LOGITECH INTERNATIONAL SA (Form: 20-F, Received: 05/21/2003 16:50:57)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

ANNUAL REPORT PURSUANT TO

SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2003

Commission File Number: 0-29174

LOGITECH INTERNATIONAL S.A.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

Canton of Vaud, Switzerland

(Jurisdiction of incorporation or organization)

Logitech International S.A.

Apples, Switzerland

c/o Logitech Inc.

6505 Kaiser Drive

Fremont, California 94555

(510) 795-8500

(Address and telephone number of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act: None

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Title of each class		Name of each exchange on which registered
American Depositary Shares, each representing one registered share at par value CHF 1 per share		Nasdaq National Market

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

The number of outstanding shares of each of the issuer’s classes of capital or common stock as of March 31, 2003 was 47,901,655 registered shares.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ¨ Item 18 x

TABLE OF CONTENTS

			Page
Part I

	Item 1.	Identity Of Directors, Senior Management And Advisers	4

	Item 2.	Offer Statistics And Expected Timetable	4

	Item 3.	Key Information	5

	Item 4.	Information On The Company	11

	Item 5.	Operating And Financial Review And Prospects	22

	Item 6.	Directors, Senior Management And Employees	30

	Item 7.	Major Shareholders And Related Party Transactions	31

	Item 8.	Financial Information	31

	Item 9.	The Offer And Listing	32

	Item 10.	Additional Information	35

	Item 11.	Quantitative And Qualitative Disclosure About Market Risk	37

	Item 12.	Description Of Securities Other Than Equity Securities	38

Part II

	Item 13.	Defaults, Dividend Arrearages And Delinquencies	39

	Item 14.	Material Modifications To The Rights Of Security Holders And Use Of Proceeds	39

	Item 15.	Controls and Procedures	39

	Item 16A.	Audit Committee Financial Expert	39

	Item 16B	Code of Ethics	39

	Item 16C	Principal Accountant Fees and Services	40

Part III

	Item 17.	Financial Statements	40

	Item 18.	Financial Statements	40

	Item 19.	Exhibits	40

Signatures			42

Certifications			43

Consolidated Financial Statements			F-1

In this document, unless otherwise indicated, references to the “Company” or “Logitech” are to Logitech International S.A., its consolidated subsidiaries and predecessor entities. In addition, references to “ADSs” are to the American Depositary Shares of Logitech International S.A., each representing one registered share. Unless otherwise specified, all references to U.S. dollars, dollars or $ are to United States dollars, the legal currency of the United States of America. All references to the Swiss franc or CHF are to the Swiss franc, the legal currency of Switzerland.

Logitech, the Logitech logo, and the Logitech products referred to herein are either the trademarks or the registered trademarks of Logitech. All other trademarks are property of their respective owners.

FORWARD-LOOKING INFORMATION

This Annual Report on Form 20-F contains forward-looking statements based on beliefs of our management as of the filing date of this Form 20-F. These forward-looking statements include statements related to:

•

the business strategy for new areas of growth;

•

our belief that we are positioned to take full advantage of opportunities in the market for personal interface products;

•

our belief that our console gaming products will attract a larger number of gamers;

•

the sufficiency of our cash and cash equivalents, cash from operations, and available borrowings under the bank lines of credit to fund capital expenditures and working capital needs for the foreseeable future; and

•

the adequacy of our leased and owned facilities to meet our needs in the foreseeable future.

Factors that might affect these forward-looking statements include, among other things:

•

general economic and business conditions;

•

our ability to compete effectively in the computer peripheral industry;

•

our ability to implement our business strategy;

•

our ability to timely develop and introduce successful new products; and

•

the risk that our products do not meet market acceptance.

The words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions are intended to identify such forward-looking statements. These statements reflect our views and assumptions. All forward-looking statements are subject to various risks and uncertainties that could cause our actual results to differ materially from expectations. The factors that could affect our future financial results are discussed more fully under “Item 3. Key Information—Risk Factors,” as well as elsewhere in this Annual Report on Form 20-F and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this filing. We undertake no obligation to publicly update or revise any forward-looking statements.

Part I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

Selected Financial Data

The financial data below has been derived from our audited consolidated financial statements. This financial data should be read with the consolidated financial statements and notes to those statements for the fiscal years ended March 31, 2003, 2002 and 2001, included elsewhere in this Form 20-F. This table should also be read in conjunction with Item 5 “Operating And Financial Review And Prospects.” The statement of income and cash flow data for the fiscal years ended March 31, 2000 and 1999 and the balance sheet data at March 31, 2001, 2000 and 1999 are derived from the Company’s audited consolidated financial statements, which are not included in this Form 20-F.

	Year ended March 31,
	2003		2002		2001		2000		1999
	(In thousands, except share and per share amounts)
Consolidated statement of income and cash flow data:
Net sales	$	1,100,288	$	943,546	$	735,549	$	592,096	$	448,136
Gross profit		364,504		315,548		233,259		183,127		140,118
Operating expenses:
Marketing and selling		141,194		130,060		105,140		79,389		62,745
Research and development		56,195		50,531		36,686		31,666		31,378
General and administrative		43,233		37,739		33,484		31,102		23,625
Purchased in-process research and development(1)		—		—		3,275		—		6,200

Total operating expenses		240,622		218,330		178,585		142,157		123,948

Operating income		123,882		97,218		54,674		40,970		16,170
Loss on sale of product line(2)		—		—		—		—		(7,272	)
Net income	$	98,843	$	74,956	$	45,068	$	30,044	$	7,137
Net income per share and ADS:
Basic	$	2.15	$	1.67	$	1.07	$	0.76	$	0.19
Diluted	$	1.97	$	1.50	$	0.96	$	0.69	$	0.18
Shares used to compute net income per share and ADS:
Basic		45,988,766		44,928,853		42,226,240		39,769,900		38,672,200
Diluted		51,409,464		50,939,060		46,940,170		43,759,940		39,826,740
Net cash provided by operating activities	$	145,108	$	112,595	$	12,043	$	32,866	$	16,799

	March 31,
	2003		2002		2001		2000		1999
	(In thousands)
Consolidated balance sheet data:
Cash and cash equivalents	$	218,734	$	143,101	$	44,142	$	49,426	$	43,251
Total assets	$	738,302	$	595,744	$	505,116	$	334,077	$	294,489
Long-term debt, net of current maturities	$	131,615	$	104,812	$	26,908	$	2,934	$	3,624
Shareholders’ equity	$	365,562	$	323,017	$	256,054	$	179,969	$	139,754

In connection with the acquisition of Labtec in fiscal 2001 and Connectix Corporation’s PC video camera business in 1999, the Company recorded charges of $3.3 million and $6.2 million for purchased in-process research and development.

In fiscal 1998, the Company sold its scanner product line to Storm Technology, Inc. In 1999, the Company wrote off $5.8 million related to a convertible note and common stock investment in Storm made in connection with the sale. The additional expenses in 1999 primarily relate to costs to conclude certain obligations exceeding management’s estimate made in 1998.

