB: 100%

Netherlands Ascom (Nederland) BV Utrecht EUR 1,361,000 Ascom (Sweden) AB: 100%

Ascom Finance BV Arnhem EUR 45,000 Ascom Holding Ltd.: 100%

Mocsa Real Estate BV Utrecht EUR 454,000 Ascom (Nederland) BV: 100%

Ascom Tateco BV Hoofddorp EUR 18,000 Ascom (Nederland) BV: 100%

Norway Ascom (Norway) A/S Oslo NOK 1,250,000 Ascom (Sweden) AB: 100%

Poland Ascom Poland Sp. z o.o. Warsaw PLN 2,405,200 Ascom Holding Ltd.: 100%

Sweden Ascom (Sweden) AB Gothenburg SEK 96,154,000 Ascom Holding Ltd.: 66.4%,Ascom UK Group Ltd.: 33.6%

Ascom (Sweden) Holding AB Gothenburg SEK 70,000,000 Ascom Holding Ltd.: 100%

Ascom Network Testing AB Skelleftea SEK 100,000 Ascom (Sweden) Holding AB: 100%

Switzerland Ascom (Switzerland) Ltd. Berne CHF 28,000,000 Ascom Holding Ltd.: 100%

Ascom Network Testing Ltd. Solothurn CHF 200,000 Ascom Holding Ltd.: 100%

UK Ascom Croydon Ltd. Croydon GBP 600,000 Ascom UK Group Ltd.: 100%

Ascom Network Testing Ltd. Elstead GBP 2 Ascom UK Group Ltd.: 100%

Ascom (UK) Ltd. Sevenoaks GBP 50,000 Ascom (Sweden) AB: 100 %

Ascom UK Group Ltd. Croydon GBP 5,000,000 Ascom Holding Ltd.: 100%

USA Ascom Holding Inc. Rockaway NJ USD 10 Ascom Holding Ltd.: 100%

Ascom (US) Inc. Morrisville NC USD 10 Ascom (Sweden) AB: 100%

Ascom Network Testing Inc. Lake Forest USD 1 Ascom Holding Ltd.: 100%


To the general meeting of Ascom Holding Ltd., Berne

Report of the statutory auditors on the consolidated financial statements

As statutory auditors, we have audited the consolidated financial statements of Ascom Holding

Ltd., which comprise the consolidated statement of financial position, consolidated statement of

comprehensive income, consolidated statement of cash flows, consolidated statement of changes in

equity and notes (pages 44 to 96), for the year ended 31 December 2009.

Board of Directors’ Responsibility

The Board of Directors is responsible for the preparation and fair presentation of the consoli-

dated financial statements in accordance with the International Financial Reporting Standards (IFRS)

and the requirements of Swiss law. This responsibility includes designing, implementing andmaintain-

ing an internal control system relevant to the preparation and fair presentation of consolidated

financial statements that are free from material misstatement, whether due to fraud or error. The

Board of Directors is further responsible for selecting and applying appropriate accounting policies and

making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on

our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards as well

as the International Standards on Auditing. Those standards require that we plan and perform the

audit to obtain reasonable assurance whether the consolidated financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks ofmaterial misstatement of the consolidated financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers

the internal control system relevant to the entity’s preparation and fair presentation of the consoli-

dated financial statements in order to design audit procedures that are appropriate in the circum-

stances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal

control system. An audit also includes evaluating the appropriateness of the accounting policies used

and the reasonableness of accounting estimates made, as well as evaluating the overall presentation

of the consolidated financial statements. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements for the year ended 31 December 2009 give

a true and fair view of the financial position, the results of operations and the cash flows in accordance

with the International Financial Reporting Standards (IFRS) and comply with Swiss law.

97ASCOM FINANCIAL STATEMENTS 2009 GROUP REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS

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

incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we

confirm that an internal control system exists which has been designed for the preparation of

consolidated financial statements according to the instructions of the Board of Directors.

