Annual Report 2001/02 - Sonova Holding AG

Every 10th person
has difficulty in hearing.
Yet every 100th person
is using a hearing aid.
Annual Report
2001/02
10
100

10
100
10 out of 100 people in this world suffer
from a hearing loss. Yet only 1 out of
every 10 hearing impaired people uses a
hearing instrument to improve their
quality of life. At Phonak Group, our
mission is to return quality of life to these
people and allow them to take an active
role in everyday life again.
3 Foreword
4 Five-year Key Figures
5 Management
Business Report
6 Financial Review
10 New Technologies and Products
12 Markets
14 Operations
16 Outlook
Financial Reporting
17 Consolidated Financial Statements
47 Financial Statements of Phonak Holding AG
56 Information for the Investor
59 Company Information
Contents

2
Aero –
easy listening
10
100
10 out of every 100 people in this world
suffer from a hearing loss. 10 out of every
100 people therefore have a diminished
quality of life and risk becoming isolated
from the social environment around
them. At the Phonak Group, our mission is to
return quality of life to these people and allow
them to take an active role in everyday life
again.
Yet only 1 out of every 10 hearing impaired
people seek a solution for their hearing loss.
1 out of every 10 hearing impaired people uses
a hearing instrument to improve their hearing
ability. For Phonak, this represents the tremendous,
untapped potential of the markets we
serve with our products and services. In addition
to this, as the population ages, the average
lifespan increases and the demand for high
quality of life continues, the market for hearing
instruments and related products will keep
growing.

3
Dear Shareholder,
The financial year 2001/02 proved to be a challenging year for the
Phonak Group. Although we did post sales of CHF 576 million –
a record level – and 25% above last year, for a number of reasons,
we did not achieve our original sales and profit objectives.
Over the last twelve months, the industry experienced a rapid
development of the mid-level digital product segment. This development
occurred more quickly than we anticipated and, until
recently with the launch of Aero, Phonak did not have a competitive
product to offer in this segment.
Further, we did not sell as many Claro premium digital products
as planned. This said, Phonak sold 10% more Claro units this year
than in the previous year. These results confirmed that, in spite
of the introduction of several new premium product lines by our
competitors, Claro is still regarded as an exceptional premium
product offering key features that are not available in competitors’
products.
In addition, the integration of Unitron has required more effort
and cost than expected. During this past year, we accelerated the
integration of Unitron’s two manufacturing divisions, and two
brands, in the United States. This integration effort led to
increased costs, and less EBITA than originally forecasted; however,
the Unitron Hearing brand has emerged, with a new facility,
new products and a strengthened management team, and is wellpositioned
to increase its share of the U.S. market.
The operational restructuring of the Phonak Group, with the integrated
Unitron Group, is mostly completed. It is now time to focus
again on our marketing and sales effort. Therefore, we agreed with
the former CEO, Peter Pfluger, to part company effective the
beginning of the 2002/03 business year. The search for a suitable
marketing-oriented successor is well under way and we are confident
that, by the end of 2002, we will be able to present the new
CEO.
Looking forward, the Phonak Group will no doubt benefit from
the new products developed recently. The Group has made very
encouraging progress enlarging its product offering under both the
Phonak and Unitron Hearing brands. More than ever, the product
pipeline is broad and competitive. This past year, we have seen the
launch of several new products, such as Claro Completely-In-the-
Canal (CIC), the fully digital mid-level hearing computers, Aero
(Phonak) and Axiom (Unitron Hearing), and the first FM transmitters
with synthesizer technology.
Andy Rihs
CEO and Chairman of the Board
Foreword
This coming year, we will see the launch of quite a few new
products, among which the Aero Behind-the-Ear (BTE), Supero –
the first line of digital super high power instruments, and Unison,
a new line of digital products offered by Unitron Hearing to the
economy-level market. You will also see Phonak launch a new premium
line – the next generation following Claro. This product line
will comprise an entire communication system: a complete range
of compact hearing instruments along with wireless and remote
control products.
From a financial perspective, we expect organic sales growth in
2002/03 above 10%, fueled by the many new product launches,
and an over-proportionate improvement in profit in the range of
20%. The timing of new products will result in a slower sales and
profit performance in the first half of the year, followed by a
stronger second half year.
A difficult financial market as well as our shortfall in sales and
EBITA from original expectations did impact our stock price. However,
we would like to stress two key factors. First, the Phonak
Group continues to take a leadership role in this industry, whether
it relates to new products, key research and technology development,
innovative operating and marketing models, market share
growth or financial performance. Second, we are convinced that
the Phonak Group is well-positioned to take advantage of the
opportunities that this industry offers. As such, we believe that we
are doing what is required to deliver results that will reward the
confidence of our shareholders.
Our slogan “Ooni Lüüt gaat nüüt” translated means “Nothing
works without people”. Recognizing the continuing truth of this
statement, I want to thank all employees within the Phonak Group
for their hard work and dedication during a very busy and
challenging year. Finally, to our shareholders – who have doubled
in number during the past year, demonstrating their confidence in
the Group – we thank you for the trust you have shown in the
Phonak Group, in our international teams, in our products and in
our mission of improving the lives of the hearing impaired.

4 Five-year Key Figures (Consolidated)
in CHF 1,000
unless otherwise specified 2001/02 2000/01 1999/00 1998/99 1997/98
Consolidated sales 576,078 460,152 314,281 258,668 218,600
increase compared to prev. year (%) 25.2 46.4 21.5 18.3 27.8
Operating profit (EBITA) 73,013 99,792 50,617 44,230 36,719
change compared to prev. year (%) –26.8 97.2 14.4 20.5 28.8
in % of consolidated sales 12.7 21.7 16.1 17.1 16.8
Operating profit (EBIT) 59,770 95,310 48,803 42,457 34,995
change compared to prev. year (%) –37.3 95.3 14.9 21.3 28.4
in % of consolidated sales 10.4 20.7 15.5 16.4 16.0
Consolidated net profit 42,626 65,717 34,033 30,082 23,592
change compared to prev. year (%) –35.1 93.1 13.1 27.5 34.4
in % of consolidated sales 7.4 14.3 10.8 11.6 10.8
in % of shareholders’ equity (ø) 12.5 26.0 20.4 21.6 20.2
Net cash from operating activities 57,536 91,454 36,391 27,652 23,171
change compared to prev. year (%) –37.1 151.3 31.6 19.3 2.4
in % of consolidated sales 10.0 19.9 11.6 10.7 10.6
Free cash flow 1) 18,410 –63,221 17,126 16,381 –8,919
in % of consolidated sales 3.2 –13.7 5.4 6.3 –4.1
Capital expenditure 29,794 21,842 17,426 11,815 28,038
Depreciation of tangible fixed assets 18,475 13,245 10,088 8,429 7,014
Amortization of intangible assets 13,571 4,482 1,814 1,773 1,724
Research & development costs 31,453 31,381 25,300 20,200 16,000
increase compared to prev. year (%) 0.2 24.0 25.2 26.3 6.7
in % of consolidated sales 5.5 6.8 8.1 7.8 7.3
Total assets 742,246 703,793 346,273 300,180 268,238
Cash and cash equivalents 73,046 85,397 47,965 36,591 28,230
Shareholders’ equity 360,821 322,905 182,839 151,162 127,048
Quick ratio (%) 2) 113.2 126.8 155.2 150.0 148.9
Equity financing ratio (%) 3) 48.6 45.9 52.8 50.4 47.4
Personnel expenses 176,785 128,007 99,412 86,237 69,794
in % of consolidated sales 30.7 27.8 31.6 33.3 31.9
Number of employees (average) 2,378 1,583 1,239 1,064 906
Sales per employee 242 291 254 243 241
Total shares issued 65,204,200 646,864 630,875 628,872 628,297
average number of shares,
on which information
per share is based 4) 64,808,282 63,257,400 62,888,500 62,802,200 62,779,500
Information per share 4)
Earnings per share (CHF) 0.6577 1.0389 0.5412 0.4790 0.3758
Shareholders’ equity per share (CHF) 5.5675 5.1046 2.9074 2.4070 2.0237
Dividend per share (CHF) 0.12 5) 0.00 6) 0.12 0.11 0.09
1) Net cash from operating activities less net cash used in investing activities
2) Cash and cash equivalents + marketable securities + receivables in % of current liabilities
3) Shareholders’ equity in % of total assets
4) prior year numbers adjusted for the 1:100 share split
5) Proposal to the General Meeting of July 11, 2002
6) Par value reduction of CHF 0.15 paid in lieu of dividend

5 Management
Group Executive Management from left to right: Alain Spinedi, Michael Jones, Andy Rihs, Paul Thompson, Stefan Dingerkus
Group Executive Management
as of April 1, 2002
Andy Rihs
Chief Executive Officer
Paul Thompson
Chief Financial Officer
Michael Jones
North American Markets
Alain Spinedi
International Sales
Stefan Dingerkus
Worldwide Operations
Board of Directors
Andy Rihs
Chairman (until 2003 AGM)
Co-founder of Phonak Group
Dr. Alexander Krebs
Vice-Chairman (until 2003 AGM)
Partner CapVis Equity Partners Ltd.
Vice-Chairman of the Board of Tobler Management
Holding Ltd.
Dr. h.c. Daniel Borel
Member (until 2002 AGM)
Chairman of the Board of Logitech International Ltd.
Heliane Canepa
Member (until 2002 AGM)
Member of the Board of BB Medtech
Member of the Administration Board of Migros Cooperatives
President and CEO of Nobel Biocare
Beda Diethelm
Member (until 2003 AGM)
Co-founder of Phonak Group
Hans-Ueli Rihs
Member (until 2003 AGM)
Co-founder of Phonak Group
Dr. Ernst Thomke
Member (until 2002 AGM)
Chairman of the Board of BB Biotech, BB Medtech,
Nobel Biocare and Metalor Technologies Ltd.
Member of the Executive Committee of the
Foundation Board of ISREC (Swiss Institute for
Experimental Cancer Research)
Audit Committee
Dr. Alexander Krebs (Chairman)
Heliane Canepa
Hans-Ueli Rihs
Auditors
PricewaterhouseCoopers, Zurich

Supero –
designed for Power

Financial Review
As we review the performance of the Phonak Group over the past
year, we acknowledge that the results are not indicative of
Phonak’s potential nor are they satisfying to us. However, Phonak
did achieve another 25% growth in sales, on top of the outstanding
46% growth rate from the prior year driven by the
success of the Claro product, bringing the sales to a record level
of CHF 576 million. Phonak also posted the second highest level
of operating income in the company’s history at CHF 73 million.

Over several decades Phonak has established itself
as a leading provider of high-performance hearing
solutions for people with a severe to profound
hearing loss. The driving force behind the power
applications developed by Phonak is an in-depth
understanding of the special needs of wearers
with a severe to profound hearing loss. Supero is
designed to make a power of difference.
Supero is the only digital product line specifically
designed to meet the needs of those with a significant
hearing loss. The product line is dedicated
to audibility, comfort and reliability. Three different
models make up the digital line with features
to satisfy all needs and tastes.
The Supero range of hearing instruments is not only unique in
terms of powerful performance – it also offers an unrivalled
breadth of solution.
Supero –
designed for Power

7
Consolidated sales
In the financial year 2001/02, the Phonak Group increased sales
by 25% to a total of CHF 576 million.
22% of this growth was realized through the acquisitions of Indo
Laem (Spain), Unitron Industries (Canada) and Hansaton (Austria).
In addition, the Group grew organically by 5% while the market,
as a whole, did not grow. Due to the weakness of the Euro, and the
flat US dollar, the foreign currency effect resulted in a 2% loss in
sales.
Sales of premium, or first class, products accounted for 30% (previous
year 31%) of total sales. Following the overwhelming success
of the fully digital product line Claro in 2000/01, unit sales of
this product increased another 10%. Sales of Claro, and the average
selling price thereof, were below our expectations as a result
of a delay in the Completely-In-the-Canal (CIC) product launch
and a shift in demand from premium to mid-level digital products,
a segment in which Phonak only recently had a product to offer.
Sales of Unitron Hearing’s premium digital product, Nexus, fell
below expectations due to the focus on integration efforts this
past year and because the premium product segment was wellsupplied
at the time of this product launch.
Mid-level products accounted for 24% of total sales (previous
year 25%). In 2001/02, mid-level digitally programmable products,
such as Phonak PiCS products and Unitron Hearing’s Sound F/X
line, accounted for 48% of the mid-level sales. However, in the
second half of 2001/02, Phonak launched Aero, a mid-level digital
product, which has been well-received by markets such as North
America, France and the United Kingdom. This product is expected
to drive a higher proportion of sales in the mid-level segment next
year as the launch is completed, and supplemented with a Behindthe-Ear
(BTE) version.
Sales of lower segment, or economy segment, were 25% of total
sales (previous year 24%). This shift is also due to the strong representation
of Unitron Hearing in this segment.
Sales of wireless communication products (MicroLink and
MicroVox systems) continued to outperform all other product
lines and accounted for 7% of total sales (previous year 7%).
Consolidated sales
600
550
500
450
400
350
300
250
200
150
100
50
0
CHF in millions
Business Report
97/98 98/99 99/00 00/01 01/02
Operating cash flow and operating profit
Operating profit before goodwill amortization (EBITA) showed a
decrease to CHF 73.0 million (–27%). The decline, relative to the
outstanding performance of last year, is explained by several
factors. First, we experienced a decline in gross profit percentage
as a result of fewer sales than planned, and a 3% decline in
average selling price, in the premium product segment. This
pricing pressure was attributed to the economic conditions in
most markets as well as the shift in demand to mid-level digital
products.
Second, as already announced, we accelerated the integration of
Unitron’s two manufacturing sites and two brands in the United
States. This integration effort involved moving two production
sites into one new facility, rationalizing the workforce accordingly,
investing in new equipment, identifying and launching a single
brand, Unitron Hearing, and implementing a new information
technology system. Costs for this effort, totalling CHF 12 million,
were included in 2001/02 financial results and were reflected as
an increase in cost of sales and an increase in operating expenses.
Finally, as discussed last year, following the period of strong
growth in 2000/01, the personnel, organization and infrastructure
of the Phonak Group, particularly in marketing and sales, have
been reinforced during 2001/02 to ensure the Group’s success in
the long term. These costs became fully realized in this past
financial year.

