Notes to the financial statements

1.1 General

These annual financial statements were prepared in accordance with the provisions of the Swiss accounting law (Title 32 of the Swiss Code of Obligations). The main valuation principles applied that are not prescribed by law are described below.

In accordance with the provisions of the Swiss accounting law (article 961d para. 1 CO), the company does not provide additional information in the notes, a cash flow statement or an annual report, referring instead to the consolidated financial statements of dormakaba Holding AG for the relevant information.

1.2 Loans to Group companies and other financial assets

Loans granted to Group companies and other financial investments in foreign currencies are valued at the market rate on the actual closing date. The valuation is at nominal values, taking into consideration any impairment required.

1.3 Investments

Investments are valued in line with the principle of individual valuation. General value adjustments can be applied.

1.4 Dividend income

Dividend income is booked when payment is received.

2.1 Investments: company, domicile

There are no changes to the Investments.

2.2 Loans to Group companies

2.3 Long-term provisions

This provision relates to general risks.

2.4 Share capital

As of 30 June 2018, share capital amounted to CHF 420,002.60 divided into 4,200,026 registered shares at a par value of CHF 0.10.

Conditional capital as of 30 June 2018 amounted to CHF 42,438.

In accordance with the resolution of the Annual General Meeting of 17 October 2017, the Board of Directors is authorized to increase the share capital, until no later than 17 October 2019, by a maximum amount of CHF 72,000 by issuing a maximum of 420,000 fully paid-in registered shares with a nominal value of CHF 0.10 each. The increase may be made in partial amounts.

No shares were issued out of authorized capital in the year under review.

2.5 Principal shareholders

2.6 Treasury shares

3.1 Dividend income

The dividend income for the year was CHF 63.3 million (previous year: CHF 32.8 million).

3.2 Financial income

The financial income came primarily from interest income on the loans granted to Group companies as well as guarantee fees in relation to the bonds issued by dormakaba Finance AG.

3.3 Financial expenses

The financial expenses primarily are related to guarantee fees paid to dormakaba Holding GmbH & Co. KGaA to guarantee on the bond issued by dormakaba Finance AG.

3.4 Other operating expenses

The main expense items related to external consulting services and marketing expenses.

3.5 Direct taxes

Direct taxes are comprised of capital taxes and for the prior year also income taxes.

4.1 General information

dormakaba Holding AG is incorporated and domiciled in Rümlang (Switzerland). The address of its registered office is: Hofwisenstrasse 24, 8153 Rümlang, Switzerland.

The company is listed on the Swiss Stock Exchange (SIX).

4.2 Full-time equivalents

As of 30 June 2018, dormakaba Holding AG did not employ any personnel.

4.3 Contingent liabilities

The guarantees disclosed relates to the guarantee to the bond holders for the bonds issued by dormakaba Finance AG in the total nominal amount of CHF 680.0 million.

The dormakaba companies in Switzerland are treated for VAT purposes as one single entity (Group taxation article 15 Swiss VAT law). If one company is unable to meet its payment obligations to the taxation authorities, the other Group companies within the tax group are jointly and severally liable.

Conditional capital of CHF 36,000 (CHF 36,000 in the prior year) is earmarked for the coverage of convertible bonds and warrant bonds, plus CHF 6,438.40 (CHF 6,938.40 in the prior year) for shares or share options to associates and members of the Board of Directors of which CHF 0 (CHF 0 in the prior year) were exercised in financial year 2017 / 18.

The authorized capital at year-end amounts to CHF 42,000 (CHF 41,900 in the prior year).

As at the respective reporting date, the individual members of the Board of Directors and the Executive Committee (including related parties) held the following number of shares in dormakaba Holding AG. None of the members of the Board of Directors and the Executive Committee held any options.

dormakaba has reached an agreement on the sale of its indirect 40% shareholding in ISEO to the Facchinetti family, who already owns the remaining 60% in the company. Closing of the divestment contract is expected to take place by fall 2018.