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

PricewaterhouseCoopers AG

Stefan Räbsamen Patrick Riner

Audit expert Audit expert

Auditor in charge

Zurich, 3 March 2010

98 ASCOM FINANCIAL STATEMENTS 2009 GROUP REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS

CHFm 2009 2008 2007 2006 2005

Incoming orders 514.4 511.9 545.6 536.2 563.3

Order backlog 242.4 243.1 261.2 205.7 196.2

Revenue 537.2 509.2 490.5 474.9 553.3

EBITDA 49.8 53.3 3.7 49.5 56.8

Earnings before interest and taxes (EBIT) 32.8 44.0 (16.1) 34.9 31.4

Personnel expenses 223.6 236.7 258.3 239.7 256.1

Depreciation, amortization and impairment 17.0 9.3 23.3 14.6 25.4

Group profit/(loss) 24.4 8.2 (48.1) 17.1 140.1

Net cash flow from operating activities 24.5 (2.3) 65.9 14.9 41.0

Investments in property, plant and equipment 6.4 6.7 6.7 13.5 17.1

Research and development expenses 47.0 32.9 33.7 27.3 35.3

Balance sheet total 609.2 451.2 512.1 492.8 761.8

Non-current assets 280.4 76.0 70.0 88.5 103.9

Non-current assets in % of balance sheet total 46.0 16.8 13.4 18.0 13.6

Current assets 328.8 375.2 442.1 404.3 657.9

Current assets in % of balance sheet total 54.0 83.2 86.6 82.0 86.4

Inventories and work in progress 47.3 48.6 46.0 51.5 70.0

Prepayments from customers 67.2 79.3 88.4 36.5 21.8

Equity 179.3 148.7 162.5 220.1 385.3

Equity in % of balance sheet total 29.4 33.0 31.7 44.7 50.6

Minority interests – 0.1 0.1 0.1 0.1

Minority interests in % of balance sheet total – – – – –

Current liabilities 299.2 267.5 300.3 226.2 319.2

Non-current liabilities 130.7 35.0 49.3 46.5 57.3

Liabilities 429.9 302.5 349.6 272.7 376.5

Liabilities in % of balance sheet total 70.6 67.0 67.2 55.3 49.4

Cash and marketable securities lessinterest-bearing liabilities

28.0 183.1 223.6 166.1 279.1

Gearing1 55.9 n/a n/a n/a n/a

Dividend paid2 – – – – 10.1

Number of employees (FTE) 2,162 1,864 1,813 1,816 2,386

1 Net interest-bearingdebt/equity.2 At theproposal of theBoard ofDirectors.

SUMMARY OF KEY FINANCIAL DATA

99ASCOM FINANCIAL STATEMENTS 2009 GROUP SUMMARY OF KEY FINANCIAL DATA

CHF 1,000 31.12.2009 31.12.2008

ASSETS Investments 92,500 55,720

Loans to Group companies 59,214 31,199

Non-current assets 151,714 86,919

Accounts receivables from Group companies 2,606 4,085

Accounts receivables from third parties 1,538 2,254

Prepaid expenses 1,091 83

Own shares 12,518 9,907

Cash and cash equivalents 2,219 60,043

Current assets 19,972 76,372

Total assets 171,686 163,291

LIABILITIES

AND

SHARE-

HOLDERS’

EQUITY

Share capital 18,000 18,000

Legal reserves

– General reserves 5,400 5,400

– Reserves for own shares 13,897 13,152

Special reserve from capital increase 7,979 8,724

Retained earnings 75,875 69,927

Equity 121,151 115,203

Loans from Group companies 11,162 8,105

Other non-current liabilities 1,126 1,057

Non-current liabilities 12,288 9,162

Provisions 31,821 32,902

Accounts payable to Group companies 4,765 3,828

Accounts payable to third parties 1,036 1,725

Third-party accruals 625 471

Current liabilities 6,426 6,024

Total liabilities 50,535 48,088

Total liabilities and shareholders’ equity 171,686 163,291

ASCOM HOLDING LTD. BALANCE SHEET

ASCOM FINANCIAL STATEMENTS 2009 HOLDING BALANCE SHEET100

CHF 1,000 2009 2008

Investment income 8,950 21,625

Profit from the sale of non-current assets 139 1,898

Financial income 7,083 5,726

Other income 5,718 5,413

Total income 21,890 34,662

Financial expenses (558) (14,988)