8
Amortization of goodwill was CHF 13.2 million, up CHF 8.8 million
from last year, and reflects a full year of amortization of the
Unitron goodwill as well as the goodwill on acquisitions during the
past year. Therefore, operating profit after goodwill amortization
(EBIT) amounted to CHF 59.8 million and was thus down by 37%
compared to the previous year.
Consolidated net profit
Consolidated net profit amounted to CHF 42.6 million, compared
to CHF 65.7 million in 2000/01. The decline in net profit is directly
attributable to the decline in operating profit, as well as an
increase in interest expense. Net interest expense rose from
CHF 3.2 million to CHF 6.6 million due to a full year of the new
debt raised in connection with the Unitron and Hansaton acquisitions.
The consolidated tax rate decreased due to the recording of
deferred tax assets related to tax loss carryforwards.
Investment activity
Investment in business development activities totaled CHF 11
million during the past year. These activities included the acquisition
of a patent portfolio and the establishment of THC Finance
Ltd. and RAV Finance Inc. for the purpose of financing past and
future acquisition and other projects.
Capital expenditure (investment in property, plant and equipment)
rose to CHF 29.8 million, up 37% from last year, and consumed
46% of the cash flow from operating activities. The most significant
capital expenditure items included the NemoTech automated
shell production project, further modernization and upgrading at
the main production facility in Stäfa, implementation of IT systems
in the Stäfa and Murten, Switzerland and Minneapolis, USA,
facilities, an e-commerce project piloted at Phonak USA and the
new facility and equipment for Unitron Hearing in the United
States and in Canada.
Free cash flow
Free cash flow (defined as cash flow from operating activities
minus investments) increased CHF 82 million over last year to
CHF 18 million, due to the acquisition effect of the prior year.
Excluding the effect of the major acquisitions in the prior year,
free cash flow decreased by CHF 52 million. CHF 31 million of the
free cash flow was applied to debt reduction and CHF 9.7 million
was used for the par value reduction payment made to shareholders
in lieu of a dividend. There was a net decrease of cash and
cash equivalents during the year of CHF 12 million.
Consolidated net profit
66
60
54
48
42
36
30
24
18
12
6
0
33
30
27
24
21
18
15
12
9
6
3
0
CHF in millions in % of consolidated sales
97/98 98/99 99/00 00/01 01/02
Capital expenditure
22
20
18
16
14
12
10
8
6
4
2
0
CHF in millions in % of cash flow 1)
97/98 98/99 99/00 00/01 01/02
1) Net cash from operating activities
175
160
145
130
115
100
75
60
45
30
15
0

9
Balance sheet
The general structure and content of the balance sheet has not
changed substantially from the prior year. The acquisition of
Hansaton, in particular, has added additional goodwill and working
capital.
Accounts receivable has increased to CHF 103.6 million (previous
year CHF 92.6 million) consistent with the sales increase over the
previous year. Consolidated inventory levels have risen to CHF
105.0 million (previous year CHF 85.6 million) as a direct result of
the timing of several new product launches. Deferred tax assets
have increased to reflect the value of tax loss carryforwards
booked. Long-term debt was reduced by CHF 28.5 million and
included the first installment on the acquisition financing raised
last year. As reported in previous years, the equity financing ratio
(equity in % of total assets) has increased to 49%, reflecting the
solid financial position of the Phonak Group.
Business Report

Supero is the only digital line specifically designed for power applications.
Dedication to the special needs of people with severe or profound hearing loss
is the driving force behind these innovative digital hearing computers.
Unison –
digital for everyone

New Technologies
and Products
As in many other high-technology industries, product lifecycles
continue to shorten in our industry. At the same time, hearing
instrument technologies continue to increase in complexity and
sophistication. Therefore, there is an obvious and permanent need
to adapt both content and methodology in research, technology
and product development.

Unison is the digital hearing aid series that the
market has been waiting for. The latest member
of Unitron Hearing’s complete family of digital
hearing instrument products, this breakthrough
series takes full advantage of the many capabilities
of digital sound processing and places them
within everyone’s reach. Unison offers unparalleled
value, incorporating the advanced features
and options of higher-priced hearing instruments.
Unison is available in two models and a full range
of shell styles from Behind-the-Ear (BTE) to Completely-In-the-Canal
(CIC).
Multiple listening programs allow you to customize Unison very
simply to provide the best performance and comfort in different
listening environments.
Unison –
digital for everyone

11
Faced with the need to handle the development of more product
families in parallel, and also to develop new areas of knowledge,
the group-wide R&D activities were expanded. By the end of the
business year, a total of 177 (previous year 142) staff were
engaged in developing new knowledge, new technologies and new
products. Beyond a mere quantitative increase in our R&D program,
our R&D activities were restructured in a way to best focus
on specific topics and specific product types in the most appropriate
locations. In fact, we have developed a worldwide network of
specialized know-how centers. In our Illinois, USA advanced
research lab, we focus on fundamental themes for future generations
of products. At Phonak USA, a strong team has been
assembled to develop ITE related technologies. The successful
Murten, Switzerland activities remained focussed on wireless
technologies and long-term alternatives to traditional hearing
instruments. At Phonak headquarters in Stäfa, R&D teams are
dedicated to innovative high-end hearing instruments while in
Kitchener, Canada, our teams focus on the rapid and efficient
development of mid-range and economy digital products.
The combined R&D efforts of the Group have resulted in important
new product launches this year. Claro 111 is a special device for
high-frequency hearing losses and completes the successful line of
Claro Behind-the-Ear (BTE) instruments. The Claro 11 Completely-
In-the-Canal (CIC) device is a truly innovative semi-modular product
design. It rivals the best competitor products on aesthetics and
small size, yet remains unrivalled in its sound quality. Both models
have contributed to the further growth of our Claro top segment.
Unitron’s Nexus was also launched during the first half of the
business year yet did not achieve the sales we hoped for in the
upper middle class segment. Timing and positioning made it difficult
for the Unitron Nexus product to compete with well-established
competitors. However, both audiologically and technically,
the product was very well received in the market.
This latter fact prompted us to build Phonak’s mid-level digital
line, Aero, on the same technological platform. Introduced in Q3
as a full range of In-the-Ear (ITE) models in North American markets,
this product is highly appreciated as an extension of Phonak’s
portfolio into the middle class, already achieving sales above our
expectations.
Last but not least, Phonak has begun to incorporate market synthesizer
technology in its FM wireless communication products.
The new Campus S transmitters, with frequency selection capability,
are just the first example of a complete upgrade to the product
Business Report
line: all FM transmitters and receivers will be equipped with synthesizer
technology in the next one to two years. In addition to
the traditional FM segments, we continue to develop innovative
accessories to achieve our goal of improving the quality and convenience
of everyday life for the hearing impaired person. In 2000,
we introduced WatchPilot, the world’s only remote control for
hearing instruments in a wrist watch. In 2001, we presented our
new relay station, TelCom. This system allows various important
everyday signals from the living environment (i.e. TV, telephone,
door bell) to be radio-transmitted to a hearing instrument.
With respect to chip platforms, Phonak R&D teams focus on proprietary
solutions. Unitron R&D teams use commercially available
open digital platforms which can be used for many different products.
For example, Phonak Aero, Unitron Nexus and Axiom products
are based on the same open digital platform. Yet they are
completely different products with different specification, audiological
philosophy, different fitting principles and different professional
software. This example shows the leverage effects and synergies
which can be derived from using the same building blocks
for different products for both brands.
R&D co-operation and networking is an increasingly important
topic in general terms. The combined efforts of Phonak’s European
and American teams, together with their equivalents at Siemens
Audiologische Technik, have fostered spectacular progress. New
ways of producing custom-made ITE hearing instruments have
become a practical reality. We have developed advanced computer-aided
design tools and laser-based batch production methods
used to build hearing aid shells. Together, they will allow automated
manufacturing of individualized products in the future. When
combined with e-commerce tools, the use of this technology will
greatly rationalize the manufacture and distribution of hearing
instruments. Phonak’s version of this new technology, called
NemoTech, was very successfully presented at the German UHA
Congress in autumn 2001. It was commercially introduced into the
US market in the last quarter of 2001/02. Whereas the basic
research and technology work continues in co-operation with
Siemens, the NemoTech technology is marketed and commercialized
independently by Phonak.
Furthermore, we combine resources from the wireless technology
division, Phonak Communications, and from the hearing instrument
research group to accelerate the research and development
efforts in the field of medical devices, which will open up new,
complementary market opportunities in the future.

FM technology –
unlimited communication

Markets
Overall, unit sales in the global market remained stable in the
financial year 2001/02 compared with the prior year. This was primarily
influenced by the poor performance of the North American
market. The shift towards hearing instruments based on digital
technology continues. In unit terms, digital instruments now
account for approximately 35 to 40% of instruments sold. This
market share, especially on the mid- and economy-level, will
continue to grow.

FM technology –
When it comes to wireless communication,
Phonak has set new standards in customer benefit
with the miniaturized MicroVox and MicroLink
systems. This industry benchmarking is now being
followed by the new FM transmitter, Campus S.
This innovation, based on the latest generation
synthesizer technology, allows flexible frequency
choice and facilitates the usage of FM systems.
The first very positive feedback from the markets
is once again showing Phonak’s dominance of the
wireless communication sector. This will no doubt
continue to drive the over-proportional growth in
this product segment.
Phonak’s Campus S is an FM transmitter designed to address
real-world requirements by combining functionality, aesthetics
and convenience. Despite its small size, all functions are clearly
displayed and easy to use.
unlimited communication

13
General market development
The Phonak Group’s product portfolio is broadening to include
digital devices in these growing segments as well. Phonak’s midlevel
digital product, Aero, was launched in the latter part of this
past year and will be complemented with a Behind-the-Ear (BTE)
version in 2002/03. Also Unitron Hearing launched Axiom, a midlevel
digital hearing instrument line, this past year. In addition,
Unitron Hearing introduced Unison in April 2002, a new digital
line designed for the economy level. With this line, Unitron
Hearing now offers a complete range of digital products.
Currently, annual sales of hearing instruments total around 6 million
units. Approximately 42% of these are BTE and 58%
In-the-Ear (ITE) instruments. Of the ITE instruments, approximately
12% are miniature – or Completely-In-the-Canal (CIC) – hearing
instruments. In 2001/02, sales of ITE instruments fell slightly in
Europe while continuing to grow in North America and Asia.
Traditionally, Phonak and Unitron have occupied a strong position
in the BTE segment; however, the group’s ITE volume is increasing
as a result of its growth in the North American market and the
success of Claro CIC and Aero. For 2001/02, 40% of the group’s
unit sales were ITE and 60% were BTE, compared with 32% and
68% respectively for the prior year.
Share of sales by main markets 2001/02
By region
North America
51% (46%)
Australasia
3% (4%)
2000/01 figures in brackets
Rest of the world
7% (4%)
Europe
39% (46%)
Phonak’s international markets
The Phonak Group performed well in the key North American
market where sales, under both brands, are up 38% (acquisition
and organic growth) over the prior year period. Also, our Group
companies in Northern Europe achieved a strong sales result
(+20%), an indication of the powerful Phonak distribution network
even in the home markets of our closest competitors. Finally, we
have seen tremendous sales organic growth in Canada (+21%)
which demonstrates the further growth potential derived from
Share of sales by product groups
in %
70
60
50
40
30
20
10
0
Premium digital products
Programmable + mid-level digital products
Classical analog hearing instruments
FM products
Miscellaneous
Business Report
97/98 98/99 99/00 00/01 01/02
having two full-range brands, Phonak and Unitron Hearing,
distributed over separated channels. On the other hand, sales in
Germany, France and Switzerland fell below expectations as a
result of not having a mid-level digital product available until the
last quarter of 2001/02.
The newly acquired companies, Hansaton in Austria and Indo Laem
in Spain, have been successfully integrated into the Phonak Group.
Hansaton performed very well during its first year within the
group and achieved its sales objectives. We had completed further
development work in Spain, however, with a motivated team in
place, this organization is well positioned for a successful future.
Also this past year, we intensified our sales and marketing efforts
in the Asian markets, especially Japan and Middle East. In Japan –
with approximately 400,000 units sold annually, this is the world’s
third largest market – Phonak recently opened a sales support
office in Tokyo that provides training and marketing support to our
agent and will strengthen the network to the medical community.

Axiom –
true to life
Supero is the only digital line specifically designed for power applications.
Dedication to the special needs of people with severe or profound hearing loss
is the driving force behind these innovative digital hearing computers.