Exchange Rates

Our registered shares traded on the Swiss Exchange are denominated in Swiss francs while our ADSs traded on the Nasdaq National Market are denominated in U.S. dollars. Fluctuations in the exchange rate between the Swiss franc and the U.S. dollar will affect the U.S. dollar equivalent of the Swiss franc price of our registered shares on the Swiss Exchange and, as a result, will likely affect the market price of the ADSs in the United States, and vice versa.

The following table sets forth the Noon Buying Rate for dollars expressed in Swiss francs per dollar. The “Noon Buying Rate” is the rate in New York City for cable transfers in selected currencies as certified for customs purposes by the Federal Reserve Bank of New York.

	Average(1)	High	Low	Period End
Fiscal 1999	CHF 1.437	CHF 1.515	CHF 1.374	CHF 1.478
Fiscal 2000	1.560	1.663	1.478	1.663
Fiscal 2001	1.697	1.830	1.590	1.736
Fiscal 2002	1.699	1.819	1.586	1.682
Fiscal 2003	1.469	1.674	1.325	1.354

(1)

Represents the average of the Noon Buying Rates on the last business day of each month during the relevant period.

	High	Low
Monthly highs and lows (over the most recent six month period):
October 2002	CHF 1.514	CHF 1.476
November 2002	1.489	1.443
December 2002	1.490	1.395
January 2003	1.402	1.353
February 2003	1.375	1.349
March 2003	1.400	1.325

Capitalization and Indebtedness

Not applicable.

Reasons for the Offer and Use of Proceeds

Not applicable.

Risk Factors

Our operating results are difficult to predict and fluctuations in them may cause volatility in the price of our ADSs and registered shares.

Given the nature of the markets in which we participate, our revenues and profitability are difficult to predict for many reasons, including the following:

•

Our operating results are highly dependent on the volume and timing of orders received during the quarter, which are difficult to forecast. Customers generally order on an as-needed basis. Accordingly, our revenues in any quarter depend primarily on orders booked and shipped in that quarter.

•

A large portion of our costs must be incurred in advance of sales orders, because we must plan research and production, order components and enter into development, sales and marketing, and other operating commitments before each quarter begins. This makes it difficult for us to adjust our costs to compensate for a revenue shortfall, which may magnify the adverse impact of a revenue shortfall on our operating results.

•

Our revenues and profitability depend in part on the mix of our retail and OEM sales, because our prices and gross margins are generally lower for sales to OEM customers compared to our sales to retail customers.

•

Fluctuations in currency exchange rates impact our revenues and profitability because we report our financial statements in United States dollars whereas a significant portion of our sales to customers are in other currencies, particularly the Euro. Furthermore, fluctuations in foreign currencies impact our global pricing strategy resulting in lowering or raising selling prices in a currency in order to avoid disparity with the U.S. dollar prices.

Fluctuations in our operating results may cause volatility in the price of our ADSs and registered shares.

Production levels that do not match demand for our products may result in lost sales or in a reduction in our gross margins.

We base our production levels on our forecasts of demand for our products. Actual demand for our products depends on many factors that make it difficult to forecast. We have experienced differences between our actual and our forecasted demand in the past and expect to in the future. The following problems could occur as a result of these differences:

•

If demand for our products is below our forecasts, we could produce excess inventory or have excess manufacturing capacity. Excess inventory may negatively impact cash flows and may result in inventory write-offs. Excess manufacturing capacity could result in higher production costs and lower margins.

•

If demand for our products exceeds our forecast, we would have to rapidly increase production. We depend on suppliers and manufacturers to provide components and subassemblies. As a result, we may not be able to increase our production levels to meet unexpected demand and could lose sales on a short-term basis while we try to increase production. If customers turn to competitive sources of supply to meet their needs, our revenues would be impacted.

•

Rapidly increasing our production levels to meet unanticipated demand could result in higher costs for components and subassemblies, increased expenditures for freight to expedite delivery of materials or finished goods, and higher overtime costs and other expenses. These higher expenditures could result in lower gross margins.

If we do not timely introduce successful products our business and operating results will suffer.

The market for our products is characterized by rapidly changing technology and frequent new product introductions. The success of our products depends on several factors, including our ability to:

•

anticipate technology and market trends;

•

timely develop innovative new products and enhancements;

•

distinguish our products from those of our competitors;

•

manufacture and deliver products in sufficient volumes; and

•

price our products competitively.

If we do not do these successfully, our business and operating results will suffer.

Our failure to manage growth could harm us.

We have rapidly and significantly expanded the number and types of products we sell and will endeavor to expand our product portfolio further. This expansion places a significant strain on our management, operational and engineering resources. The areas that in particular are put under strain by our growth include the following:

New Product Launch. With the growth of our product portfolio, we experience increased complexity in coordinating product development, manufacturing, and shipping. As this complexity increases, it places strain on our ability to accurately coordinate the commercial launch of our products with adequate supply and marketing support to meet customer demands. If we are unable to scale and improve our product launch coordination, we could frustrate our customers and lose retail shelf space and product sales.

Forecasting, Planning and Supply Chain Logistics. With the growth of our product portfolio, we also experience increased complexity in forecasting customer demand and in planning for the production and delivery of the right products to the right locations. If we are unable to scale and improve our forecasting, planning and logistics, we could frustrate our customers, lose product sales or produce excess inventory.

To manage the growth of our operations, we will need to continue to improve our transaction processing, operational and financial systems, procedures and controls to cope with the increased complexity. If we are unable to scale and improve them, the consequences could include: delays in shipment of product, degradation in levels of customer support, lost sales and increased inventory. These difficulties could harm or limit our ability to expand.

If we do not compete effectively, demand for our products will fall and our business and operating results will be significantly harmed.

Our industry is intensely competitive. It is characterized by a trend of declining average selling prices in the OEM market, performance enhancements and new features of competing retail products, and increased price competition from less established brands.

Microsoft is our main competitor in retail pointing devices, keyboards and PC gaming devices. Microsoft’s offerings include a complete line of mice, trackballs and keyboards including cordless mice and desktops. Microsoft has significantly greater financial, technical, sales, marketing and other resources, as well as greater name recognition and larger customer base, than we have. In particular, we face potential revenue and margin impacts from Microsoft’s aggressive pricing strategies as well as their promotions and channel marketing. We are also experiencing increased competition for corded and cordless mice and desktops from less established brands, in the lower price segments.

Microsoft is a leading producer of operating systems and applications with which our pointing, keyboard and gaming devices are designed to operate. As a result, Microsoft may be able to improve the functionality of its pointing, keyboard and gaming devices to correspond with ongoing enhancements to its operating systems and software applications before we are able to make such improvements. This ability could provide Microsoft with significant lead-time advantages for product development. In addition, Microsoft may be able to offer pricing advantages on bundled hardware and software products that we may not be able to offer.

Our main competitors in the U.S. for PC video cameras are Creative Labs and Veo. In Europe, our main competitors are Philips and Creative Labs. We are also experiencing increased competition from less established brands in PC video cameras that are seeking shelf space and increased market share through price competition.