Administration expenses (6,750) (8,068)

Depreciation and value adjustments on investments and loans (8,595) (15,907)

Profit/(loss) before income taxes 5,988 (4,301)

Taxes (38) 889

Profit/(loss) for the year after taxes 5,950 (3,412)

INCOME STATEMENT

101ASCOM FINANCIAL STATEMENTS 2009 HOLDING INCOME STATEMENT

1. General

Ascom Holding Ltd., Berne, which is listed on the Swiss stock exchange, is the holding company

of the Ascom Group. The accounts are prepared in compliance with Swiss law. In the year under review

there were no changes in the basic accounting policies compared with the prior year.

2. Accounting policies

Non-current assets: Investments and loans are recognized at cost less necessary provisions. Cur-

rency differences resulting from loans in foreign currencies are charged to the income statement.

Provisions are recorded for unrealized currency gains. Current assets: The positions are valued at

nominal value less necessary provisions. Liabilities: The positions are valued at nominal value. Effects

on foreign currencies are charged to the income statement.

3. Contingent liabilities

Securities, guarantees and pledges in respect of Group companies, third parties and associated

companies total CHF 39.2 million (previous year: CHF 137.5 million). Of this amount, CHF 2.1 million

(previous year: CHF 104.2 million) are in favor of Group companies.

4. Investments and pledged assets

Direct and indirect investments are listed in note 37 of the consolidated financial statements. As

per 25 May 2009, Ascom Holding Ltd. entered into a long-term credit facility agreement with a bank

consortium of eight Swiss banks. The credit facility has to be repaid in stages over the period ending

31 December 2012. As of 31 December 2009, all shares of Ascom (Sweden) Holding AB and Ascom

Network Testing AB were pledged to secure the mentioned credit facility (previous year: nil).

5. Own shares

Own shares held by Ascom Holding Ltd. (Swiss Code of Obligations Art. 659) have developed as

follows:

CHF 1,000 Number Acquisition price

Balance at 1.1.2008 580,800 7,101

Additions 632,789 6,089

Disposals (4,000) (37)

Market value adjustments (3,246)

Balance at 31.12.2008 1,209,589 9,907

Additions 79,344 808

Disposals (5,000) (63)

Market value adjustments 1,866

Balance at 31.12.2009 1,283,933 12,518

NOTES TO THE ANNUAL FINANCIAL STATEMENTS

102 ASCOM FINANCIAL STATEMENTS 2009 HOLDING NOTES TO THE ANNUAL FINANCIAL STATEMENTS

6. Significant shareholders

6.1 Changes subject to disclosure requirements during the 2009 financial year

In an announcement dated 19 October 2009, published in compliance with Art. 20 of the Stock

Exchange Act (SESTA), Vontobel Fonds Services AG, Zurich disclosed that it holds Ascom securities

accounting for 3.01% of voting rights (SIX notice of 20 October 2009).

In an announcement dated 6 November 2009, published in compliance with Art. 20 of the Stock

Exchange Act (SESTA), Vontobel Fonds Services AG, Zurich disclosed that its share of Ascom voting

rights is below 3% of voting rights (SIX notice of 6 November 2009).

6.2 Significant shareholders

The following significant shareholders as defined by Art. 663c of the Swiss Code of Obligations,

holding more than 5% of the share capital and voting rights, was recorded in the share register at

31 December 2009: Zürcher Kantonalbank: 26.74% (previous year: 25.78%).

This does not cover shares, which are not registered in the share register (Dispo shares). Dispo

shares amounted to 27.2% as of 31 December 2009 (previous year: 28.8%). The following parties are

regarded as significant shareholders, as defined by Art. 663c Para. 2 of the Swiss Code of Obligations,

in accordance with the disclosure announcements made:

Zürcher Kantonalbank, Zurich: Ascom securities accounting for 25.89% of voting rights as well as sale■

positions with voting rights conferred of 2.57% (announcement dated 7 December 2007)

Bank Julius Bär & Co. AG, Zurich: Ascom securities accounting for 3.74% of voting rights as well as■

sale positions with voting rights conferred of 4.99% (announcement date 20 February 2008)

The company held 1,283,933 own shares at 31 December 2009. There are no known shareholders’

agreements.