21
Operations
The Phonak Group increased the volume of hearing instruments
manufactured to a new record high of around 800,000 units.
Thanks to the ongoing successful KAIZEN process of continuous
improvement, the volume growth was achieved with a clear
under-proportional increase in direct labour at all manufacturing
sites.
Business Report

Axiom –
true to life
Axiom is the result of listening carefully to customer
needs. In addition, the expertise of researchers,
engineers, programming specialists and
hearing care professionals taught the product line
how hearing impairment and compression affect
speech and how distinct approaches are required
for noisy versus quiet environments.
The result of this careful listening is Axiom. Its
application of digital technology addresses the
complex challenges of satisfying today’s hearing
instrument wearer. As a result of the open hardware
platform, the system provides exceptional
value: upgradable through software updates as
they become available.
Axiom is a complete In-the-Ear (ITE) product line,
ranging from a virtually invisible Completely-
In-the-Canal (CIC) instrument to a full-size, highgain
ITE.
Axiom adapts to each listening situation, i.e. a lively business
meeting, a quiet walk in the woods, fishing with your grandchildren
etc.

15
The Group’s largest production center, in Stäfa, Switzerland, mastered
the high-tech production process of the newly released Claro
Completely-In-the-Canal (CIC), the world’s smallest semi-modular
hearing instrument. We were able to further reduce the size of
major components by applying 0.18 micron chip technology as
well as flip-chip assembly within a fully automated manufacturing
process.
The physical integration of the two U.S. manufacturing sites of
Unitron Hearing was completed during the year. On an on-going
basis, we will coordinate the manufacturing and logistics among
the major production sites within the Group. To date, we have
benefited from sharing technologies and improving economy of
scale in purchasing and production.
As already discussed, the new NemoTech manufacturing process
has been introduced at Phonak USA’s facility in Illinois, USA. The
expansion of this laser-based production technology is planned for
the coming year, beginning with the establishment of a centralized
NemoTech manufacturing and distribution center to provide the
new technology to all European markets.
While continuously improving the manufacturing processes, we
actively manage the entire value chain. We base our cooperation
with suppliers, or value providers, on long-term relationships
because we believe in the advantages of dedicated suppliers who
seek an open partnership and joint developments in order to shorten
design cycles and improve quality.
Business information systems
After the smooth introduction of the SAP R/3 ERP (Enterprise
Resource Planning) management system at the headquarters in
Stäfa, at the beginning of the business year under review, the first
roll-out to a further group company was achieved on April 1, 2002
at Phonak Communications in Murten. Thanks to the integrated
processes in planning, manufacturing, distribution and finance as
well as the shared hardware platform, we achieved a significantly
higher system performance while reducing our costs.
The introduction of NemoTech will allow us to improve the entire
value chain between our customers in the market and the custom
make-to-order procurement processes for In-the-Ear (ITE) instruments.
The NemoTech operating center and the sales companies
will therefore be established on a common ERP platform providing
a closer on-line link to our customers.
Employees as of March 31, 2002
By region
North America
993 (41%)
By field of activity
Marketing/Sales and
Administration
1,270 (53%)
Australasia
95 (4%)
Business Report
Europe (without
Switzerland)
691 (29%)
Research and
Development 177 (7%)
Switzerland
637 (26%)
Production
969 (40%)
Staff
The number of people employed by the Phonak Group grew by
294 to 2,416 as of March 31, 2002, as a result of our growth and
acquisition activity. This total is allocated among R&D 177 (prior
year 142), sales and marketing 901 (662), production 969 (985)
and administration and management 369 (333).

16
Outlook
The Phonak Group looks forward to positive sales and profit development
in 2002/03. As mentioned in the Shareholder Letter in
April 2002, we expect organic sales growth above 10%, fueled by
many new product launches. Economy of scale, leveraging effects
and increased efficiencies will allow Phonak to grow its profit
over-proportionately in the range of 20%. The exact amount of
sales and profit improvement will depend on our manufactoring
ability to meet the demand for the various new products,
discussed below. The timing of the new products will result in
slower sales and profit performance in the first half of the year,
followed by a stronger second half year.
For the industry as a whole, we project conservative growth rates
of 2 to 4%, in terms of units, and 3 to 5%, in value terms. However,
we expect that Phonak will outperform the market and continue
to grow its worldwide market share.
The Phonak Group will benefit in 2002/03 from its intense new
product development efforts and the launches of key product
innovations. A Behind-the-Ear (BTE) version of Aero will be
launched, thereby completing the product family, and opening up
new sales opportunities in key markets like Germany, France and
Switzerland.
Supero, the industry’s first digital product line specifically
designed and dedicated for super high power will be launched in
Q1 and Q2 of F2002/03. Its unique feature set provides a breakthrough
solution for the profound and residual hearing impaired
person. This product line, with models available in both the upper
mid-level and economy digital segments, secures Phonak’s strong
position in the high-power product segment.
This past April, Unitron Hearing presented Unison, a complete
new line of digital products in the economy-level market. The
launch of Unison, added to Nexus, a premium-level digital
product, and Axiom, a mid-level digital product, puts Unitron
Hearing in a strong market position, offering digital products in
all three segments.
Finally, later this year, Phonak will launch a new premium product
line – the next generation following Claro. This complete product
line will comprise an entire communication system: a complete
range of compact hearing instruments along with wireless
and remote control products.
In 2002/03, we will increase our investment in R&D projects to
approximately CHF 45 million (+43%). This investment will ensure
Phonak’s leading position in technology within the industry, while
achieving our goal of broadening the digital product offering in all
segments, under the Phonak and Unitron Hearing brands.
Capital expenditures will increase over the previous year, by
approximately 10%, to CHF 33 million. Major projects, in addition
to the R&D projects, include new product platforms, further
automation of production facilities and the implementation of
IT systems.

18 Consolidated Income Statement
19 Consolidated Balance Sheet
20 Consolidated Statement of Cash Flows
21 Summary of Changes in Shareholders’ Equity
22 Notes to the Consolidated Financial Statements
46 Report of the Group Auditors
Consolidated Financial Statements
17

Consolidated Income Statement 2001/02
2001/02 2000/01
Notes 1,000 CHF 1,000 CHF
Consolidated sales 4 576,078 460,152
Sales related costs 5 (33,337) (28,803)
Cost of sales (246,914) (175,198)
Gross profit 295,827 256,151
Research and development (31,453) (31,381)
Marketing and sales (124,408) (80,681)
Administration and general overheads (70,097) (52,627)
Exchange differences 3,596 7,187
Other (expenses) / income, net 9 (452) 1,143
Operating profit (EBITA) 73,013 99,792
Amortization of goodwill 8 (13,243) (4,482)
Operating profit (EBIT) 59,770 95,310
Financial expense, net 10 (6,616) (3,158)
Income before deduction of taxes and minority interests 53,154 92,152
Income taxes 11 (10,408) (26,102)
Minority interest in net income (120) (333)
Income after taxes 42,626 65,717
Basic earnings per share (CHF/share) 12 0.6577 1.0389
Diluted earnings per share (CHF/share) 12 0.6557 1.0261
18

Consolidated Balance Sheet at March 31, 2002
Consolidated Financial Statements
Assets
31.3.2002 31.3.2001
Notes 1,000 CHF 1,000 CHF
Cash and cash equivalents 14 73,046 85,397
Marketable securities 10,564 10,711
Trade receivables 15 103,573 92,616
Other receivables and prepayments 16 14,738 12,289
Inventories 17 104,953 85,555
Total current assets 306,874 286,568
Land and buildings 18 68,535 70,085
Plant and equipment 18 61,379 49,322
Total tangible assets 129,914 119,407
Investments in associates 19 0 0
Other investments and long-term loans 20 7,925 47,577
Deferred tax assets 11 52,096 34,011
Intangible assets 21 241,661 213,778
Retirement benefit assets 29 3,776 2,452
Total non-current assets 435,372 417,225
Total assets 742,246 703,793
Liabilities and shareholders’ equity
31.3.2002 31.3.2001
Notes 1,000 CHF 1,000 CHF
Short-term debts 22 33,864 32,687
Trade payables 33,299 31,380
Taxes payable 27,614 18,635
Other liabilities and provisions 23 83,647 75,877
Total current liabilities 178,424 158,579
Mortgages 24 39,748 42,504
Other long-term debts 25 131,788 160,263
Deferred tax liabilities 11 22,685 17,607
Other provisions 26 7,742 1,392
Total long-term liabilities 201,963 221,766
Total liabilities 380,387 380,345
Minority interests 1,038 543
Share capital 27 3,260 12,937
Capital reserves 130,544 121,198
Treasury shares (3,920) (3,969)
Retained earnings 231,808 189,182
Cumulative translation adjustment (871) 3,557
Total shareholders’ equity 360,821 322,905
Total liabilities and shareholders’ equity 742,246 703,793
19

Consolidated Statement of Cash Flows 2001/02
2001/02 2000/01
Notes 1,000 CHF 1,000 CHF
Profit after taxes 42,626 65,717
Non cash items
Depreciation of tangible assets 18 18,475 13,245
Amortization of intangible assets 21 13,571 4,480
Write-down of other investments 550 220
Loss on sale of tangible assets, net 9 1,206 227
Minority interest in net income 120 333
Share of loss of associates 0 185
Change in deferred taxes, net 11 (9,948) (6,173)
Change in other long-term provisions, net 1,342 25,316 (2,820) 9,697
Cash flow before changes in working capital 67,942 75,414
Changes in net current assets and liabilities
(Increase) in trade receivables (7,455) (11,145)
Decrease / (increase) in other receivables and prepayments 755 (1,534)
(Increase) in inventories (18,961) (4,559)
Increase / (decrease) in trade payables 690 (2,768)
Increase in taxes payable 8,006 13,940
Increase in other payables and accruals 6,559 (10,406) 22,106 16,040
Net cash from operating activities 57,536 91,454
Purchase of tangible assets 18 (29,794) (21,842)
Proceeds from sale of tangible assets 1,228 900
Acquisition of subsidiaries (net of cash acquired) 28 (6,765) (109,272)
Sale of subsidiaries (net of cash sold) 39 0
Acquisition of minority interests 0 (632)
Purchase of other intangible assets 21 (4,408) 0
Decrease / (increase) in other investments, net 574 (23,829)
Net cash used in investing activities (39,126) (154,675)
Decrease in marketable securities 147 0
(Decrease) / increase in short-term debts, net (802) 4,029
(Decrease) in mortgages (2,688) (2,626)
(Decrease) / increase in other long-term debts, net (27,636) 119,508
Proceeds of capital increases 9,417 4,239
Sale / (Acquisition) of treasury shares 49 (2,771)
Dividend paid by Phonak Holding Ltd. 0 (7,561)
Par value repayment by Phonak Holding Ltd. (9,748) 0
Prepayment made to pension fund (1,324) 0
Dividends paid to minorities (138) (54)
Net cash from financing activities (32,723) 114,764
Currency translation differences 1,962 (3,400)
(Decrease) / increase in cash and cash equivalents (12,351) 48,143
Cash and cash equivalents per April 1 85,397 37,254
Cash and cash equivalents per March 31 73,046 85,397
Additional details: • interest paid 8,514 4,640
• taxes paid 13,363 18,402
20

Summary of Changes in Shareholders’ Equity
Consolidated Financial Statements
Share Capital Retained Cumulative Treasury Total
capital reserves earnings translation shares shareholders’
1,000 CHF adjustment equity
Balance April 1, 2000
Changes in
12,618 36,488 131,731 3,200 (1,198) 182,839
accounting policies
Capital increases of
Phonak Holding Ltd.
(705) (705)
from conditional capital 58 4,181 4,239
from authorized capital 1)
261 80,529 80,790
Acquisition of treasury shares
Dividend paid
(2,771) (2,771)
by Phonak Holding Ltd. (7,561) (7,561)
Consolidated net income
Currency translation
65,717 65,717
differences 357 357
Balance March 31, 2001
Capital increases of
Phonak Holding Ltd.
12,937 121,198 189,182 3,557 (3,969) 322,905
from conditional capital
Par value repayment
71 9,346 9,417
by Phonak Holding Ltd. (9,748) (9,748)
Disposal of treasury shares 49 49
Consolidated net income
Currency translation
42,626 42,626
differences (4,428) (4,428)
Balance March 31, 2002 3,260 130,544 231,808 (871) (3,920) 360,821
1)
Used as partial purchase price for the acquisition of the Unitron Group (see also Note 28) and as partial purchase price prepayment for
the acquisition of Hansaton (see also Note 28).
The aggregate gains and losses recognized directly in equity amount to a loss of CHF 4,428,000 in the year
ended March 31, 2002 (a gain of CHF 357,000 in 2001).
Definition of the different categories of shareholders, equity recognized in the Phonak Group:
• Share capital is the share capital of the parent company Phonak Holding Ltd.
• Capital reserves represent the share premiums arising out of the capital increases of Phonak Holding Ltd.
• Retained earnings comprise the undistributed profits of group companies and all other reserves including
adjustments arising on consolidation.
• Treasury shares comprise the repurchased shares of Phonak Holding Ltd. at their respective acquisition costs.
21