Competitors for our interactive entertainment products include Guillemot, Interact Accessories, Gravis, Mad Catz, Microsoft and Saitek Industries. Our cordless controllers for PlayStation ^® 2 are competing against Sony’s sales of their own corded controllers. Sony has substantially greater resources than we do.

Competitors in audio devices vary by product line. In the PC speaker business, competitors include Altec Lansing and Creative Labs. In headset, microphone, and telephony products, competitors include Altec Lansing, Plantronics, and GN Netcom. These markets are intensely competitive and market leadership changes frequently as a result of new products, designs and pricing. In addition, with our entry into the mobile phone headset business, we are competing against mobile phone and accessory companies such as Sony and Ericsson, each of whom have substantially greater resources than us and have established market positions in this business.

We expect to continue to experience competition and price pressures in the OEM business and performance enhancements of competing products in retail as well as pricing pressure from less established brands. In addition, consolidation in the personal computer and retail industries has increased the purchasing power of our customers. If we do not continue to distinguish our products, particularly our retail products, through distinctive, technologically-advanced features, design and services, and if we do not otherwise compete effectively, demand for our products will fall, our gross margins may decrease, we will lose market share, and our revenues will decline.

Our success depends on the continued viability and financial stability of our distributors, retailers and OEM customers.

We sell our products through a domestic and international network of distributors, retailers and OEM customers, and our success depends on the continued viability and financial stability of these customers. The distribution, retail and OEM industries have been historically characterized by rapid change, including periods of widespread financial difficulties and consolidations, and the emergence of alternative distribution channels.

The loss of one or more of our distributors, major retailers or OEM customers could significantly harm our business, financial condition and operating results. In addition, because of our sales to large high volume customers, we maintain individually significant receivable balances with these customers. As of March 31, 2003, one customer, Ingram Micro, represented 18% of total accounts receivable and 12.4% of net sales for fiscal 2003. We seek to control our credit risk through ongoing credit evaluation of our customers’ financial condition and by purchasing credit insurance on European retail accounts receivable balances, but generally we do not require any collateral from our customers. If any of our major customers were to default in the payment of its receivables owed to us, our business, financial condition and operating results could be harmed.

A significant amount of our manufacturing operations are located in China, which exposes us to risks associated with doing significant business in that country.

A significant amount of our manufacturing operations are located in China. These operations could be severely impacted by economic or political instability in China, by evolving interpretation and enforcement of legal standards, by strains on Chinese transportation, communications, trade and other infrastructures related to the rapid industrialization of an agrarian economy, by conflicts, embargoes, increased tensions or escalation of hostilities between China and Taiwan, and by other trade customs and practices that are dissimilar to those in the United States.

The Severe Acute Respiratory Syndrome (SARS) outbreak in China has reduced our ability to travel to and from Asia-Pacific. This may have an impact on our launch of new products since engineers from the United States or Switzerland typically travel to Suzhou or Taiwan to deal with product launch related issues. If our employees outside Asia cannot meet with the production personnel, the launch of our products could be delayed or we may encounter product quality issues. Interpretation and enforcement of China’s laws and regulations continue to evolve and we expect differences in interpretation and enforcement to continue in the foreseeable future. In addition, our Chinese employees in our Suzhou, China facilities are subject to a number of government regulations regarding employment practices and customs that are fundamentally different in many respects from those in the United States and Europe. The Suzhou facilities are managed by several of our key Taiwanese expatriate employees. The loss of these employees, either voluntarily or because of deterioration in relations between China and Taiwan, may diminish the productivity and effectiveness of our Suzhou manufacturing operations.

We depend on original design manufacturers, contract manufacturers and component suppliers which may not have adequate capacity to fulfill our needs and which may not meet our quality and delivery objectives.

Original design manufacturers and contract manufacturers produce key portions of our product lines for us. Our reliance on them involves significant risks, including reduced control over quality and delivery schedules, the potential lack of adequate capacity and discontinuance of the contractors’ assembly processes. Any financial instability of our manufacturers or contractors could result in our having to find new suppliers, which could increase our costs and delay our product deliveries. These manufacturers and contractors may also choose to discontinue building our products for a variety of reasons. Consequently, we may experience delay in the timeliness, quality and adequacy in product deliveries, any of which could harm our business and operating results.

Lead times for materials and components ordered by us or our contract manufacturers can vary significantly and depend on factors such as the specific supplier, contract terms and demand for a component at a given time. From time to time we have experienced supply shortages and fluctuations in component prices. Shortages or interruptions in the supply of components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs, which could harm our business and operating results.

We purchase key components and products from single or limited sources, and our business and operating results could be harmed if supply is restricted or ends.

We purchase some products and some key components used in our products from single or limited sources. In particular, a significant portion of our cordless keyboards is single-sourced and the sensor in our optical mice is provided by one supplier. We generally do not have long-term agreements with our single or limited sources of supply. If the supply of these products or key components is restricted or ends, we may be unable to find a new supplier at all, or on acceptable terms, or our new and existing product shipments could be delayed, any of which could harm our business and operating results.

If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we will lose sales and may face financial penalties from our customers.

Our business requires us to coordinate the manufacture and distribution of our products over much of the world. We increasingly rely on third parties to manufacture and distribute our products. In addition, we rely on centralized distribution centers that may be managed by third parties. If we do not successfully coordinate the timely manufacture and distribution of our products, we may have insufficient supply of products in our distribution channels to meet customer demand or, alternatively, we may experience a build-up in inventory. Inability to meet customer demand may result in lost sales. For example, during the first quarter of fiscal 2003, we were not able to deliver the full amount of products our customers ordered as a result of inadequate logistical execution. This resulted in a loss of revenue for the quarter. In addition, higher inventory levels can increase warehouse and freight costs, adversely affecting gross margins, as occurred in the fourth quarter of fiscal 2003. Although we are undertaking efforts to address these supply chain issues, if these or similar issues were to occur in our distribution system again, we could lose sales or incur higher distribution costs again. In addition, distributors, retailers and OEMs are increasingly assessing “charge-backs”, or monetary penalties, against suppliers like Logitech for product delivery times, quantities or products that do not match their specifications. If we are unable to deliver quality products in a timely manner, our customers may assess penalties against us that could harm our operating results.

The effect of business, legal and political risks associated with foreign countries and markets could significantly harm us.

We transact a majority of our business outside the United States. There are risks inherent in doing business in international markets, including:

•

difficulties in staffing and managing foreign operations;

•

laws and regulations, including environmental laws, which vary from country to country and over time, increasing the costs of compliance and potential risks of non-compliance;

•

political and financial instability, leading to currency exchange losses, collection difficulties or other losses;

•

difficulties in collecting VAT refunds from the Chinese government;

•

foreign exchange controls; and

•

delays from customs brokers or government agencies.

Any of these risks could significantly harm our business, financial condition and operating results.