7. Compensation and participations

Compensation of the Board of Directors 2009

Fees for members of the Board of Directors are set down in the Compensation Regulations (as

an appendix to the Organizational Regulations). The honorarium for a regular member of the Board

of Directors has been fixed at CHF 100,000 per annum after the Annual General Meeting 2007. The

Chairman of the Board of Directors receives a base honorarium of CHF 240,000 per annum. The Vice-

Chairman of the Board of Directors, who also acts as chairman of the Audit Committee, receives an

honorarium of CHF 160,000 per annum.

103ASCOM FINANCIAL STATEMENTS 2009 HOLDING NOTES TO THE ANNUAL FINANCIAL STATEMENTS

The members of the Board of Directors were paid compensation totaling CHF 700,000 in 2009

(previous year: CHF 761,670), as set out in the below table:

CHF Base Variable

Cash Number ofoptions

Bonus Otherbenefits

Total2009

Total20081

Juhani Anttila, Chairman of the Board of Directors 240,000 – – – 240,000 272,500

Paul E. Otth, Vice-Chairman of the Board of Directors 160,000 – – – 160,000 160,000

Dr J.T. Bergqvist, Member of the Board of Directors 100,000 – – – 100,000 100,000

Dr Wolfgang Kalsbach, Member of the Board of Directors 100,000 – – – 100,000 100,000

Dr Axel Paeger, Member of the Board of Directors

(until 15 April 2009)29,170 – – – 29,170 100,000

Kenth-Ake Jönsson, Member of the Board of Directors

(since 15 April 2009)70,830 – – – 70,830 –

Dr Rolf A. Meyer, Member of the Board of Directors

(until 15 April 2008)– – – – 29,170

Total 700,000 – – – 700,000 761,670

1 The full compensation 2008 was paid in cash as base compensation except for Juhani Anttila, Chairman of the Board of Directors, who

received in 2008 CHF 240,000 as base compensation and a variable compensation of CHF 32,500.

Compensation of the Executive Board for 2009

The compensation packages of all members of the Executive Board are set by the full Board of

Directors based on the recommendation of the Compensation & Nomination Committee. Eachmember’s

total compensation consists of a basic salary and a performance-related bonus. The focus of the

performance-related bonus is linked to the attainment of clearly measurable targets set at the begin-

ning of the year. On achieving the defined targets, the respective member of the Executive Board shall

receive a predetermined percentage of his basic salary as a bonus. In cases where the targets set in

themember’s respective area of responsibility are exceeded – and the Group targets are also achieved

– a sum up to a maximum of double the target bonus may be paid.

In 2009, the members of the Executive Board received options worth 20% of the total of their

basic salaries and target bonuses under the Ascom Stock Option Plan 2009. The value of the options

was determined by an independent third party.

The allocation of options is made on the basis of stock option plans set up each year and agreed

in writing. The conditions regarding exercising are defined on allocation of the options, with no sub-

sequent changes being made and in particular no re-pricing. The management of the Ascom Stock

Option Plans is the responsibility of the Board of Directors.


CHF Base Variable


value ofoptions

Bonusprovision

Miscel-laneous

pensioncontribution

Total2009

Riet Cadonau, CEO (highest compensated member of theExecutive Board)

650,000 86,700 183,515 147,000 – 82,000 1,062,515

Other members 1,120,000 99,000 209,550 235,000 109,525 147,000 1,821,075

Total Executive Board 1,770,000 185,700 393,065 382,000 109,525 229,000 2,883,590

CHF Base Variable


value ofoptions

Bonusprovision

Miscel-laneous

pensioncontribution

Total2008

Riet Cadonau, CEO (highest compensated member of theExecutive Board)

650,000 68,400 294,120 366,000 80,000 74,000 1,464,120

Other members 1,170,000 102,000 297,360 429,000 274,000 132,000 2,302,360

Total Executive Board 1,820,000 170,400 591,480 795,000 354,000 206,000 3,766,480

Explanatory notes

Cash compensation consists of base salary (gross).■

All options allocated during 2009 were granted on 2 March 2009 and have a vesting period of 1■ – 3

years and expire 4 years following the grant date. Each option entitles the holder to buy one share

of the Company with an exercise price of CHF 7.70.