Notes to the Consolidated Financial Statements at March 31, 2002
1. Corporate information
The Phonak Group (the “Group”) is involved in the development, manufacture and distribution of hearing
systems and related products for the hearing impaired. The Group operates world-wide and distributes its
products through its own distribution network in the major industrial countries and through independent representatives
in over 60 other countries. The ultimate parent company is Phonak Holding Ltd., a limited liability
company incorporated in Switzerland. Phonak Holding Ltd.’s registered office is located at Laubisrütistrasse 28,
CH-8712 Stäfa, Switzerland.
2. Basis of the consolidated financial statements
The consolidated financial statements of the Phonak Group are based on the financial statements at March 31
of the individual Group companies prepared in accordance with uniform policies. The consolidated financial
statements have been prepared on a historical cost basis except for the measurement at market value of
financial instruments and comply with International Accounting Standards (IAS). The consolidated financial
statements were approved by the Board of Directors of Phonak Holding Ltd. on May 30, 2002.
During the year, the following Standards have been adopted for the first time:
• IAS 19 (revised 1998, amended 1999 and 2000) Employee Benefits
• IAS 39 (revised 1999, amended 2000) Financial Instruments – Recognition and Measurement
• IAS 40 (2000, amended 2001) Investment Property
The Group has considered the impact of the first application of IAS 40, effective on April 1, 2001, and has
come to the conclusion that such application does not require any changes.
The preparation of financial statements requires management to make estimates and assumptions that affect
the amounts reported for assets and liabilities and contingent assets and liabilities at the date of the financial
statements as well as revenue and expenses reported for the period. Actual results could differ from these
estimates.
2.1 Changes in accounting policies
Several revised or new standards issued by the International Accounting Standards Committee and interpretations
of the Standing Interpretations Committee became effective on or before April 1, 2001. The principal
items affecting the Group are the Standards IAS 19 on “Employee benefits” and IAS 39 on “Financial instruments
– recognition and measurement”. The effects of implementing these standards are described in Note 2.6
“Accounting and valuation principles”. The standards have been implemented by applying transition rules as
described in IAS 19 and 39, respectively.
As of April 1, 2001, the income statement has been prepared using the operational format rather than the type
of expenditure format and the prior year comparative numbers have been restated accordingly.
2.2 Basis of consolidation
The consolidated financial statements include the financial statements of Phonak Holding Ltd. as well as the
domestic and foreign subsidiaries in which Phonak Holding Ltd. holds directly or indirectly more than 50% of
the share capital. These companies have been fully consolidated in the consolidated financial statements.
Minority investments in associated companies (generally investments between 20% and 50%) are consolidated
using the equity method. A list of the significant consolidated companies is given in Note 37.
22

Consolidated Financial Statements
2.3 Principles of consolidation
Under the full consolidation method, 100% of assets, liabilities, income and expenses are included.
The interests of minority shareholders in equity and net income are shown separately in the balance sheet and
income statement. The Group’s share of equity in those companies consolidated using the equity method is
shown in the balance sheet as “Investments in associates,” and its share in the net income for the year is
shown in the income statement as “Earnings of associates accounted for by the equity method”.
Group companies acquired during the year are included in the consolidation from the date of acquisition, and
companies disposed of excluded as of the date of disposal.
Intercompany receivables, liabilities, expenses and income are eliminated. Unrealized profit on intercompany
inventories is eliminated.
2.4 Goodwill
The assets and liabilities of newly acquired Group companies are revalued at the estimated fair values at the
date of acquisition. The difference between the purchase price and the revalued net assets represents goodwill.
Goodwill is capitalized and amortized on a straight line basis over its expected economic useful life, not
exceeding a maximum of 20 years. Goodwill denominated in foreign currencies is translated into Swiss francs
at the exchange rate applicable at year-end.
2.5 Currency translation
The consolidated financial statements are expressed in Swiss francs (“CHF”). The functional currency of each
group company is the applicable local currency.
Monetary assets and liabilities of Group companies which are denominated in foreign currencies are translated
using year-end exchange rates. Transactions in foreign currencies are accounted for at the rates prevailing at
the dates of the transactions. The resulting exchange differences are recorded in the local income statements
of the Group companies and included in net income.
When translating foreign currency financial statements into Swiss francs, year-end exchange rates are applied
to assets and liabilities, while average annual rates are applied to income statement accounts. Translation differences
arising from this process are recorded in a separate component of shareholders’ equity. On disposal of
a subsidiary, the related cumulative translation adjustment is transferred from shareholder’s equity and included
in the gain or loss on disposal in the statement of income.
2.6 Accounting and valuation principles
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, postal checking and bank account balances and time
deposits with an original maturity of 3 months or less.
Trade receivables
Trade receivables are recorded at nominal value. Provision is made for doubtful accounts.
Inventories
Purchased raw materials, components and finished goods are valued at the lower of cost (usually average cost)
or net realizable value. Manufactured finished goods and work-in-process are valued at the lower of production
cost or net realizable value. The main elements of production cost are materials, direct labor and an allocation
of production overhead expense.
23

Tangible assets
Tangible assets (land, buildings, plant and equipment) are valued at purchase or manufacturing cost less accumulated
depreciation. Depreciation is calculated on a straight line basis over the expected useful lives of the
individual assets or asset categories. The applicable useful lives are 25–40 years for buildings, and 3–10 years
for production facilities, machinery, equipment and vehicles. Land is not depreciated.
Assets that are held under leases which effectively transfer to the Group the risk and rewards of ownership
(finance leases) are capitalized and depreciated over their estimated useful life, as defined above. The corresponding
liabilities are classified as “short-term debts” or “other long-term debts”, depending on whether they
are payable within or after 12 months.
Expenditures for repair and maintenance which do not increase the estimated useful lives of the related assets
are recognized as an expense in the period in which they are incurred.
Intangible assets
Intangible assets are comprised of goodwill arising on acquisitions and patents. Intangible assets are amortized
on a straight line basis over the expected useful life, not exceeding 20 years (see also Note 2.4).
Short-term debts
Short-term debts consist of short-term bank debts and all other interest bearing debts with a maturity of
12 months or less.
Income taxes
Full provision is made for taxes which are to be paid on taxable profits of the individual Group companies.
Deferred tax is provided on the valuation differences (temporary differences) between the tax bases of assets
and liabilities and their carrying values in the consolidated balance sheet. Deferred tax assets relating to tax
loss carryforwards are recognized only to the extent that it is probable that taxable income will be available
against which the tax losses can be offset.
Provision is made for non-recoverable withholding taxes only on anticipated dividend distributions from subsidiaries.
No provision is made in respect of possible future dividend distributions from undistributed earnings,
as these are generally reinvested.
Revenue recognition
Consolidated sales represent invoiced sales to third parties excluding sales taxes and net of returns. Revenue
from long-term service contracts is recognized on a pro rata basis over the contract period.
Research and development costs
The majority of research and development costs are expensed as incurred. The R&D costs for 2001/2002
amounted to CHF 31.5 million (previous year CHF 31.4 million). In addition to the internal costs (direct personnel
and other operating costs, depreciation on R&D equipment and allocated occupancy costs), total costs also
include externally contracted R&D work amounting to CHF 8.4 million (previous year CHF 12.0 million).
Impairment
If there are indications that the carrying values of tangible assets, the investments in associated companies,
goodwill or other intangible assets have been impaired, an impairment loss is recorded in order to reduce the
respective assets to their recoverable amounts. The recoverable amount is based upon the present value of the
future cash flows which the asset is expected to generate.
24

Consolidated Financial Statements
Related parties
Related parties are defined to include the main shareholders and members of the Board of Directors of Phonak
Holding Ltd. and Group management. All transactions with related parties are conducted on an arms-length
basis. No related party exercises control over the Group.
Employee benefits (IAS 19)
Pension obligations
Certain Group companies have pension plans in addition to the mandatory local statutory social security plans.
Such plans are defined contribution plans (future benefits are determined by reference to the amount of contributions
paid) and are generally administered by autonomous pension plans or independent insurance companies.
The pension plans are financed through employer and employee contributions.
Phonak Holding Ltd.’s pension fund, in which the Swiss Group companies Phonak Ltd., Phonak Switzerland Ltd.
and Phonak Communications Ltd. also participate, is treated as a defined benefit plan. Pension costs are
assessed using the projected unit credit method: the cost of providing pensions is charged to the income
statement so as to spread the regular cost over the service lives of employees participating in these plans, in
accordance with the advice of the actuaries who carried out a full valuation of the plans in 2001. The pension
obligation is measured as the present value of the estimated future outflows using interest rates of government
securities which have terms to maturity approximating the terms of the related liability.
Actuarial gains and losses are recognized over the average remaining service periods of employees participating
in these plans as income or expense when the cumulative unrecognized actuarial gains or losses for
each individual plan exceed 10% of the defined benefit obligation and the fair value of plan assets.
Prior to the adoption of IAS 19, the costs of post retirement benefits other than pensions were recognized
when paid.
The transitional asset on initial adoption of the revised Standard was CHF 913,000 less than the asset that
would have been recognized at the same date under the previous accounting method. This amount, net of
deferred taxes, was recognized directly in retained earnings on April 1, 2000.
Other long-term benefits
Other long-term benefits comprise mainly length of service compensation which certain subsidiary companies
are required to provide in accordance with legal requirements in the respective countries. These benefits are
accrued, and the corresponding liabilities are included under “Other provisions”.
Equity compensation benefits
A certain number of options on the shares of Phonak Holding Ltd. are granted annually to members of the
Board of Directors of Phonak Holding Ltd., Group executive management as well as management and senior
employees of other Group companies. The option grants are subject to the condition that the respective
employees have been employed by the Phonak Group for a period of at least two years. No costs are recognized
in the consolidated financial statements for options granted to employees, as the strike price normally
equals the average market value during the three months prior to the month granted (see also Note 31).
25

Financial Instruments (IAS 39)
The new Standard, including amendments, was implemented on April 1, 2001. In accordance with the transition
arrangements of the standard, the corresponding prior year financial statements were not restated.
IAS 39 requires investment securities, other than fixed maturity investment securities that the Group has the
intent and ability to hold to maturity, to be carried at fair value. Prior to the adoption of IAS 39, the Group
carried listed investment securities at market value and unlisted investment securities were carried as noncurrent
investments at cost. The introduction of IAS 39 did not result in an impact on the opening retained
earnings at April 1, 2001.
The Group is exposed to the following financial risk categories:
Interest rate risk
Interest rate risk relates primarily to long-term interest bearing liabilities. The Group’s mortgages as well as a
portion of the other long-term debts represent long-term fixed-rate contracts, which minimize the risk of
changing interest rates. The remainder of the long-term debts (entered into during the business year 2001/02)
are currently subject to money market rates. The interest situation and hedging possibilities are continuously
monitored. Derivative instruments are not currently being used to hedge against changes in interest rates.
Exchange rate risk
The Group buys and sells products in foreign currencies and is therefore exposed to exchange rate risks. To
minimize foreign currency exchange risks, in particular relating to intercompany sales and the settlement of
intercompany loans, forward currency contracts are entered into. These contracts do not qualify for treatment
as hedges under IAS 39, and accordingly exchange losses and gains on forward currency contracts are recognized
in the determination of net income.
Concentration risk
Financial instruments which could expose the Group to a potential concentration risk are principally cash and
bank balances and trade receivables. Banking relations are maintained only with first-class financial institutions.
The Group performs continuous credit checks on its customers and is not exposed to any significant concentration
risks.
Financial assets and liabilities
Financial assets and liabilities, principally cash and bank balances, securities, trade receivables, trade payables,
mortgage liabilities and other long-term debts, are classified as either “Held-for-trading”, “Available-for-sale”,
“Held-to-maturity” or “Originated by the Group”. Held-for-trading investments (mainly marketable securities)
are acquired principally to generate profit from short-term fluctuations in price. Held-to-maturity investments
are securities with a fixed maturity that the Group has the intent and ability to hold until maturity. Investments
originated by the Group are loans and other long-term financial assets created by the Group. All other
investments are considered as available-for-sale.
All investments are initially recorded at cost, including transaction costs. All purchases and sales are recognized
on the settlement date. Held-for-trading and Available-for-sale investments are subsequently carried at
fair value, with all changes in fair value recorded as financial income (expense) in the period in which they
arise. Held-to-maturity investments are subsequently carried at amortized cost using the effective interest rate
method.
26

Consolidated Financial Statements
Derivatives
All derivative financial instruments are initially recorded at cost, including transaction costs. All purchases
and sales are recognized on the settlement date. Derivatives are subsequently carried at fair value. All changes
in fair value are recorded as financial income (expense) in the period in which they arise. Gains or losses from
derivative financial instruments used for trading purposes are taken to income as they arise.
Hedging
The Phonak Group does not enter into any hedges that qualify for hedge accounting under IAS 39.
3. Changes in Group Structure
During 2001/02, the following companies were included in the consolidation for the first time:
• Hansaton Akustische Geräte GmbH, Austria (100% interest purchased as of April 1, 2001)
• RAV Finance Inc., USA (founded in July 2001)
• THC Finance Ltd., Bermuda (founded in July 2001)
During 2001/02, Phonak Marketing International Ltd. has been disposed of and therefore has been excluded
from the consolidation as of December 31, 2001.
27

4. Segment information
The Group is active in only one segment: the development, production, distribution and service of hearing
instruments and related products. The primary segment information is presented according to geographical
regions, which also correspond to the organisational structure. Transactions between segments are generally
conducted at market rates.
Europe North America
1,000 CHF 2001/02 2000/01 2001/02 2000/01
Sales
Third parties 245,109 225,914 311,179 217,371
Sales within the same segment 35,668 0 16,350 0
Intersegment sales 182,588 188,984 5,045 0
Total sales 463,365 414,898 332,574 217,371
Segment result 103,074 109,295 (14,077) 14,118
Share of loss of unconsolidated associates 0 (185) 0 0
Operating profit (EBIT) 103,074 109,110 (14,077) 14,118
Financial expense, net
Profit before taxes and minority interests
Taxes
Minority interests in net profit
Consolidated net profit
Total assets 1,053,928 773,627 516,805 310,451
Total liabilities 637,380 420,782 287,436 226,120
Other information:
Investments in tangible and intangible assets 18,714 31,429 19,906 183,622
Depreciation on tangible assets 13,880 10,928 4,113 2,026
Depreciation on intangible assets
and write-offs of other investments 4,971 2,402 9,150 2,290
28