We have accumulated a significant VAT refund receivable from the Chinese government and if we do not recover this receivable, our gross margin and operating results could be significantly harmed.

In the normal course of business, we pay value-added taxes, or VAT, in China on components we purchase in China, which are refunded after export of goods manufactured in China. We file for refunds, receive approvals from Chinese tax officials and then receive our refund. Beginning in early fiscal year 2002, approval and refund delays started to occur. As a result, we have accumulated a significant VAT refund receivable that will continue to grow to the extent that our future VAT payments exceed amounts reimbursed by China or sold to third parties. We have received assurances from Chinese officials that all approved claims will be paid in full. In March 2003, we sold a portion of our VAT receivable to a bank on a non-recourse basis for a negotiated discount. If the government were to alter their position with regard to the VAT refund process, if we are unable to collect our VAT receivable for any reason, or if we are unable to negotiate similar non-recourse sales of our remaining or future VAT receivable, we could experience both a one-time charge for the write-down of our VAT receivable and on-going lower margins due to the lack of reimbursement of VAT we have paid, any of which could significantly harm our operating results.

Our introduction of products for non-PC platforms may consume significant resources and not result in significant future revenues.

We will continue to expand our product offerings with new product lines such as headsets for mobile phones, and other products that are outside of our traditional area of expertise. To accomplish this, we have committed resources to develop, sell and market these new products. With limited experience in these product lines and because these products are based on technologies that are new to us, it may be difficult for us to accurately predict revenues, manufacturing costs, customer support costs and product returns. Our ongoing investments in the development and marketing new lines of products could produce higher costs without a proportional increase in revenues.

We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in development of products that compete with our products.

Our future success depends in part on our proprietary technology, technical know-how and other intellectual property. We rely on a combination of patent, trade secret, copyright, trademark and other intellectual property laws, and confidentiality procedures and contractual provisions such as nondisclosure agreements and licenses, to protect our intellectual property.

We hold various United States patents and pending applications, together with corresponding patents and pending applications from other countries. It is possible that any patent owned by us will be invalidated, deemed unenforceable, circumvented or challenged, that the patent rights granted will not provide competitive advantages to us, or that any of our pending or future patent applications will not be issued with claims of the scope sought by us. In addition, other intellectual property laws or our confidentiality procedures and contractual provisions, may not adequately protect our intellectual property. Also, others may independently develop similar technology, duplicate our products, or design around our patents or other intellectual property rights. In addition, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Any of these events could significantly harm our business, financial condition and operating results.

We also rely on technologies that we license or acquire from others. We may find it necessary or desirable in the future to obtain licenses or other rights relating to one or more of our products or to current or future technologies. These licenses or other rights may not be available on commercially reasonable terms, or at all.

Pending lawsuits could adversely impact us.

Through our U.S. subsidiary we are currently involved in pending lawsuits with respect to patent infringement claims by third parties and commercial matters that arise in the normal course of business. We believe that these lawsuits are without merit and intend to defend them vigorously. However, our defense of these actions may not be successful. Any judgment in or settlement of these lawsuits may have a material adverse impact on our business, financial condition and results of operations.

Pending and future litigation and disputes arising over patent infringement claims, commercial matters, or other litigation involving us, whether as plaintiff or defendant, regardless of outcome, may result in significant diversion of effort by our technical and management personnel, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements, any of which could harm our business and operating results.

Our effective tax rates may increase in the future, which could harm our operating results.

We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. If our effective tax rate increases in a future period, our operating results will be adversely impacted, and specifically our net income and earnings per ADS and per registered share will decrease. Our effective tax rate may be affected by changes in or interpretations of tax laws in any given jurisdiction, utilization of net operating losses and tax credit carry forwards, changes in geographical allocation of income and expense, and changes in management’s assessment of matters such as the realizability of deferred tax assets. In the past, we have experienced fluctuation in our effective income tax rate. Our effective income tax rate in a given fiscal year reflects a variety of factors that may not be present in the succeeding fiscal year or years. As a result, our effective income tax rate may increase in future periods, which could harm our operating results.

ITEM 4.

INFORMATION ON THE COMPANY

History and development of the Company

Logitech was incorporated under the laws of Switzerland in 1981, and in 1988, listed its shares in an initial public offering in Switzerland. In March 1997, the Company sold 4,000,000 registered shares from treasury in a U.S. initial public offering in the form of 4,000,000 American Depositary Shares and listed the ADSs on the Nasdaq National Market. Logitech maintains its corporate headquarters through its U.S. subsidiary located at 6505 Kaiser Drive, Fremont, California. Logitech’s telephone number there is (510) 795-8500. The Company also maintains regional headquarters through local subsidiaries in Romanel, Switzerland, Hsinchu, Taiwan, and Hong Kong, China. In addition, Logitech has manufacturing operations in China, with distribution facilities in the United States, Europe and Asia, and sales offices in major cities in the United States, Europe and Asia Pacific.

Important Events and Recent Acquisitions

In April 2002, we acquired the 49% interest we did not previously own in 3Dconnexion, the provider of Logitech’s 3D controllers, for $7.4 million, payable in July 2003 using Logitech shares.

In May 2002, we acquired the 64.8% interest we did not previously own in Spotlife, Inc., whose business was to enhance video communications using the internet infrastructure, for approximately $2.5 million in cash.

Principal capital expenditures and divestitures

Our capital expenditures for property, plant and equipment for the fiscal years ended March 31, 2003, 2002 and 2001 were $28.7 million, $21.9 million and $16.8 million. Principal areas of investment during all three years relate to normal expenditures for tooling costs, machinery and equipment and computer equipment and software.

Principal equity investments

As of March 31, 2003, we have equity investments in privately-held companies totaling $1.5 million. During the years ended March 31, 2003, 2002 and 2001, we made investments of $.4 million, $1.6 million and $5.6 million and sold or wrote-off investments of $2.3 million, $4.3 million and $.5 million.

Business Overview

Logitech is a leader in the design, manufacture and marketing of personal interface products for personal computers and other digital platforms. Today, the computing environment that Logitech serves is centered on the desktop. But as the interface to the digital world moves beyond the desktop and beyond the PC—to the living room,

to the mobile world, to wherever and whenever people interact with digital platforms—the need for personal interface products will broaden. The Company’s product family now includes internet imaging devices such as webcams, mice and trackballs, keyboards, speakers and headsets, interactive gaming controllers, and 3D control devices.

Logitech offers rich and varied access to the world of digital information. The Company’s products provide user-centric solutions intended to be easy to install and easy to use, many of them combined with integrated software for seamless compatibility and added functionality. These products allow users to personalize and enrich their computing environment, and to easily operate in a variety of applications.

Logitech’s personal interface products are often the most frequent point of physical interaction between people and the digital world. As such, they are a significant factor in determining the man-machine interface and increasing its richness. The Company’s products are designed to reflect the way people want to work, play and communicate, allowing them to personalize and enrich their digital experience.