The value of the options has been calculated as grant date fair value (using a binomial model) for■

options granted in the current year. The average grant date fair value of the options granted in 2009

was CHF 2.12.

Total other benefits include a payment for a tax neutralization compensation in relation to an inter-■

national assignment in Sweden.

Executive Board members’ bonus claims for 2009 will be calculated and paid in 2010 after approval■

of the annual financial statements. The criteria governing payment of the 2009 bonus aremeasurable

and contractually regulated. The bonus amounts represent the accrued bonuses for services rendered

during 2009.

Pension contributions include the employer’s contribution to the pension fund. Contributions to■

mandatory social insurances are not included.

No loans or credits were extended to members of the Board of Directors or Executive Board in■

2009.

For members leaving the Executive Board in the course of the year, the total amount includes■

compensation during their term of office including all employer’s contributions to the occupational

pension scheme.

105ASCOM FINANCIAL STATEMENTS 2009 HOLDING NOTES TO THE ANNUAL FINANCIAL STATEMENTS

Settlement payments to former members of the Executive Board

Rudolf Hadorn, former CEO, was paid a total of CHF 75,000 during 2009 in compliance with con-

tractual commitments (vacation). Therewith all claims are compensated.

Alberto Romaneschi, former CFO, was paid a total of CHF 335,000 during 2009 in compliance with

contractual commitments. Therewith all claims are compensated.

Participations as of 31 December 2009

The following table sets out the number of participations which were held by members of the

Board of Directors and the Executive Board, including parties closely related to them:

Name Number ofshares

Number ofoptions

exercisable

Number ofemployee options

not exercisable

Board of Directors

Juhani Anttila, Chairman of the Board of Directors 75,500 – –

Paul E. Otth, Vice-Chairman of the Board of Directors – – –

Dr J.T. Bergqvist, Member of the Board of Directors – – –

Dr Wolfgang Kalsbach, Member of the Board of Directors – – –

Kenth-Ake Jönsson, Member of the Board of Directors – – –

Executive Board

Riet Cadonau, CEO 30,000 109,633 153,967

Fritz Mumenthaler, Deputy CEO/General Manager WirelessSolutions

20,000 88,500 63,500

Dr Martin Zwyssig, CFO – 9,333 51,667

Dr Fritz Gantert, General Manager Security Communication 45,000 28,000 63,500

Total Board of Directors and Executive Board 170,500 235,466 332,634

1 In accordance with the provisions of Ascom Stock Option Plans 2006, 2007/I and 2007/II, 2008, 2009.

Share allotment in the year under review

Ascom Holding Ltd. allotted no shares in 2009.

8. Risk management

Ascom Holding Ltd. is fully integrated into the group-wide risk assessment process of Ascom

Group. This Group risk assessment process also addresses the nature and scope of business activities

and the specific risks of Ascom Holding Ltd. in compliance with Art. 663b of the Swiss Code of Obliga-

tions (refer to the disclosures in the Group Financial Statements in note 3).


Assets

Investments include shares in Group companies amounting to CHF 91.6 million (previous year:

CHF 54.8 million). The increase in investments is primarily attributable to the acquisition of TEMS as

well as reversed value adjustments of investment values.

In the year under review, loans to Group companies increased by CHF 28.0 million mainly due to

financing activities in relation with the newly acquired TEMS business. The loans are mainly denomi-

nated in CHF and EUR.

Accounts receivable from Group companies consist mainly of short-term receivables denom-

inated in CHF, EUR, GBP and USD. Third-party receivables primarily include outstanding payments due

on the previous year sale of a Group company in Italy.

Prepaid expenses consist of an upfront fee for the newly established credit facility.