Australasia Eliminations / Total
Other
2001/02 2000/01 2001/02 2000/01 2001/02 2000/01
19,790 16,867 0 0 576,078 460,152
0 0 (52,018) 0 0 0
16,590 14,159 (204,223) (203,143) 0 0
36,380 31,026 (256,241) (203,143) 576,078 460,152
5,171 5,313 (34,398) (33,231) 59,770 95,495
0 0 0 0 0 (185)
5,171 5,313 (34,398) (33,231) 59,770 95,310
(6,616) (3,158)
53,154 92,152
(10,408) (26,102)
(120) (333)
42,626 65,717
17,576 14,457 (846,063) (394,742) 742,246 703,793
9,967 8,609 (554,396) (275,166) 380,387 380,345
449 583 0 0 39,069 215,634
482 291 0 0 18,475 13,245
0 8 0 0 14,121 4,700
Consolidated Financial Statements
29

5. Sales related costs
These consist of expenditures which relate directly to sales revenue, such as cash discounts, year-end
rebates, third-party sales commissions, outward freight costs and bad debts.
6. Consolidated Income Statement 2001/02 by type of expenditure
Effective April 1, 2001, the income statement has been prepared using the operational format rather than
the type of expenditure format and the prior year comparative numbers have been restated accordingly. For
comparative reasons, the income statement by type of expenditure is presented below.
2001/02 2000/01
Notes 1,000 CHF 1,000 CHF
Consolidated sales 4 576,078 460,152
Sales related costs 5 (34,402) (30,555)
Changes in finished goods and
work in progress 137 4,171
Own work capitalized 4,693 1,979
Share of loss of unconsolidated associates 0 (185)
Other operating income 353 90
Operating income 546,859 435,652
Direct material costs (166,422) (105,528)
Personnel expenses (176,785) (128,007)
Other operating expenses (114,077) (97,133)
Depreciation and amortization 8 (32,596) (17,945)
Exchange difference 3,596 7,219
Other operating (expense) / income, net (805) 1,052
Operating profit (EBIT) 59,770 95,310
Financial expense, net 10 (6,616) (3,158)
Profit before deduction of taxes
and minority interests 53,154 92,152
Taxes 11 (10,408) (26,102)
Minority interests, share of profit (120) (333)
Consolidated net profit 42,626 65,717
Basic earnings per share (CHF/share) 12 0.6577 1.0389
Diluted earnings per share (CHF/share) 12 0.6557 1.0261
30

7. Financial instruments
Consolidated Financial Statements
The group adopted IAS 39 at April 1, 2001. As a result of the adoption of IAS 39, there was no impact
on shareholder´s equity or any balance sheet captions at that date. In accordance with IAS 39, the
comparative financial statements for the year ended March 31, 2001 are not restated. The net fair
value of derivative financial instruments at March 31 were:
2001/02 2000/01
1,000 CHF 1,000 CHF
Contracts with positive fair value 37 685
Contracts with negative fair value (55) 0
Total (18) 685
The unsettled contracts at March 31, 2002, have a nominal book value of CHF 173.6 million (previous year
CHF 22.6 million) and a fair value of CHF 173.6 million (previous year CHF 21.9 million).
8. Depreciation and amortization
2001/02 2000/01
1,000 CHF 1,000 CHF
Depreciation on tangible assets
Land and buildings 2,211 1,918
Plant and equipment 16,264 11,327
Total 18,475 13,245
Amortization of goodwill 13,243 4,480
Amortization of other intangible assets 328 0
Write-down of other investments 550 220
Total 32,596 17,945
9. Other (expenses)/income, net
2001/02 2000/01
1,000 CHF 1,000 CHF
Loss on disposal of tangible assets, net (1,206) (227)
Other expenses (1,621) 1,258
Non-recurring expenses 1,208 (60)
Non-recurring income 189 82
Other operating expense 353 90
Income from non-consolidated investments 625 0
Total (452) 1,143
Other (expenses) / income comprise non-recurring items which are incurred in the ordinary course of
business.
31

10. Financial expense, net
2001/02 2000/01
1,000 CHF 1,000 CHF
Interest income 2,053 1,328
Securities (loss) / income, net (155) 154
Total financial income 1,898 1,482
Mortgage interest (1,740) (1,840)
Leasing interest (finance leases) (14) (4)
Other interest expense, net (6,760) (2,796)
Total interest expense (8,514) (4,640)
Total financial expense, net (6,616) (3,158)
11. Taxes
2001/02 2000/01
1,000 CHF 1,000 CHF
Income taxes 20,356 32,275
Change in deferred taxes (9,948) (6,173)
Total 10,408 26,102
Reconciliation of tax expense
Net profit before taxes 53,154 92,152
Weighted average expected tax rate 1)
10.03% 25.55%
Tax at weighted average rate
+/- effects of
5,329 23,541
non tax deductible expenses 4,305 1,832
non capitalized tax loss carry forwards and current year losses (net) 289 (45)
tax concessions 2)
0 (579)
change in tax rates on deferred tax balances 1,253 14
prior year expense and other items 3)
(768) 1,339
Total tax expense 10,408 26,102
as a % of consolidated net profit before taxes 19.6% 28.3%
1) The expected Group tax rate is the aggregate obtained by applying the currently effective rate for each individual jurisdiction to its
respective result before taxes. The lower tax rate in 2001/02 reflects losses that have been incurred in certain group companies in higher
tax rate jurisdictions.
2) In connection with an economic incentive program, one subsidiary company is subject to a reduced tax rate for a limited time period.
3) “Prior year expense and other items” includes non-refundable foreign withholding taxes of CHF –407,000 (prior year CHF 1,113,000).
32

Consolidated Financial Statements
Composition of deferred tax assets and liabilities
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Assets Liabilities Assets Liabilities
Tax loss carry forwards 21,812 231 9,599 0
Allowance for doubtful receivables 1,722 677 1,990 292
Prepayments 0 1,284 0 775
Inventories 7,638 2,780 9,976 2,563
Tangible assets 603 9,813 152 9,514
Intangible assets 3,524 2,585 314 457
Leasing liabilities 15 0 15 2
Short-term provisions 13,665 578 9,039 98
Long-term provisions 2,909 4,737 2,524 3,906
Other items 208 0 402 0
Deferred taxes 52,096 22,685 34,011 17,607
Deferred tax assets have been capitalized based on the projected future performance of the group companies,
supplemented with tax planning opportunities. The tax loss carryforwards expire between 2005 and
2022. The tax loss carryforwards for which no deferred tax assets have been recognized in the balance sheet
are not significant.
12. Earnings per share
The basic earnings per share are calculated by dividing the consolidated net profit by the weighted average
number of shares outstanding (net of treasury shares) during the period. For the current business year, the
weighted average number of shares outstanding amounted to 64,808,282 shares (previous year 63,257,400
shares). The diluted earnings per share considers the dilutive effect which could arise upon the possible
exercise of all outstanding options. The weighted average number of shares used to determine the diluted
earnings per share was 65,009,377 shares (previous year 64,045,200 shares).
13. Dividends per share
The Board of Directors of Phonak Holding AG proposes to the General Meeting to be held on July 11, 2002
that a dividend of CHF 0.12 per share be distributed.
14. Cash and cash equivalents
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Cash on hand 4,963 191
Postal checking and current bank accounts 43,114 53,923
Time deposits 24,919 31,275
Payments in transit 50 8
Total 73,046 85,397
33

15. Trade receivables
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Accounts receivable 111,377 100,734
Provision for doubtful debts (7,804) (8,118)
Total 103,573 92,616
16. Other receivables and prepayments
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Other receivables 9,231 9,098
Prepayments 5,507 3,191
Total 14,738 12,289
The largest individual items included in other receivables are recoverable withholding taxes on interest and
dividend income, recoverable value added taxes, and advances to suppliers. Prepayments comprise mainly
prepaid operating expenses.
17. Inventories
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Raw materials and components 56,550 35,204
Work-in-process 16,616 13,753
Finished products (incl. purchased goods) 47,768 49,640
Allowances (15,981) (13,042)
Total 104,953 85,555
34

18. Tangible assets
Consolidated Financial Statements
Total Total
land & Plant & fixed assets
1,000 CHF Land Buildings buildings equipment 31.3.2002 31.3.2001
Cost
Balance April 1 9,790 76,832 86,622 114,583 201,205 159,831
Change in Group companies 101 358 459 6,227 6,686 24,697
Additions 0 1,166 1,166 28,628 29,794 21,842
Disposals 0 (198) (198) (11,900) (12,098) (4,253)
Exchange differences (162) (729) (891) (2,057) (2,948) (912)
Balance March 31 9,729 77,429 87,158 135,481 222,639 201,205
Accumulated depreciation
Balance April 1 0 16,537 16,537 65,261 81,798 55,503
Change in Group companies 0 148 148 3,688 3,836 16,916
Additions 0 2,211 2,211 16,264 18,475 13,245
Disposals 0 (57) (57) (9,607) (9,664) (3,126)
Exchange differences 0 (216) (216) (1,504) (1,720) (740)
Balance March 31 0 18,623 18,623 74,102 92,725 81,798
Net book value
Balance April 1 9,790 60,295 70,085 49,322 119,407 104,328
Balance March 31 9,729 58,806 68,535 61,379 129,914 119,407
The additions to plant and equipment comprise CHF 12.8 million (previous year CHF 7.7 million) for production
facilities and machines, CHF 14.7 million (previous year CHF 12.2 million) for tools and office equipment,
and CHF 1.1 million (previous year CHF 1.6 million) for motor vehicles. The tangible assets (buildings,
plant and equipment) are insured against fire at a value of CHF 192.7 million (previous year
CHF 177 million). Plant and equipment includes assets held under financial leases with the following values:
• cost CHF 1.9 million (previous year CHF 2.1 million)
• net book value CHF 0.7 million (previous year CHF 0.8 million)
The corresponding leasing liabilities amount to CHF 0.6 million (previous year CHF 0.8 million).
19. Investments in associates
Investments in associates relate to a 25% investment in the software development company HIMSA A/S
(a joint-venture with three Danish hearing instrument manufacturers). The company closed its fiscal year
2001 with a loss. The Group's pro-rata share in that loss of CHF 0.17 million amounts to CHF 0.04 million.
The Group’s share in losses at March 31, 2002 was not recognized as the investment value has been reduced
to zero in 2000/01 and the Group has no commitments to provide further equity financing.
35

20. Other investments and long-term loans
31. 3.2002 31. 3.2001
1,000 CHF 1,000 CHF
Other investments 3,810 5,527
Prepayment of purchase price for subsidiary 0 40,075
Other long-term loans 4,115 1,975
Total 7,925 47,577
The other investments consist mainly of a minority interest in the Danish patent holding company K/S
HIMPP (Hearing Instrument Manufacturers Patent Partnership), in which Phonak and Unitron have invested
together with other leading hearing instrument manufacturers and which is classified as available for sale under
IAS 39. Other long-term loans comprise a loan arising from the sale of an investment of the Unitron Group
during 1999.
21. Intangible assets
Goodwill Other intangibles Total Total
31. 3.2002 31. 3.2001
1,000 CHF 1,000 CHF
Cost
Balance April 1 224,720 0 224,720 36,489
Additions 45,387 4,408 49,795 186,011
Exchange differences (8,639) 0 (8,639) 2,220
Balance March 31
Accumulated depreciation
261,468 4,408 265,876 224,720
Balance April 1 10,942 0 10,942 6,552
Amortization for the year 13,243 328 13,571 4,480
Exchange differences (298) 0 (298) (90)
Balance March 31
Net book value
23,887 328 24,215 10,942
Balance April 1 213,778 0 213,778 29,937
Balance March 31
Goodwill is being amortized over 20 years.
237,581 4,080 241,661 213,778
22. Short-term debts
31. 3.2002 31. 3.2001
1,000 CHF 1,000 CHF
Bank debts 5,162 2,040
Current maturities of long-term debts 28,702 30,647
Total 33,864 32,687
The current maturities of long-term debts consist of amounts falling due in the next 12 months in respect
of mortgage repayments of CHF 2.8 million (previous year CHF 2.7 million) and other long-term debts of
CHF 25.9 million (previous year CHF 27.9 million).
36

23. Other liabilities and provisions
31. 3.2002 31. 3.2001
1,000 CHF 1,000 CHF
Other payables 9,440 9,231
Accruals and short-term provisions 60,826 64,240
Deferred income 13,381 2,406
Total 83,647 75,877
Other payables include amounts to be remitted in respect of sales taxes, value added taxes, social security
payments, employees' income taxes deducted at source and customer prepayments. Accruals and short-term
provisions include, among other items, short-term portion of warranty accrual, accrued vacation, compensation
payable, bonuses based on earnings and customer sales rebates.
24. Mortgages
Consolidated Financial Statements
31. 3.2002 31. 3.2001
1,000 CHF 1,000 CHF
Analysis by currency
Swiss Francs 38,400 40,700
Euro 893 1,222
Danish Crowns 455 508
Canadian Dollars 0 74
Total 39,748 42,504
Of which maturing beyond 5 years 25,742 28,184
The above-mentioned mortgages are all secured by lien on the related real estate. Principal amounts bear
interest at the following rates per annum: CHF 15.4 million at 3.5%, CHF 8.0 million at 3.8%, CHF 4.0 million
at 3.88%, CHF 4.0 million at 4.20%, CHF 2.0 million at 4.25%, CHF 5.0 million at 5.25% and the remainder
at 4.99% to 10.00%. The major portion of the Swiss franc mortgages are repaid in annual instalments
representing 5% of the principal amount.
37