Over the past 20 years, Logitech has established itself as a leading designer, manufacturer and marketer of computer control devices (mice and trackballs). Building on this leadership position, the Company has capitalized on the growth in personal computing by significantly expanding its product line to include a wide range of products, from radio-based cordless input devices to keyboards, digital imaging devices such as web-cams, multimedia speaker systems and PC voice access products. In addition, the Company now produces interface devices for alternate computing platforms, going beyond the traditional desktop to include gaming controllers for console systems, as well as products for the mobile environment such as the digital pen. In every case, the Company’s products bring together the tools that business people, home users, and computer gamers need to make their time at the computer and their time on the Internet more productive, comfortable, and enjoyable. In addition, they feature award-winning industrial design and are engineered to work together.

Through integrated hardware and software functionality, Logitech products are optimized for the internet: internet web cameras enabling “one button” video instant messaging; keyboards and mice that are one click away from the internet; and most recently, software-enabled access to public and private web-cams directly from a mobile phone. These are all examples of the Company’s commitment to ensuring a user-friendly and effective Internet experience.

Logitech’s OEM products are a frequent choice among PC manufacturers, who need high quality, affordable, and functional personal interface products in high volumes.

The Company’s retail products increasingly target and appeal directly to consumers and businesses as they purchase add-on devices for their PCs. Purchasers look for these add-ons to either replace the basic peripherals that originally came with their PCs with devices that offer increased comfort, flexibility and functionality, or as they decide to enable new applications requiring dedicated devices (for example, steering wheels and joysticks for PC and console-based games).

Logitech has long been at the forefront of technological innovation, with a list of more than 50 industry “firsts” to its name and a patent portfolio of more than 90 patents. In pointing devices, the Company led in optical sensing technology with the opto-mechanical mouse in 1982, and the first cordless optical mouse in 2001. The Company was also among the first to market a digital still camera in 1991.

The Company has continually embraced new connectivity technologies and standards. Logitech demonstrated the first working USB prototype at Fall Comdex in 1995. In addition, the Company pioneered digital radio-based cordless mice and keyboards and introduced the first Bluetooth ^™ -based peripheral as well as additional proprietary high-bandwidth cordless devices.

Logitech will continue to monitor the connectivity environment, in order to optimize the user experience when interfacing with digital information.

The Company believes the following to be among its key competitive strengths:

•

Substantial Technical Expertise. Logitech has accumulated significant expertise in the key engineering disciplines that underlie its products. For instance, Logitech’s engineers have continuously enhanced motion-encoding technology for control devices over several distinct generations. Many of these technologies have applications across multiple product offerings, allowing the Company to leverage its accumulated technology investment.

Logitech believes its future lies not only in its strong internal technical resources, but also from partnering with other industry leaders with complementary technologies that promise to make the interface more productive, natural and enjoyable. Examples of this include devices that provide enhanced realism by incorporating force feedback or optical sensing.

•

Technology and Industrial Design Excellence. Logitech understands the balance between features and complexity, functionality and style, price and performance. The Company believes its ability to produce world class, user-centric industrial designs, coupled with innovative technologies that deliver true benefit to the consumer, set it apart from competitors. Logitech has repeatedly received awards for design and innovation. During the past year, the Company’s product design received the following awards: “red dot”, IDEA (Industrial Design Excellence Award), several iF Industrie Forum Design awards, and a CES Innovations Award. Logitech’s cutting-edge technology, evidenced by products such as the Z-680 Speakers, the Pocket Digital Camera, MX700 Mouse, MOMO Racing Force Wheel, and others, garnered numerous top billings—Editors Choice, Product of the Year, Best of What’s New, and more, in a variety of publications such as Popular Science, PC World, Computer Gaming World, Maximum PC, and many additional media worldwide.

•

Retail Brand and Distribution. The Company believes the Logitech brand name and industrial designs are recognized worldwide as symbols of product quality, innovation, ease of use and price performance. The Company enjoys a strong and growing brand presence in more than 100 countries. During the fiscal year ended March 31, 2003, the Company sold over 43 million Logitech branded products. The Company believes that in the consumer market, brand identity and brand awareness are important components of the purchase decision, and that as competition intensifies, the ability to secure shelf space will increasingly become a competitive advantage. Logitech’s brand has enabled the Company to build an extensive retail distribution network and obtain this critical shelf space. Today, the strength of this brand is apparent in the PC OEM channel as well, where systems manufacturers and integrators are choosing to bundle Logitech-branded products with their offerings.

•

Strength on the Desktop. Logitech has expanded its product portfolio to encompass a broad range of interface devices that people use every day as they work, communicate and play at their desktops. The Company’s interface devices bring together on the desktop a broad variety of products that individuals—business people, home users, gamers and others—need to make their time on the Internet and time at the computer more productive, comfortable and enjoyable. As a result, the Company is positioned to offer “one-stop shopping” for accessories that have been designed to work seamlessly together.

Logitech aggressively pursues several important aspects of today’s desktop, including the freedom and flexibility of cordless solutions, easy internet-based visual communication and innovative technologies.

•

Volume Manufacturing Capability Resulting from Strong OEM Relationships. The Company believes its established manufacturing capabilities are a significant competitive advantage. Over the past ten years the Company has built a significant manufacturing presence in Asia where its ISO 9000-certified manufacturing facilities are currently producing over 55 million units per year. As a result, Logitech has been able to maintain strong quality process controls and has realized significant cost efficiencies. Manufacturing expertise extends beyond production to include logistical support, just-in-time supply and process engineering.

This world-class manufacturing capability and expertise allows Logitech to continue its long-established relationships with large OEM customers. The Company currently sells to the majority of the world’s largest PC manufacturers, as well as to most of the next layer of systems manufacturers and integrators. Because Logitech’s engineering and design staff works collaboratively with OEM customers on the specifications for future products, the Company believes its OEM relationships provide it with valuable insight into the future of the computer marketplace and technological trends.

•

Global Presence. Logitech is a global company capable of drawing upon the strengths of its global resources, global distribution system and geographical revenue mix. With manufacturing facilities in Asia, engineering staffs in the U.S., Asia and Europe, major distribution centers in North America, Europe and Asia, as well as sales and marketing offices in major cities worldwide, the Company has access to leading technology, markets, personnel and ideas from around the world. The Company believes that by fostering a strong international culture, it is able to capitalize on the worldwide marketplace by meeting the needs of customers in many countries.

Industry Overview

Increasingly affordable prices and wider availability of business, consumer and education applications have created a very large installed base of personal computers. The market penetration of PCs and other information access devices, already high in developed countries, is likely to increase worldwide.

In addition, continuing growth in processing power and communications bandwidth, the increased accessibility of digital content and the pervasive access and use of the internet, create opportunities for new applications, new users and dramatically richer interactions between users and digital information.

These developments create new demands by users wanting to take full advantage of this increased processing power, new applications and new technologies in an intuitive, productive, comfortable and convenient manner.