Liabilities and equity

Due to the increase of own shares, CHF 0.7 million was transferred from the special reserves to

the reserves for own shares.

The provisions primarily cover general valuation risks and warranties from the sale of companies

as well as receivable risks and unrealized foreign exchange differences.

Based on a syndicated credit facility agreement, a cash line of total CHF 100 million as well as a

guarantee line of total CHF 60 million has been made available to Ascom Holding Ltd.

Income statement

Income from investments decreased due to a lower amount of dividends distributed by Group

companies.

The increase in financial income results mainly from net foreign exchange gains on Group loans

and the market value adjustments on own shares.

Other income comprises trademark fees charged to Group companies.

Financial expenses decreased due to this year’s absence of net foreign exchange losses on Group

loans as well as value adjustments of own shares to market value.

The administration expenses include CHF 0.9 million (previous year: CHF 1.2 million) of personnel

related costs.

The value adjustments on investments and loans of CHF 8.6million consist mainly of value adjust-

ments and write-offs on loans to Group companies of CHF 13.8 million, reversals of value adjustments

on investments of CHF 4.0 million and release of provisions of CHF 1.3 million.

Taxes comprise capital taxes only.

Annual result

In 2009, Ascom Holding Ltd. posted a net profit of CHF 5.9 million (previous year: net loss of CHF

3.4million), while AscomGroup recorded a consolidated Group profit of CHF 24.4million (previous year:

CHF 8.2 million).

COMMENTS ON THE FINANCIAL STATEMENTS

107ASCOM FINANCIAL STATEMENTS 2009 HOLDING COMMENTS ON THE FINANCIAL STATEMENTS

CHF 2009

Retained earnings from previous year 69,925,692

Profit for the year 5,949,552

Retained earnings 75,875,244

Balance to be carried forward 75,875,244

PROPOSAL FOR THE APPROPRIATION OF RETAINED EARNINGS 2009

108 ASCOM FINANCIAL STATEMENTS 2009 HOLDING PROPOSAL FOR THE APPROPRIATION OF RETAINED EARNINGS 2009

To the general meeting of Ascom Holding Ltd., Berne

Report of the statutory auditors on the financial statements

As statutory auditors, we have audited the financial statements of Ascom Holding Ltd., which

comprise the balance sheet, income statement and notes (pages 100 to 108), for the year ended

31 December 2009.

Board of Directors’ Responsibility

The Board of Directors is responsible for the preparation of the financial statements in accordance

with the requirements of Swiss law and the company’s articles of incorporation. This responsibility

includes designing, implementing andmaintaining an internal control system relevant to the prepara-

tion of financial statements that are free from material misstatement, whether due to fraud or error.

The Board of Directors is further responsible for selecting and applying appropriate accounting policies

and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards

require that we plan and perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and dis-

closures in the financial statements. The procedures selected depend on the auditor’s judgment, includ-

ing the assessment of the risks of material misstatement of the financial statements, whether due to

fraud or error. In making those risk assessments, the auditor considers the internal control system

relevant to the entity’s preparation of the financial statements in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriate-

ness of the accounting policies used and the reasonableness of accounting estimates made, as well as

evaluating the overall presentation of the financial statements. We believe that the audit evidence we

have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements for the year ended 31 December 2009 comply with Swiss

law and the company’s articles of incorporation.

109ASCOM FINANCIAL STATEMENTS 2009 HOLDING REPORT OF THE STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS

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

incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we con-

firm that an 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 the company’s articles of incorporation.

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

PricewaterhouseCoopers AG

Stefan Räbsamen Patrick Riner

Audit expert Audit expert

Auditor in charge

Zurich, 3 March 2010

110 ASCOM FINANCIAL STATEMENTS 2009 HOLDING REPORT OF THE STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS

CHF 2009 2008 2007 2006 2005

Dividend per share

Registered shares CHF 0.50 – – – – 0.28

Equity per share

Registered shares CHF 0.50 5.16 4.23 4.79 6.17 10.70

Earnings per share1

Registered shares CHF 0.50 0.70 0.23 (1.35) 0.48 4.04

Stock quote high/low

Registered shares CHF 0.50 14.05/6.60 12.9/5.94 28.40/10.75 20.65/12.00 22.95/16.55