25. Other long-term debts
31. 3.2002 31. 3.2001
1,000 CHF 1,000 CHF
Bank loans 130,658 156,776
Loans from supplier 930 1,690
Other 200 1,797
Total 131,788 160,263
Analysis by currency
Swiss Francs 117,799 141,400
Euro 13,058 15,893
Canadian Dollars 931 2,487
Danish Crowns 0 409
Australian Dollars 0 72
New Zealand Dollars 0 2
Total 131,788 160,263
Of which maturing beyond 5 years 4,306 54,380
Long-term debts denominated in Swiss francs relate to bank loans obtained to finance the purchase of the
Unitron and Hansaton subsidiaries. These loans bear interest at LIBOR + 0.5% (2.34667% at March 31,
2002) and are scheduled for repayment semi-annually over seven years (until December 31, 2007). The debt
in Euro relates to two long-term bank credits which are repayable in annual instalments with a final
maturity date of 2008 (for the purchase of Lapperre BHAC NV during the 1996/97 business year) and in
monthly instalments through the year 2018 (for the purchase of the hearing instrument sales facilities
during the 1997/98 business year). Of these loans, the equivalent of CHF 4.8 million bear interest at the
short-term money market rate (currently 3.6%) and CHF 8.1 million at the long-term capital market rates
(fixed rates for 5 years and 10 years of 5.955% and 5.56% respectively). Long-term debts based in Canadian
dollars represent largely a non-interest bearing loan from a supplier which will mature by December 31, 2006.
38

26. Other provisions
Provisions Provisions Provisions Deferred Others Total
for product for employee for severance income provisions
warranties benefits allowances 31.3.2002 31.3.2001
Balance April 1, 2001 4,862 192 99 0 129 5,282 4,367
Changes in Group companies 4,609 187 737 0 0 5,533 998
Amounts used (164) (87) 0 0 0 (251) (409)
Reversals (716) 0 0 0 (57) (773) (1,008)
Increases 3,017 115 137 2,535 66 5,870 1,411
Exchange differences (475) (7) (5) 0 (3) (490) (77)
Less: Short-term portion
of warranty (7,429) 0 0 0 0 (7,429) (3,890)
Balance March 31, 2002 3,704 400 968 2,535 135 7,742 1,392
On average, Phonak grants a 15-month warranty period for its products. During this period, products will be
repaired or replaced free of charge. The provision is based on turnover and past experience of warranty claims.
27. Movements in share capital
Issued shares
(each share has a nominal value of CHF 0.05 – previous year CHF 20)
Issued shares Treasury Outstanding
shares 2)
shares
Balance April 1, 2000 63,087,500 (89,200) 62,998,300
Issue of new shares from conditional capital 1)
291,100 0 291,100
Issue of new shares from authorized capital 1,307,800 0 1,307,800
Purchase of treasury shares 0 (49,500) (49,500)
Balance March 31, 2001 64,686,400 (138,700) 64,547,700
Issue of new shares from conditional capital 1)
517,800 0 517,800
Disposal of treasury shares 0 1,000 1,000
Balance March 31, 2002 65,204,200 (137,700) 65,066,500
Nominal value of share capital
Share capital Treasury Outstanding
1,000 CHF shares 2)
share capital
Balance April 1, 2000 12,618 (18) 12,600
Issue of new shares from conditional capital 1)
58 0 58
Issue of new shares from authorized capital 261 0 261
Purchase of treasury shares 0 (10) (10)
Balance March 31, 2001 12,937 (28) 12,909
Issue of new shares from conditional capital 1)
71 0 71
Par value repayment by Phonak Holding Ltd. (9,748) 21 (9,727)
Balance March 31, 2002 3,260 (7) 3,253
1) Created for purpose of the employee share option plan.
2) The treasury shares, which are not entitled to dividends, were purchased on the open market. Other than 11,500 shares which are reserved
for the Phonak Cycling Team, treasury shares are at the company’s disposal.
Consolidated Financial Statements
39

At March 31, 2002, the authorised share capital amounted to CHF 3.6 million, the same amount as last year,
representing 72,000,000 registered shares of CHF 0.05 par value. During the annual shareholders’ meetings on
July 13, 2000 and July 5, 2001, the conditional share capital was increased from a maximum of 5,000,000 shares
to a maximum of 6,912,500 shares. As of March 31, 2002, 6,103,600 (previous year 6,621,400) shares thereof
had not yet been issued. These shares are reserved for use in the Key People program (employee share option plan
for key employees of the Phonak Group). In addition, the shareholders approved an authorized share capital consisting
of a maximum of 2,000,000 shares during their annual meeting on December 7, 2000. Of these shares,
1,307,800 had been issued in the previous year to cover a portion of the purchase price for Unitron and
Hansaton. The remaining maximum 692,200 (as previous year) shares are available for use to carry out further
acquisitions until December 7, 2002.
28. Acquisition of subsidiaries
Effective April 1, 2001, the company acquired a 100% interest in Hansaton Akustische Geräte GmbH.
During the year, the company also founded and obtained a 100% interest in THC Finance Ltd., Bermuda
(effective July 26, 2001) and RAV Finance Inc., USA (effective July 1, 2001) for the purpose of financing
past and future acquisitions and other projects. These acquisitions were accounted for using the purchase
method of accounting. The cost to acquire or establish these companies, paid in cash and shares, was
CHF 48.2 million. The operating result of these companies from the founding date to March 31, 2002 amounted
to CHF 1.4 million.
2001/02 2000/01
1,000 CHF 1,000 CHF
Acquisition Acquisition
Cash and cash equivalents 1,692 6,208
Trade receivables 6,394 15,865
Other receivables and prepayments 427 1,428
Inventories 2,666 14,067
Tangible assets 3,223 8,158
Investments and loans 748 4,005
Deferred tax assets 3,227 9,076
Short-term debts (2,307) (15,743)
Trade payables (2,731) (9,698)
Other payables and accruals (3,064) (12,956)
Tax payable (1,093) (256)
Mortgages 0 (566)
Other long-term debts (153) (22,842)
Deferred tax liabilities 0 (134)
Other long-term provisions (5,605) (2,149)
Total net assets 3,424 (5,537)
Of which acquired 2,889 (5,537)
Goodwill 45,387 185,594
Purchase price 48,276 180,057
For which Phonak Holding shares were given in consideration 1)
(16,213) (64,577)
Cash consideration 32,063 115,480
Less cash and cash equivalents acquired (1,692) (6,208)
Cash flow on acquisition, net of cash acquired 30,371 109,272
Less prepayments from prior year (23,606) 0
Cash flow on acquisition 6,765 109,272
1) Consideration of CHF 16,213,000 was given as a prepayment in 2000/01.

Consolidated Financial Statements
Details regarding the acquisitions made during the year:
Interest Purchase price Goodwill
held 1,000 CHF 1,000 CHF
Hansaton Akustische Geräte GmbH, Austria 100% 40,075 37,743
THC Finance Ltd., Bermuda 100% 0 0
RAV Finance Inc., USA 100% 8,201 7,644
48,276 45,387
29. Employee benefits
Defined benefit plans
The pension funds of Phonak Holding Ltd., in which the Swiss Group companies Phonak Ltd., Phonak
Switzerland Ltd. and Phonak Communications Ltd. also participate, are defined benefit plans under IAS
definitions (see also Note 2.6 Accounting and valuation principles). The pension plans of Phonak Holding
Ltd. are accounted for as defined benefit plans according to IAS 19. The results are summarized below:
31.03.2002 31.03.2001
Amounts recognized in the balance sheet 1,000 CHF 1,000 CHF
Present value of funded obligations (58,252) (45,750)
Fair value of plan assets 58,755 47,255
503 1,505
Unrecognised actuarial gains 3,273 947
Asset in the balance sheet 3,776 2,452
Amounts recognized in the income statement
Current service cost 3,609 3,164
Interest cost 1,830 1,537
Expected return on plan assets (2,836) (1,421)
Total employee benefit expenses 2,603 3,280
Movements in the asset
At beginning of the year 2,452 2,452
Total employee benefit expenses (2,603) (3,280)
Contributions paid 3,927 3,280
At end of year 3,776 2,452
Principal actuarial assumptions
Discount rate 4% 4%
Future salary increases 3% 3%
Future pension increases 2% 2%
Expected return on plan assets 5% 5%
Fluctuation rate 10% 10%
Defined contribution plans
The employer's contributions are directly recognized in the income statement, amounting to CHF 0.6 million
in the year ended March 31, 2002 (previous year CHF 0.7 million).
41

30. Related party transactions
The total remuneration of the Board of Directors and Group executive management of Phonak Holding Ltd.
for the current business year amounted to CHF 2.9 million in the year ended March 31, 2002 (previous year
CHF 2.6 million). During the year, Phonak Marketing International Ltd. was sold to a shareholder for an
amount equal to its carrying value. Following the sale, Phonak Ltd. entered into a sponsorship agreement with
Phonak Marketing International Ltd. effective until December 31, 2004.
31. Employee share option plan
In accordance with the "Key People Program” established in 1997, members of the Board of Directors of
Phonak Holding Ltd., Group executive management as well as management and senior employees of other
Group companies receive annually a certain number of options on the shares of Phonak Holding Ltd.; this is
basically on the condition that the respective employees have been employed by the Phonak Group for a
period of generally two years. The options are granted for no consideration and each option entitles the
holder to one Phonak Holding Ltd. share after a lock-up period of generally two years at a pre-defined exercise
price. The exercise price corresponds to the average market price over the last three months immediately
prior to the month of the grant. Also, in accordance with special agreements, key people of the Phonak
Group are granted options, partially with and partially without consideration. The shares required for the
share option plan are issued from the conditional share capital which was created by resolutions of the
1994, 2000 and 2001 general meetings in accordance with Article 3a of Phonak Holding Ltd. articles of
incorporation.
Changes in outstanding options:
2001/02 2000/01
Weighted Weighted
Number of average Number of average
options exercise price options exercise price
CHF CHF
Outstanding options at April 1 2,006,000 34.66 1,237,500 18.66
Granted 519,050 47.82 1,112,100 47.15
Exercised 1)
(517,800) 18.23 (291,100) 14.70
Expired (311,000) 39.86 (52,500) 37.61
Outstanding options at March 31 1,696,250 42.75 2,006,000 34.66
Exercisable at March 31 497,500 35.60 85,000 13.50
1) Total consideration from exercise of options amounted to CHF 9.4 million (previous year CHF 4.3 million)
42

Summary of outstanding and exercisable options at March 31, 2002:
Outstanding options Exercisable options
Exercise Number Average Weighted Number Weighted
price range remaining life average average
(years) exercise price exercise price
CHF CHF CHF
8.00 10,000 2.8 8.00 0 0
13.50 37,500 2.1 13.50 0 0
18.50 305,000 0.7 18.50 257,500 18.00
26.54 2,500 0.8 26.54 2,500 26.54
40.50 517,000 1.6 40.50 0 0
54.23 487,500 1.3 54.23 237,500 54.23
56.00 336,750 2.5 56.00 0 0
8.00–56.00 1,696,250 1.6 42.76 497,500 35.60
32. Contingent liabilities
At March 31, 2002 and 2001, there were no pledges given to third parties. Guarantees given to third parties
amounted to CHF 1.4 million (previous year CHF 0.4 million). There were no recourse liabilities in respect of
discounted bills of exchange at March 31, 2002 and 2001.
33. Leasing liabilities
At March 31, 2002 the following minimum leasing liabilities existed:
Consolidated Financial Statements
Business Year Operating Finance
leases leases
1,000 CHF 1,000 CHF
2002/03 6,809 498
2003/04 6,005 94
2004/05 5,636 18
2005/06 5,207 15
2006/07 4,102 0
2007/08 3,674 0
thereafter 23,297 0
Total 54,730 625
Less interest component (26)
Total (excl. interest) 599
Previous year 52,041 886
Less interest component (74)
Previous year (excl. interest) 812
The operating lease liabilities relate primarily to long-term rental agreements for office premises which are,
in general, renewable.
43