Today’s PCs have evolved from productivity tools for word processing into affordable multimedia appliances or “digital hubs” capable of creating and manipulating vast amounts of graphics, sound and video. The interface devices sold with most new units are quite limited in the functionality they provide. This is true especially since the need to offer new personal computers at low prices dictates basic, no frills peripherals, for example a basic mouse and alphanumeric keyboard. Logitech believes the expanded PC capabilities present a significant opportunity for companies that provide innovative personal interface products for the computer, since basic input devices alone cannot effectively harness this new power and fully enable many of the newest applications.

Therefore, on one hand, PC manufacturers continue to require large volumes of simple interface devices. On the other hand, the after-market (that is, the market for peripheral upgrades and add-ons sold separately from the basic PC) grows as consumers demand more function-rich interface tools.

In addition, Logitech believes that trends established in the consumer electronics market, such as brand identity, affordability, ease of installation and use, as well as visual appeal, are rapidly becoming important aspects of PC and personal interface device purchase decisions.

Logitech also believes that personal interface device opportunities increasingly exist around non-PC platforms, such as video game consoles and mobile phones. As these additional platforms deliver added functionality, increased processing power and growing communication capabilities, Logitech expects demand for add-on, complementary devices, connected to these platforms, to increase.

Business Strategy

Logitech’s objective is to strengthen its leadership in the growing market for personal interface products, linking people to the digital world wherever and whenever they need to access digital information to communicate, learn and play. The Company has historically served the installed base of PCs by offering innovative personal interface devices to address the needs of the desktop. Whereas PCs are being used more and more as the digital hub to access information and communicate, other platforms such as game consoles and cell phones are also becoming a rich resource for people to access information, communicate and enjoy an expanding offering of interactive games. We believe that the Company is well positioned to take full advantage of the many opportunities in this growing marketplace.

In order to attain this objective, Logitech intends to pursue new areas for growth while continuing to protect and build on the Company’s current strengths. This strategic direction focuses on personal interface products surrounding three digital environments:

•

The Office—Desktops

•

The Living Room—Game Consoles

•

The Mobile Environment—Notebooks, Cell Phones, and Digital Writing

The Office Environment

Logitech has successfully broadened its penetration of its existing desktop presence by introducing new and more efficient pointing devices into the customer base. In addition, Logitech has expanded beyond its traditional role as a provider of pointing devices for the desktop into a leading brand for video imaging products, keyboards, PC audio products and control devices for 3D CAD/CAM users. The Company has the ability to introduce an even greater number of essential interface devices that people touch and use every day.

The Living Room Environment

As the game console market expands with new platforms such as PlayStation ^® 2, Nintendo GameCube ^™ and Xbox ^™ , we believe our wide range of products will attract a larger number of gamers. Logitech offers a broad spectrum of products including driving wheels, cordless game pads, audio headsets, keyboards, mice and cameras. With many of its products, Logitech can efficiently leverage its investments from one platform—desktop PC’s—into new platforms—game consoles.

The Mobile Environment

As digital information and communication are evolving into the mobile environment, the opportunity exists for Logitech to reach a broader array of platforms. The growing number of users of cell phones and notebook computers

will bring additional demand for complementary personal interface products. Additionally, new technology provides the ability to digitally capture hand written notes and messages, and thus creates further opportunities in the mobile environment. Wherever and whenever people want to access, create or consume digital information, the need for an intuitive interface will remain, and with it the opportunity to deploy Logitech products and design expertise across these environments.

Products

The Company operates in a single industry segment encompassing the design, development, production, marketing and support of personal interface products. Most of the Company’s products share certain characteristics such as common customers, common sales channels and common Company infrastructure requirements.

Logitech’s personal interface products include input and pointing devices such as corded and cordless mice, trackballs, and keyboards; interactive gaming devices for entertainment such as joysticks, gamepads and steering wheels; multimedia speakers; and internet video cameras. The Company’s product families are summarized below.

•

Mice . Logitech offers many varieties of mice, sold through OEM, system builder and retail channels. Most cordless pointing devices from Logitech use our proprietary 27 mHz digital radio technology to transmit data to the host computer, without line-of-sight requirements that characterize cordless peripherals based on infrared technology. Optical technology is rapidly replacing the ball with a tracking system that works via light, using a light beam to illuminate surfaces on which the mouse is traveling. All premium retail models are bundled with MouseWare ^® software, enabling users to program mouse buttons for specific tasks (for example, double-click) and scroll through long documents and web pages. The Company’s newest MX ^™ series of mice is powered by the MX ^™ Optical engine which captures up to 4.7 megapixels of surface tracking information every second. The series features 8 programmable buttons, including a quick switch program selector and a proprietary “cruise control” scrolling system that provides rapid document scrolling. In addition, the flagship product of the MX ^™ family, the cordless, rechargeable MX ^™ 700, uses Fast RF technology for a response rate equal to that of a corded USB connection. The Company also sells both corded and cordless mice that are designed specifically for OEM customers. The Company also introduced its first Bluetooth ^™ product in 2001—the Logitech ^® Cordless presenter, designed for electronic presentations.

•

Trackballs . Logitech produces several trackballs for the retail channel. All corded and cordless models use the Company’s patented Marble ^® optical sensing technology, which enables reliable, accurate operation without the need to regularly clean the device to prevent build-up of dust or grease. The newest Cordless Optical TrackMan ^® trackball features a “cruise control” scrolling feature as well as several new programmable buttons to enhance usability.

•

Keyboards and Desktops . Logitech offers a variety of corded and cordless keyboards, from the newest award-winning top of the line Cordless Desktop ^® MX ^™ , a package that combines a cordless keyboard and MX 700 rechargeable mouse, to the basic Deluxe Access ^® 104, an affordable, attractive corded unit. All premium keyboards offer Logitech’s innovative iTouch ^® software. iTouch ^® features one touch access to various internet sites and key functions, such as listening to music on the web and downloading MP3 files, in addition to quick access to favorite web sites, e-mail and search functions.

•

Digital Pen. The recently introduced Logitech io ^™ digital pen establishes a new category of input devices. The Logitech io ^™ pen, based on the Anoto digital pen and paper technology lets people easily store, organize, and retrieve their handwritten information by simply writing with ink on paper, and share—the way they always have. While using the special Anoto grid paper, an optical sensor embedded in the pen captures the handwritten images, storing up to 40 pages in memory. This captured digital information can then be transferred into the PC by synching the pen via a USB cradle. The Logitech io ^™ solution offers total mobility, since all the user must carry is the pen and a digital paper notebook.

•

Internet Video Imaging Products . Logitech’s QuickCam ^® family of PC video cameras features easy installation and powerful software for enhanced visual communication on the Internet. QuickCam cameras can be used to send images or video clips through email or to complement Instant Messenger applications with real time video. Our QuickCam Pro and QuickCam Web lines integrate a built-in microphone to enhance video conferencing experience.

•

Dual Mode and Digital Still Cameras . Logitech’s ClickSmart ^® family of dual mode cameras can be used to take pictures or short video clips when detached from the PC or used for video communication with someone over the internet in attached mode. The Logitech Pocket Digital ^™ provides an affordable, ultra-portable digital camera for easy picture-to-email applications.