Taxable values

31.12.2009 31.12.2008 31.12.2007 31.12.2006 31.12.2005

Registered shares CHF 0.50 9.75 8.19 12.35 15.35 18.65

Number of shares

31.12.2009 31.12.2008 31.12.2007 31.12.2006 31.12.2005

Registered shares CHF 0.50 36,000,000 36,000,000 36,000,000 36,000,000 36,000,000

Of which own shares

Registered shares CHF 0.50 1,283,933 1,209,589 580,800 317,600 304,800

1 Based on the consolidated financial statements (excluding own shares).

KEY FINANCIAL DATA ON THE SHARE CAPITAL

111ASCOM FINANCIAL STATEMENTS 2009 HOLDING KEY FINANCIAL DATA ON THE SHARE CAPITAL

112

AUSTRIA

Ascom Austria GmbH P. Bernhofer Lemböckgasse 49, 1230 Wien

+43 1 811 77 0 I Fax 1 811 77 10

[email protected]

BELGIUM

Ascom (Belgium) NV C. Hoonhoud Raketstraat 64, 1130 Bruxelles

+32 2 727 13 11 I Fax 2 727 13 00

[email protected]

CHINA

Ascom (Beijing) Network

Testing Service Co., Ltd.

W. Wu Suite 1704, 17th Floor, China Resources Building

No. 8 Jianguomenbei Avenue, Beijing 100005

+86 10 84769000

[email protected]

CZECH REPUBLIC

Ascom (CZ) s.r.o. J. Polàk Zemské právo 1199/5, 102 00 Praha 10

+420 267 219 512 I Fax 267 219 511

[email protected]

DENMARK

Ascom Danmark A/S A.R. Andersen Naverland 3, 2600 Glostrup

+45 70 20 38 83 I Fax 70 20 38 82

[email protected]

FINLAND

Ascom (Finland) Oy A.R. Andersen Pakkalankuja 6, 01510 Vantaa

+358 9 825 901 I Fax 9 825 902 79

[email protected]

FRANCE

Ascom (France) SA Ph. Chevalier 28, Avenue de l’lle Saint-Martin, 92024 Nanterre Cedex

+33 8 11 90 20 10 I Fax 1 47 69 64 52

[email protected]

GERMANY

Ascom Deutschland GmbH J. Gebauer Edisonstrasse 11-13, 60388 Frankfurt a.M.

+49 6109 738 0 I Fax 6109 738 333

[email protected]

INDIA

Ascom Network Testing Pvt. Ltd. M. Nanakkal Unit No. 109, 1st Floor, Prestige Meridian – 1, # 29 M.G. Road,

Bangalore 560 001

+91 80 4170 4800 I Fax 80 4170 4764

[email protected]

IMPORTANT GROUP COMPANIES

ASCOM ANNUAL REPORT 2009 IMPORTANT GROUP COMPANIES

MALAYSIA

Ascom Network Testing Sdn Bhd R. Lindell Office Suite No. 2, Level 10, Empire Tower 2, Empire Subang, Jalan SS16/1

47500 Subang Jaya, Selangor Darul Ehsan

+60 3 8314 6391 I Fax 3 8314 6379

[email protected]

NETHERLANDS

Ascom (Nederland) BV C. Hoonhoud Savannahweg 31, Postbus 40242, 3504 AA Utrecht

+31 30 240 91 00 I Fax 30 241 19 46

[email protected]

NORWAY

Ascom (Norway) A/S A.R. Andersen Brobekkveien 80, Postboks 73, Grorud, 0905 Oslo 9

+47 23 24 77 00 I Fax 22 64 74 40

[email protected]

POLAND

Ascom Poland Sp. z o.o. P. Staniszewski ul. Fabryczna 16/22, office 24, 00-446 Warszawa

+48 22 622 62 55 I Fax 22 622 62 56

[email protected]

SWEDEN

Ascom (Sweden) AB A.R. Andersen Grimbodalen 2, P.O. Box 8783, 40276 Göteborg

+46 31 55 94 00 I Fax 31 55 63 78

[email protected]