34. Number of employees
At March 31, 2002, the Phonak Group employed 2,416 people (previous year 2,122). They were engaged in
the following regions and activities:
By region 31.3.2002 31.3.2001
Switzerland 637 617
Europe (excl. Switzerland) 691 515
North America 993 889
Australasia 95 101
Total 2,416 2,122
By activity 31.3.2002 31.3.2001
Research & development 177 142
Production 969 985
Marketing/sales and administration 1,270 995
Total 2,416 2,122
The average number of employees of the Phonak Group for the year was 2,378 (previous year 1,583).
35. Events after the balance sheet date
The company has signed a letter of intent to acquire a 100% interest in Jordan Hearing Aids Manufacturing
Co. Ltd. (Amman, Jordan), effective April 1, 2002. The transaction is subject to completion of due diligence
and preparation of definitive agreements. Upon completion, the acquisition will be accounted for using
the purchase method in the 2002/03 consolidated financial statements. The maximum purchase price, to
be paid in cash, is CHF 1.7 million, which includes a variable component based on future performance of the
acquired company. The revaluation of net assets to be acquired is currently in progress; therefore, the
amount of related goodwill cannot be specified at this time.
36. Exchange rates
The following exchange rates were used for currency translation:
Year-end rates Average rates for year
Balance sheet Income statement
31. 3. 2002 31. 3. 2001 2001/02 2000/01
AED 100 45.73 47.06 46.26 46.26
AUD 1 0.89 0.85 0.87 0.94
CAD 1 1.05 1.10 1.08 1.13
DKK 100 19.73 20.45 20.10 20.69
EUR 1 1.47 1.53 1.50 1.54
GBP 1 2.39 2.47 2.44 2.52
NOK 100 19.05 19.04 18.85 18.99
NZD 1 0.73 0.71 0.71 0.75
SEK 100 16.24 16.64 16.12 17.98
USD 1 1.68 1.73 1.70 1.70
44

Consolidated Financial Statements
37. List of significant consolidated companies
Company Domicile Sales Share capital Share held by
name 2001/02 Phonak Holding
million CHF Local curr. 1,000
Switzerland
Phonak Holding Ltd. Stäfa 0 CHF 3,260 0
Phonak Ltd. Stäfa 227.2 CHF 2,500 99.3 %
Phonak Communications Ltd. Courgevaux-Murten 28.7 CHF 500 100 %
Phonak Switzerland Ltd. Bubikon 16.0 CHF 250 100%
Europe (excluding Switzerland)
Phonak GmbH Stuttgart (D) 41.5 EUR 153 100 %
Phonak France SA Bron-Lyon (F) 22.2 EUR 305 100%
Phonak Italia Srl Milan (I) 12.8 EUR 1,033 100%
Phonak Laem SA Madrid (E) 10.9 EUR 7,000 100%
Phonak Belgium SA Brussels (B) 0 EUR 794 100 %
Lapperre BHAC NV Groot-Bijgaarden (B) 32.5 EUR 124 100 %
Phonak B.V. Nieuwegein (NL) 8.4 EUR 227 100 %
Phonak Denmark A/S Copenhagen (DK) 10.5 DKK 9,000 100%
Phonak AB Stockholm (S) 5.4 SEK 200 100 %
Phonak AS Oslo (N) 10.9 NOK 900 100 %
Phonak UK Ltd. Warrington (GB) 15.2 GBP 150 100 %
Hansaton Akustische Geräte GmbH Salzburg (AUT) 20.8 EUR 72 100 %
HIMSA – Hearing Instruments
Manufacturers Software Ass. 1) Copenhagen (DK) 1.7 DKK 1,000 25 %
North America
Phonak Inc. Warrenville (USA) 195.2 USD 1,250 100 %
Phonak Canada Ltd. Mississauga (CDN) 25.0 CAD 550 100 %
Unitron Group Kitchener (CDN) 97.8 CAD 67,998 100 %
THC Finance Ltd. Bermuda 0 CHF 165,021 100 %
RAV Finance Inc. USA 14.5 USD 0 2) 100 %
Australasia
Phonak Pty Ltd. Blacktown-Sydney (AUS) 24.9 AUD 750 100 %
Phonak New Zealand Ltd. Auckland (NZ) 8.2 NZD 250 100 %
Phonak Middle East FZE Dubai (UAE) 3.3 AED 1,000 100 %
1) Consolidated using the equity method
2) USD 1.00
45

46
Report of the Group Auditors
to the General Meeting of
Phonak Holding Ltd., Stäfa
As auditors of the group, we have audited the consolidated financial statements (consolidated income statement, consolidated balance
sheet, consolidated statement of cash flows, summary of changes in shareholders' equity and notes – pages 17 to 45) of Phonak
Holding Ltd. for the year ended March 31, 2002. The prior year corresponding figures were audited by other group auditors.
These consolidated financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional
qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession and with the International Standards
on Auditing issued by the International Federation of Accountants (IFAC), which require that an audit be planned and performed
to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We have
examined on a test basis evidence supporting the amounts and disclosures in the consolidated financial statements. We have also
assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, the results of operations and the
cash flows in accordance with International Accounting Standards (IAS) and comply with Swiss law.
We recommend that the consolidated financial statements submitted to you be approved.
Zurich, May 30, 2002
PricewaterhouseCoopers Ltd.
Stephen W. Williams Patrick Balkanyi

48 Balance Sheet
49 Income Statement
50 Notes to the Financial Statements
54 Appropriation of Available Earnings
54 Report of the Auditors
Financial Statements of Phonak Holding Ltd.
47

Balance Sheet at March 31, 2002
Assets
31. 3.2002 31. 3.2001
Notes 1,000 CHF 1,000 CHF
Current assets
Cash and cash equivalents 576 32,924
Marketable securities 3.1 14,457 14,680
Amounts due from Group companies 1,525 1,419
Other receivables 3.2 972 954
Prepayments 67 163
Total current assets
Non-current assets
Investments and loans
17,597 50,140
Loans to Group companies 3.3 278,118 196,574
Loan to associated company 799 799
Allowance on loan to associated company (409) (409)
Investments 3.4 159,267 153,642
Total non-current assets 437,775 350,606
Total assets 455,372 400,746
Liabilities and shareholders’ equity
31.3.2002 31.3.2001
Notes 1,000 CHF 1,000 CHF
Liabilities
Trade payables
To third parties 963 158
To Group companies 8 0
Bank debt
Other payables
3.5 0 165,000
Third parties 49 5
Group companies 2,028 2,778
Loans from Group companies 172,696 0
Accruals 1,028 1,278
Provision for taxes 1,806 1,700
Total liabilities
Shareholders’ equity
178,578 170,919
Share capital
Legal reserve
3,260 12,937
General legal reserve 130,804 121,458
Reserve for treasury shares 3.6 3,920 3,969
Free reserves 76,000 54,000
Retained earnings 62,810 37,463
Total shareholders’ equity 3.7 276,794 229,827
Total liabilities and shareholders’ equity 455,372 400,746
48

Income Statement 2001/02
Financial Statements of Phonak Holding Ltd.
2001/02 2000/01
Notes 1,000 CHF 1,000 CHF
Income
Management and license fees 7,160 7,443
Investment income 4.1 37,364 25,031
Interest income 19,959 7,181
Total income
Expenses
64,483 39,655
Office and professional expenses 1,619 1,511
Advertising and PR expenses 538 459
Interest expense 10,850 1,705
Losses on marketable securities 198 154
Other operating expenses 2,543 1,856
Exchange losses (net) 489 767
Taxes 4.2 948 1,510
Total expenses 17,185 7,962
Net profit for the year 47,298 31,693
49

Notes to the Financial Statements at March 31, 2002
1. General
The financial statements of Phonak Holding AG are prepared in accordance with the principles of Swiss
corporate law.
2. Disclosure required by Swiss corporate law
2.1 Sureties, guarantees and pledges given on behalf of third parties
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Guarantees given to banks in respect of credit arrangements
of foreign subsidiary companies 25,705 26,705
2.2 Contingent liabilities
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Guarantees given in respect of rental obligations
and bank debts of Group companies 180,344 41,858
2.3 Conditional capital
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Conditional capital at year-end
(Increase by a maximum of CHF 331,070, representing a maximum
of 6,621,400 shares at CHF 0.05 nominal value each, as approved by
the shareholders during their annual meeting on July 5, 2001)
305 1,324
2.4 Authorized capital
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Authorized capital at year-end
(Authorized capital was created by a decision made by the
shareholders during their annual meeting held on July 5, 2001:
maximum total CHF 34,610, representing a maximum of 692,200
shares at CHF 0.05 nominal value each.)
35 138
2.5 Significant shareholders
At year-end, the following significant shareholders were listed in the share register
(with shareholdings in excess of 5% of the issued share capital):
31.3.2002 31.3.2001
– Hans-Ueli Rihs 14.7% 15.6%
– Andreas Rihs 14.5% 14.9%
– Beda Diethelm 12.9% 13.0%
50

3. Notes to the balance sheet
Financial Statements of Phonak Holding Ltd.
3.1 Marketable securities
Marketable securities include, among other items, 137,700 treasury shares (previous year 138,700 ) purchased
for a total consideration of CHF 3,919,547 (previous year CHF 3,968,816 ). At March 31, 2002, these
shares had a market value of CHF 3,893,140 (previous year CHF 7,170,790 ). Thereof, 11,500 shares are
reserved for an option plan for the Phonak Cycling Team with the remainder at the company’s disposal.
3.2 Other receivables
Included are, in particular, amounts due from the Swiss Federal Tax Authority in respect of recoverable
withholding taxes on dividend and interest income, as well as accrued interest receivable.
3.3 Loans to Group companies
Of total loans, 54% are denominated in Canadian dollars, 31% in Swiss francs, 7% in US Dollars, 4% in
Euros, and 1% each in Australian dollars, Norwegian crowns, Danish crowns and British pounds.
51

3.4 Investments
At March 31, 2002 Phonak Holding Ltd. controlled the following significant investments:
Company name Domicile Share capital Share held by
(Local curr. 1,000) Phonak Holding
Phonak Ltd. Stäfa (CH) CHF 2,500 99.3%
Phonak Communications Ltd. Courgevaux-Murten (CH) CHF 500 100 %
Phonak Switzerland Ltd. Bubikon (CH) CHF 250 100 %
Foreign companies
Phonak GmbH Stuttgart (D) EUR 153 100 %
Phonak France SA Bron-Lyon (F) EUR 305 100 %
Phonak Italia Srl Milan (I) EUR 1,040 100 %
Phonak Laem SA Madrid (E) EUR 7,000 100 %
Phonak Belgium SA Brussels (B) EUR 794 100 %
Lapperre BHAC NV Groot-Bijgaarden (B) EUR 124 100 %
Phonak B. V. Nieuwegein (NL) EUR 227 100 %
Hansaton Akust. Geräte GmbH Salzburg (AUT) EUR 72 100 %
Phonak Danmark A/S Copenhagen (D) DKK 9,000 100 %
Phonak AB Stockholm (S) SEK 200 100 %
Phonak AS Oslo (N) NOK 900 100 %
Phonak UK Ltd. Warrington (GB) GBP 150 100 %
Phonak Inc. Warrenville (USA) USD 1,250 100 %
RAV Finance Inc. USA USD – *) 100 %
Phonak Canada Ltd. Mississauga (CDN) CAD 550 100 %
Unitron Group Kitchener (CDN) CAD 67,998 100 %
Phonak Pty Limited Baulkham Hills (AUS) AUD 750 100 %
Phonak New Zealand Ltd. Auckland (NZ) NZD 250 100 %
Phonak Middle East FZE Dubai (UAE) AED 1,000 100 %
*) USD 1.00
The investments are reported at acquisition cost. The share of Phonak Holding AG in the equity of the above
companies amounted to CHF 214 million at March 31, 2002 (previous year CHF 180 million).
3.5 Bank debt
The bank debt incurred in the prior year in the connection with the purchase of the Unitron and Hansaton
subsidiaries was transferred during the current year to Phonak Ltd.
3.6 Reserve for treasury shares
A reserve for treasury shares in the amount of CHF 3,919,547 (previous year CHF 3,968,816) was established
equal to the cost price (see note 3.1). The reduction in the amount of CHF 49,269 was credited to retained
earnings.
52

Financial Statements of Phonak Holding Ltd.
3.7 Summary of changes in shareholders’ equity
Share General Free Treasury Retained Total
capital legal reserve share earnings shareholders
1,000 CHF reserve reserve equity
Balance April 1, 2001 12,937 121,458 54,000 3,969 37,463 229,827
Capital repaid (9,748) (9,748)
Capital increases
(incl. share premium)
from conditional capital 71 9,346 9,417
Allocation to free reserve 22,000 (22,000) 0
Reversal to reserve
for treasury shares (49) 49 0
Net profit for the year 47,298 47,298
Balance March 31, 2002 3,260 130,804 76,000 3,920 62,810 276,794
During the financial year 2001/02, an additional 517,800 registered shares with a par value of CHF 0.05 each,
or a total par value of CHF 25,890, were issued from the conditional capital (which was created for the
purpose of a equity participation for key employees of the Phonak Group) for a total net consideration of
CHF 9,417,485. The conditional share capital with a par value of CHF 331,070 (6,621,400 shares) as authorized
by the shareholders on July 5, 2001 decreased by CHF 25,890 (517,800 shares), thereby leaving CHF 305,180
(6,103,600 shares) for disposition.
Based on the remaining conditional capital, a total of 1,696,250 (previous year 2,006,000) employee call
options were outstanding as of March 31, 2001, which can be exercised through August 2006.
In addition, an authorized capital amounting to a maximum of CHF 34,610 – representing a maximum of
692,200 shares at CHF 0.05 par value – was created during the ordinary shareholders’ meeting on July 5,
2001. The authorized capital is available for additional acquisitions until December 7, 2002.
53