•

PC Game Controllers. Logitech provides a full range of controllers for PC gamers. The products address key game genres: joysticks for flying, steering wheels for driving, and gamepads for sports, action, and adventure games. Though the products are very different in nature due to their different target applications, they are united by Logitech’s attention to quality and excellence of design. They also share some core Logitech technologies, such as cordlessness, force feedback, and optical sensing. Logitech consistently breaks new ground in PC game controllers with such award-winning products as the Logitech MOMO ^® Force steering wheel and the Logitech Freedom 2.4 cordless joystick.

•

Console Game Controllers and Accessories. Since entering the console market two years ago, Logitech has consistently broadened its line with popular products in strategic segments. Logitech is now offering products for all three of the top platforms (PlayStation ^® 2, Xbox ^™ , and GameCube ^™ ) and is working closely with those platform providers and game developers throughout the world to develop important new applications and technologies for this market. With its expertise in force and vibration feedback, cordlessness, voice input, and video input, Logitech is enabling a broad range of new gaming experiences. Logitech provides retail hardware, such as the Logitech Driving Force ^™ wheel and Logitech Cordless Controllers, and OEM hardware including the USB headset (bundled with Sony Computer Entertainment’s SOCOM: U. S. Navy SEALs) and the Sony EyeToy ^™ camera. To enable this hardware and ensure high-quality support within games, Logitech also provides state-of-the-art software drivers and tools to game developers.

•

Multimedia Speakers. The Company’s multimedia speakers are designed for three different user groups: Basic PC users listening for the sounds of audio affirmation from multimedia software such as e-mail and educational or basic music applications; Audio Enthusiasts wanting full fidelity music from CDs, MP3s, and DVD programs; and Gamers/Desktop theater users desiring the most involved surround sound experience. The Company offers a range of models from its flagship multi-platform Logitech Z-680 speakers (simultaneously working with PCs, game consoles, and DVD players) with 500 watts of power, THX approval, and 5.1 channels—to high volume, entry-level 2-piece speaker systems. The flagship models consistently garner multiple best in class awards, which affirm Logitech’s brand in the speaker space.

•

PC and Game Console Headsets and Microphones : Logitech offers a complete line of voice access headsets and microphones. This line is designed to provide the best performance from many PC and game console applications, including voice-over-internet communication, speech recognition, and video game voice command. Logitech is the world’s largest producer of USB headsets for PCs and game consoles.

•

Mobile Phone Headsets. This recently introduced line consists of innovatively designed corded headsets that address the active lifestyle of users, as well as new cordless models offering advanced technologies. Extensive research drove the invention of proprietary patent pending designs, which enable the Company to create headsets that are more compatible with the “on the go” lifestyle of mobile phone users. The headset designs are cost effective, making the products price competitive, while providing an enhanced user experience.

•

3D Motion Controllers. The Company’s subsidiary, 3Dconnexion, offers 3D input devices for the growing field of 3D motion control, used in the CAD (Computer Aided Design), EDA (Electronic Design Automation), GIS (Geographic Information Systems) and DCC (Digital Content Creation) markets. Over 200,000 professionals use 3Dconnexion motion controllers, including its SpaceBall ^® , SpaceMouse ^® , CadMan ^® , and SpaceNavigator ^™ . All 3Dconnexion motion controllers leverage the productivity benefits and comfort of working with two hands—one hand on the mouse to select, modify or annotate, and the other hand on the motion controller to navigate.

Technology

Logitech products are sophisticated systems that combine multiple engineering disciplines—lightweight radio frequency transmission, optical, mechanical, electrical, acoustical and software—and incorporate both cognitive and physiological elements in user-centric industrial designs. These systems share common design elements, including: sensors to detect and encode motion, images, sound or other analog data into electrical signals; custom ASICs; microcontrollers to convert and process signals received from the sensor; a communications subsystem to exchange signals with an attached computer or other intelligent host; and a suite of driver, utility and user interface software modules and web sites. The Company believes these software modules and web support complete a seamless user-centric solution for information input, access and control. Logitech’s products incorporate the following principal technologies:

•

Motion Sensing. The Company’s sensors transform analog motion and images into electronic signals. Logitech was the first to introduce optical sensing in pointing devices. For example, all of Logitech’s patented Marble ^® products utilize an optical trackball sensor, greatly improving trackball accuracy and durability. Similarly, Logitech’s digital cameras utilize optical sensors to detect colors, shapes and other image attributes and convert these attributes into electronic signals. Through a variety of sophisticated sensing and encoding techniques, Logitech has been able to improve the optical sensing quality, lower the cost, and increase the reliability of its optical mouse products.

•

Signal Processing Algorithms. Logitech engineers employ sophisticated signal processing algorithms across many product lines to compute spatial displacements, enhance color image quality and compress or format data for transmission. For example, in the Company’s internet video cameras, signal-processing algorithms are used for color extraction, image enhancement and data compression.

•

Power Management. The Company’s products utilize advanced power management including techniques to reduce power consumption when needed. Cables connected to separate power supplies are inconvenient in the case of products such as corded pointing devices, and impossible in the case of cordless devices. Consequently, the Company believes low power consumption is an essential product attribute for the consumer marketplace. In addition, with up to 127 devices potentially drawing power from a single USB port, the Company believes its power management expertise is particularly important for USB products.

•

RF Technologies and Cordless Product Design. The Company has been at the forefront in the development and supply of low power radio frequency (RF) technology for use over short distances. The Company is focusing its current cordless development efforts primarily on RF devices with our new MX series of mice reflecting the latest Fast RF Cordless technology. Logitech believes the Bluetooth ^™ Cordless Standard, a communications standard, will be an enabler to a much wider acceptance of cordless products in the marketplace, thus boosting the growth of companies active in this market segment. With the Cordless Presenter ^™ , the Company introduced its first Bluetooth ^™ personal interface product.

•

Force Feedback. Force feedback adds a real physical sensation to computer and console systems, enabling users to feel surfaces, bumps, vibrations, textures, inertia, liquids, springs, and many other compelling physical phenomena. This licensed technology is primarily used in joysticks and steering wheels where game players can experience the actual physical sensation of being at the controls of a fighter jet or at the wheel of a racing car.

•

Software. The growth of the internet is providing new technical challenges and opportunities for the Company. The Company is focusing its development efforts on the interface to the internet, communications over the internet, and security on the internet, with products and services like iTouch and video instant messaging. Software technologies such as object based programming and tight integration between the hardware device and application, enable easier to use interactions and Internet service access.

•

Audio . The Company’s audio development resources cover a wide range of audio technologies. In speaker systems, the Company utilizes advanced computer aided design tools for amplifier and PCB design. Sophisticated laser and PC based technologies support speaker transducer design. For headsets, in-house engineering and testing technology ensure high resolution voice recognition microphones. Computer aided design and in-house rapid prototyping technology speed the overall process and help assure that products meet design and performance goals.