Ascom Network Testing AB K. Schönfeldt Skelleftehamnsvägen 206, 932 83 Ursviken

+46 910 731 000 I Fax 8 751 46 46

[email protected]

Ascom Network Testing AB U. Lundmark Kistagangen 26, Box 7049, 164 07 Kista

+46 910 731 000 I Fax 8 751 46 45

[email protected]

SWITZERLAND

Ascom Holding AG R. Cadonau Belpstrasse 37, 3000 Bern 14

+41 31 999 11 11 I Fax 31 999 23 00

[email protected]

Ascom (Schweiz) AG F. Gantert Belpstrasse 37, 3000 Bern 14

+41 31 999 11 11 I Fax 31 999 23 00

[email protected]

Ascom Network Testing AG B. Gerber Glutz-Blotzheimstrasse 3, 4503 Solothurn

+41 32 624 21 21 I Fax 32 624 21 43

[email protected]

113ASCOM ANNUAL REPORT 2009 IMPORTANT GROUP COMPANIES

UK

Ascom (UK) Ltd. R. Wood Clockhouse Court, 45 Westerham Road, Bessels Green,

Sevenoaks, Kent TN13 2QB

+44 1732 742 014 I Fax 1732 455 865

[email protected]

Ascom Network Testing Ltd. P. Rooken-Smith Oak House, Shackleford Road,

Elstead, Surrey, GU8 6LB

+44 1252 705 705 I Fax 1252 705 706

[email protected]

USA

Ascom (US) Inc. Ch. West 598 Airport Blvd, Suite 300, Morrisville, NC 27560

+1 919 234 25 00 I Fax 919 234 25 26

[email protected]

Ascom Network Testing Inc. R. Lundqvist 1943 Isaac Newton Square, Reston, VA 20190

+1 571 203 4600 I Fax 571 203 4593

[email protected]

Ascom Network Testing Inc. R. Lundqvist 25541 Commercentre Drive, Suite 100, Lake Forest, CA 92630

+1 949 614 8700 I Fax 949 598 3693

[email protected]

114 ASCOM ANNUAL REPORT 2009 IMPORTANT GROUP COMPANIES

DATES AND CONTACTS

Important dates 2010

21 April 2010

Annual General Meeting

BEAexpo, Berne

25 August 2010

Presentation of half-year results 2010

SIX Swiss Exchange, Zurich

Contact addresses

Ascom Corporate Communications

Ascom Holding AG

Daniel Lack, General Secretary & Director of

Corp. Communications

Stettbachstrasse 6 | CH-8600 Dübendorf

+41 31 999 11 11 | Fax 44 823 13 33

[email protected]

Ascom Investor Relations

Ascom Holding AG

Martin Zwyssig, Chief Financial Officer

Stettbachstrasse 6 | CH-8600 Dübendorf

+41 31 999 11 11 | Fax 44 823 13 21

[email protected]

115ASCOM ANNUAL REPORT 2009 DATES AND CONTACTS

Declaration of forward-looking statements

This Annual Report contains statements that constitute forward-looking statements relating to

Ascom. Because these forward-looking statements are subject to risks and uncertainties, the reader

is cautioned that actual future resultsmay differ from those expressed in or implied by the statements,

which constitute projections of possible developments. All forward-looking statements are based only

on data available to Ascom at the time of preparing the Annual Report.

This Annual Report is also available in German. For the general part and Corporate Governance,

the German version is binding. The full Annual Report of the Ascom Group can be viewed online at:

http://www.ascom.com/report-en

Publishing details

Publisher Ascom Holding Ltd., Berne

Concept Ascom Corporate Communications, Dübendorf

Financial Statements Ascom Corporate Finance, Dübendorf

Editorial Tolxdorff & Eicher Consulting, Horgen

Translation CLS Communication AG, Zurich

Design MetaDesign Suisse AG, Zurich

Photos Günter Bolzern, Bülach

Prepress & printing Printlink AG, Zurich

© Ascom Holding Ltd. 2010

www.ascom.com

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