4. Notes to the income statement
4.1 Investment income
This comprises dividends received from Group companies and other investments.
4.2 Taxes
The tax expense consists of Swiss federal taxes on non-investment income. (The company is exempt from
income taxes in the canton of Zurich.)
Appropriation of Available Earnings
As proposed by the Board of Directors to the General Meeting of July 11, 2002
31.3.2002 31.3.2001
1,000 CHF 1,000 CHF
Carry forward from previous year 15,463 8,541
Release from / (allocation to) reserve for treasury shares 49 (2,771)
Net profit for the year 47,298 31,693
Available earnings 62,810 37,463
Allocation to free reserves (22,000) (22,000)
Dividend distribution (7,808) 1) 0
Balance to be carried forward 33,002 15,463
1) If the shareholders’ meeting authorizes the proposed appropriation of available earnings, a gross dividend of CHF 0.12 per registered share
at CHF 0.05 will be paid out.
No dividends will be distributed on treasury shares held by Phonak Holding AG.
54
Report of the Statutory Auditors
to the General Meeting of
Phonak Holding Ltd., Stäfa
As statutory auditors, we have audited the accounting records and the financial statements (balance sheet, income statement and
notes – pages 47 to 54) of Phonak Holding Ltd. for the year ended March 31, 2002. The prior year corresponding figures were audited
by other auditors.
These financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these financial
statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession, which require that an audit be
planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement.
We have examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also
assessed the accounting principles used, significant estimates made and the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the accounting records, the financial statements and the proposed appropriation of available earnings comply with
Swiss law and the company's articles of incorporation.
We recommend that the financial statements submitted to you be approved.
Zurich, May 30, 2002
PricewaterhouseCoopers Ltd.
Stephen W. Williams Patrick Balkanyi

56 Information for the Investor
59 Company Information
55

Information
for the Investor
1. Capital structure
As of March 31, 2002 the capital of Phonak
Holding Ltd. was made up as follows:
Share capital CHF 3,260,210
Total shares 65,204,200 shares of
CHF 0.05 par value
Conditional capital CHF 305,180
Conditional shares 6,103,600 shares of
CHF 0.05 par value
Authorized capital CHF 34,610
Authorized shares 692,200 shares of
CHF 0.05 par value
Notes:
• Phonak Holding Ltd. registered shares have
been quoted on the Swiss stock exchange
since December 1, 1994. The general meeting
of July 5, 2001 approved a capital reduction
and repayment of CHF 15 on the par value
per share. At the same time, shareholders
approved a 1:100 share split. This reduced the
par value of Phonak registered shares from
CHF 20 to CHF 0.05.
At March 31, 2002, the total number of
issued shares had risen to 65,204,200 from
64,686,400 (amount for previous year
adjusted for 1:100 share split) and the share
capital decreased to CHF 3,260,210 from
CHF 12,937,280 as a result of the above
described changes in capital structure and
the increase in the conditional capital.
• The conditional capital was created with the
purpose of offering Phonak shares, through an
option program, to key employees of the
Phonak Group. From a maximum of 8,000,000
approved shares with a par value of CHF 0.05,
517,800 shares have been issued during the
reporting period, reducing the maximum conditional
capital to 6,103,600 shares as at
March 31, 2002.
56
During the year, staff in the Phonak Group
received a total of 519,050 options as part of
the Phonak Key People Program.
At March 31, 2002 a total of 1,696,250 (prior
year 2,006,000) options were outstanding.
Each of these options entitles the holder to
purchase one registered share, with a par
value of CHF 0.05, generally after a period of
two years.
• At the extraordinary general meeting held on
December 7, 2000, shareholders approved the
creation of authorized capital of 2,000,000
shares, with a par value of CHF 0.05.
1,307,800 of these shares were used last year
for the acquisition of Unitron and Hansaton,
therefore, the authorized capital remained
uncanged from the previous year-end at
692,200 shares.

2. Shareholders
As of March 31 the shareholders of Phonak Holding
Ltd. were the following:
Outstanding shares 2002 2001
Number in % in %
Old shareholders 27,454,100 42.1 43.9
Public shareholders 37,750,100 57.9 56.1
Total share capital 65,204,200 100 100
• The old shareholders are those who were
already shareholders before the Initial Public
Offering of November 1994, namely Hans-Ueli
Rihs, Andreas E. Rihs and Beda Diethelm. Their
shares in the capital and voting rights of the
company are shown on page 50 of this report.
• The members of the Board of Directors represent
directly and indirectly a total of 42.3%
(previous year 44.1%) of the outstanding
shares.
• No public shareholder owns more than 1.3%
(previous year 2.5%) of the outstanding
shares.
• As of March 31, 2002, a total of 15,402 (previous
year 6,728) shareholders were entered in
the share register of Phonak Holding Ltd., of
these 1,103 (previous year 385) were non-
Swiss nationals who held a total of 8.1% (previous
year 11.4%) of the outstanding shares.
3. Restriction on transferability
The registration in the share register as a shareholder
with voting rights is limited to 5% of the
share capital (Art. 6 par 2 of the Articles of
Association). This restriction on the voting rights
does not apply to the old shareholders.
4. Restriction on voting rights
In exercising their voting rights, no shareholder
may unite – by a combination of own and represented
shares together – more than 10% of the
shares of the company (Art. 12 par 2 of the Articles
of Association). This restriction on the voting
rights does not apply to the old shareholders.
Information for the Investor
5. Public purchase offer
A purchaser of shares is obliged to make a public
purchase offer, when he has more than 49% of
the voting rights at his disposal (“opting up”, as
per Art. 8 of the Articles of Association).
6. Stock exchange information
Share prices of Phonak registered shares in CHF
(historical data adjusted to share split 1:100 of
September 24, 2001).
2001/02 2000/01
High 62.50 70.60
Low 25.55 36.00
At March 31 28.25 51.70
Market valuation
as of March 31
in million CHF 1,842 3,344
in % of shareholders’ equity 509% 1,033%
Price/earnings ratio
as of March 31 41.6x 49.8x
“Ticker” symbols
Security No. 1'254’978
Bloomberg PHBN SW
Reuters PHNZn. S
Telekurs (Investdata) PHBN
Datastream S: PHBN
7. Investor Relations Calendar
July 11, 2002
General Meeting of Phonak Holding Ltd.
at the Kongresshaus Zurich
November 2002
Semi-annual Report per September 30, 2002
April 2003
Shareholder Letter with provisional sales F2002/03
and outlook F2003/04
June 12, 2003
Media Conference; Presentation to Financial Analysts
June 12, 2003
Mailing of Annual Report
July 11, 2003
General Meeting of Phonak Holding Ltd.
57

8. Names and addresses
Phonak Holding Ltd.
Investor Relations
Laubisrütistrasse 28
CH-8712 Stäfa
Switzerland
Phone ++41 1 928 01 01
Fax ++41 1 928 03 90
E-Mail: ir@phonak.ch
Internet: www.phonak.com
Responsible for investor relations:
Dr. Michael Düringer
Delivery of documents, mailing list, etc.:
Karin Haggenmüller
Share register:
ShareCommService Ltd.
Share Register
Margitta Christe
Kanalstrasse 29
CH-8152 Glattbrugg
Switzerland
Phone ++41 1 809 58 53
Fax ++41 1 809 58 59
58

Companies
in Switzerland
Phonak Holding Ltd.
Laubisrütistrasse 28
CH-8712 Stäfa
Phone ++41 1 928 01 01
Fax ++41 1 928 03 90
E-Mail: contact@phonak.ch
Phonak Ltd.
Laubisrütistrasse 28
CH-8712 Stäfa
Phone ++41 1 928 01 01
Fax ++41 1 928 07 07
E-Mail: info@phonak.ch
Phonak Schweiz Ltd.
Techcenter Schwarz
Tannägertenstrasse 2
CH-8608 Bubikon
Phone ++41 55 253 80 00
Fax ++41 55 253 80 11
E-Mail: info@phonak.ch
Phonak Communications Ltd.
Länggasse 17
CH-3280 Murten
Phone ++41 26 672 96 76
Fax ++41 26 672 96 77
E-Mail: info@phonakcom.ch
Companies
in Europe
Phonak GmbH
Postfach 1725
Max-Eyth-Strasse 20
D-70707 Fellbach-Oeffingen
(Stuttgart)
Phone ++49 711 51 07 00
Fax ++49 711 51 070 70
E-Mail: info@phonak.de
Unitron Hearing GmbH –
Deutschland
Stoppelweide 2
D-28307 Bremen
Phone ++49 421 43 87 90
Fax ++49 421 48 81 56
E-Mail: info@unitronhearing.de
Hansaton
Akustische Geräte GmbH
Josef-Lindner-Strasse 4 / Top 4
A–5073 Wals-Himmelreich
Phone ++43 662 451 26 20
Fax ++43 662 451 262 99
E-Mail: office@hansaton.at
Phonak France SA
5, rue Maryse Bastié
F-69500 Bron (Lyon)
Phone ++33 4 72 14 50 00
Fax ++33 4 78 26 98 97
E-Mail: info@phonak.fr
Phonak Italia Srl
Via Jacopo dal Verme, 7
I-20159 Milano
Phone ++39 02 69 00 81 82
Fax ++39 02 69 00 87 84
E-Mail: info@phonak.it
Lapperre BHAC NV
Stationsstraat 22
B-1702 Groot-Bijgaarden
Phone ++32 2 700 77 77
Fax ++32 2 700 77 70
E-Mail: info@lapperre.be
Company Information
Phonak B.V.
Archimedesbaan 19
Postbus 1011
NL-3430 BA Nieuwegein
Phone ++31 30 600 88 50
Fax ++31 30 600 88 51
E-Mail: info@phonak.nl
Phonak UK Ltd.
Cygnet Court
Lakeside Drive
GB-Warrington WA1 1PP
United Kingdom
Phone ++44 1925 62 36 00
Fax ++44 1925 24 57 00
E-Mail: info@phonak.co.uk
Phonak Laem SA
Urbanizacion El Palmeral
Bloque 9, no. 15-21
E-03008 Alicante
Phone ++34 965 10 91 68
Fax ++34 965 11 16 72
E-Mail: info@phonak.es
Phonak Danmark A/S
Multi Medie Huset
Nitivej 10
DK-2000 Frederiksberg
Phone ++45 38 10 85 86
Fax ++45 38 10 46 86
E-Mail:
info.frederiksberg@phonak.dk
Phonak Danmark A/S
Auris
Østre Hougvej 42 – 44
DK-5500 Middelfart
Phone ++45 64 41 78 87
Fax ++ 45 64 41 79 97
E-Mail: info.middelfart@phonak.dk
59

Phonak AB
Hornsbruksgatan 28
S-117 34 Stockholm
Phone ++46 8 442 46 60
Fax ++46 8 429 89 80
E-Mail: info@phonak.se
Phonak AS
Akersgata 8
Boks 525 Sentrum
N-0105 Oslo
Phone ++47 22 41 66 30
Fax ++47 22 41 66 44
E-Mail: info@phonak.no
60
Companies
in North America
Phonak Inc.
4520 Weaver Parkway
Warrenville, IL 60555-3927, USA
Phone ++1 630 821 5000
Fax ++1 630 393 7400
E-Mail: info@phonak.com
Unitron Hearing
2300 Berkshire Lane North
Plymouth, Minnesota 55441, USA
Phone ++1 763 744 3300
Fax ++ 1 763 557 8828
E-Mail: info@unitronhearing.com
Phonak Canada Ltd.
7895 Tranmere Drive, Suite 207
Mississauga, Ontario L5S 1 V9
Canada
Phone ++1 905 677 1167
Fax ++1 905 677 7536
E-Mail: info@phonak.on.ca
Unitron Hearing (Corporate Office)
20 Beasley Drive, P.O. Box 9017
Kitchener, Ontario N2G 4X1,
Canada
Phone ++1 519 895 0100
Toll Free ++1 877 492 6244
Fax ++1 519 895 0108
E-Mail: info@unitron.com
Unitron Hearing Canada
5 Cherry Blossom Road, Unit 2
Cambridge, Ontario N3H 4R7,
Canada
Phone ++1 519 650 9111
Toll Free ++1 800 265 8255
Fax ++1 519 650 9562
E-Mail: info@unitronhearing.ca
THC Finance Limited
P.O. Box HM2964
Hamilton HMX
Bermuda
Companies
in Australasia
and Middle East
Phonak Pty. Ltd.
Suite 4, Level 2
21 Solent Circuit
Norwest Business Park
Baulkham Hills NSW 2153,
Australia
Phone ++61 2 8858 1800
Fax ++61 2 9634 8373
E-Mail: info@phonak.com.au
Phonak New Zealand Ltd.
1st Floor AC Nielsen Centre
129-155 Hurstmere Road,
P.O. Box 33-349
Takapuna, Auckland 9
New Zealand
Phone ++64 9 486 1849
Fax ++64 9 486 1895
E-Mail: info@phonak.co.nz
Phonak Tokyo Office
17th Fl. Tokyo Sankei Bldg.
1-7-2 Otemachi, Chiyodaku
Tokyo 100-0004, Japan
Phone ++81 3 3516 7823
Fax ++81 3 3516 7821
E-Mail: info@phonak.jp
Phonak Middle East FZE
Dubai Airport Free Zone
Building # B9
P.O. Box 54302
UAE–Dubai
Phone ++971 4 299 6060
Fax ++971 4 299 6161
E-Mail: info@phonak.co.ae

Phonak Holding Ltd.
Laubisrütistrasse 28
CH-8712 Stäfa (Switzerland)
Phone ++41 1 928 01 01
Fax ++41 1 928 03 90
Internet: www.phonak.com
E-Mail: ir@phonak.ch
Dieser Geschäftsbericht ist auch in deutscher Sprache erhältlich. 028-0902-02