Research and Development

The Company believes that continued investment in product research and development is critical to its continued success. The Company believes that its international structure provides advantages and synergies to its overall product development efforts. Logitech’s product research and development activities are mainly conducted at five engineering centers located in Fremont, California; Vancouver, Washington; Romanel-sur-Morges, Switzerland; Hsinchu, Taiwan; and Seefeld, Germany.

The location of the Company’s Fremont, California facility allows the Company access to Silicon Valley’s talent pool, particularly important in the development of internet applications, software and video technologies. In addition, this location in the midst of the world’s leading technology market enables the Company to compile market intelligence to define and position products and develop key strategic alliances.

Logitech’s Swiss engineering center provides the Company with advanced sensing and cordless technologies. In addition, the Swiss center is a convenient point for gaining access to leading European technologies. Logitech has been successful in recruiting and retaining top engineering graduates from leading Swiss universities because it is one of the few computer technology companies in Switzerland.

Through its Taiwanese subsidiary, the Company has established access to key Asian markets, engineering resources and high-tech manufacturing. Taiwan is a world leader in manufacturing and engineering. In particular, Taiwan is a world leader in the design and manufacture of semiconductors, notebook computers, scanners, monitors and related products, and possesses a concentration of firms that specialize in advanced plastic injection blow molding and tooling. Moreover, the common language of Taiwan and China facilitates the transfer of products from

the Company’s engineering launch site in Taiwan to its high volume manufacturing site in China.

Logitech’s Vancouver, Washington engineering center designs and develops all of the Company’s audio products. The facility specializes in acoustic research and development, including model and simulation work. Areas of development cover cordless audio applications, demanding applications for audio input such as voice recognition, and audio output for PC speakers. Test capabilities include theoretical environments in an anechoic chamber, real-world environments for office settings, and pre-compliance testing.

The Company’s subsidiary, 3Dconnexion, whose research and development facility is located in Seefeld, Germany, provides the Company with its ongoing research in 3D controller devices. The location of the facility provides Logitech with access to Germany’s leading automotive manufacturers who are also important 3Dconnexion customers. In addition, this facility is in close proximity to the Munich office of the German Aerospace Center, a leading research center in robotics and from whom we have licensed some of our 3D technology.

The Company’s research and development expenses for fiscal years 2003, 2002 and 2001 were $56.2 million, $50.5 million and $36.7 million. The Company expects to continue to devote significant resources to research and development to sustain its competitive position.

Marketing, Sales and Distribution

The primary end-user markets for Logitech mice, trackballs and keyboards are consumers, small office and home office (“SoHo”) users, and, through its OEM customers, corporate buyers. The primary end user market for Logitech entertainment devices, such as joysticks, gamepads and steering wheels, is consumers. The primary end-users for Logitech’s audio products are consumers, SoHo, and OEM customers. The Company’s end user markets for its PC video cameras are SoHo users, corporate buyers and consumers. Logitech’s primary end user markets are in North America, Europe and Asia-Pacific. However, it also markets its products in Latin America, the Middle East, Africa and other regions.

Logitech builds awareness of its products and brand through targeted advertising, public relations efforts, in-store promotions and merchandising, a worldwide website and other efforts. It also develops knowledge of its end users through customer feedback and market research, including focus groups, product registrations, end user questionnaires, primary and multi-client surveys and other techniques. In addition, manufacturers of PCs and other products also receive customer feedback and perform end user market research, which sometimes result in specific requests to the Company for specific products, features or enhancements.

Logitech sells through many distribution channels, including distributors, OEMs and regional and national retail chains, including online retailers. The Company supports these retail channels with distribution centers located in the United States, Europe and Asia. These centers perform final configuration of products and product localization with local language manuals, packaging, software CDs and power plugs. In addition, Logitech’s distribution mix includes electronic commerce in the U.S. as well as e-commerce capabilities in several European countries.

Logitech sells to large OEM customers through a direct sales force and supports smaller OEM customers through distributors. The Company counts the majority of the world’s largest PC manufacturers among its customers.

In retail channels, Logitech’s direct sales force sells to distributors and large retailers. Its distributor customers typically resell products to retailers, value-added resellers, and system integrators with which Logitech does not have a direct relationship. These distributors in the U.S. include Ingram Micro Inc. and Tech Data Corporation, and in Europe include Tech Data Corporation, Ingram Micro, Actebis and many strong national distributors such as Banque Magnetique in France.

Logitech’s products can be found in major retail chains, where they typically enjoy access to significant shelf space. These chains in the U.S. include Best Buy Co., Inc., CompUSA, Inc., Office Depot, Inc., Staples, Inc., Target and Wal-Mart, and in Europe include Media Markt, Carrefour, FNAC, Dixons Stores Group PLC and most key national consumer electronics chains. Logitech products also can be found at the top online etailers, which include Amazon.com, Buy.com, CDW, Insight, MicroWarehouse, and others.

Through its operating subsidiaries, the Company maintains sales offices or sales representatives in over 20 countries, and throughout the United States.

Principal Markets

The Company operates in one business segment, which is the design, development, production, marketing and support of personal interface devices.

Net sales to unaffiliated customers by geographic region were as follows:

	Year ended March 31,
	2003		2002		2001
	(In thousands)
Europe	$	487,762	$	413,348	$	334,414
North America		435,612		389,949		278,935
Asia Pacific		176,914		140,249		122,200

Net sales	$	1,100,288	$	943,546	$	735,549

Customer Service and Technical Support

Through its operating subsidiaries, the Company maintains customer service and technical support operations in the United States, Europe, Asia and Australia. Customer service and technical personnel provide support services to retail purchasers of products via telephone, facsimile and the Logitech web site. This site is designed to expedite overall response time while minimizing the resources required for effective customer support. In general, OEMs provide customer service and technical support for their products, including components purchased from suppliers such as Logitech. The Company provides a one to five year warranty on its branded retail products.

Manufacturing

The Company’s manufacturing operations consist principally of final assembly and testing. Logitech’s high-volume manufacturing is located in Suzhou, China. The Suzhou facilities are designed to allow production growth as well as flexibility in responding to changing demands for the Company’s products. The Company continues to focus on improving the efficiency at the Suzhou facilities, including the implementation of total quality management and total employee involvement programs.

New product launches, process engineering, commodities management, logistics, quality assurance, operations management and management of our original design manufacturers occur in Hsinchu, Taiwan, Suzhou, China and Hong Kong, China. Certain components are manufactured to the Company’s specifications by vendors in Asia, the United States and Europe. Logitech also utilizes contract manufacturers to supplement internal capacity, to reduce volatility in production volumes and to reduce the transit time from final assembly to regional distribution centers. In addition, certain products, including keyboards, certain gaming devices and our audio products, are manufactured by third-party suppliers to the Company’s specifications. Retail product localization with local language manuals, packaging, software CDs and power plugs is performed at distribution centers in the United States, Europe and Asia.

Competition

See discussion in Item 3.D Risk Factors—“ If we do not compete effectively, demand for our products will fall and this could result in reduced revenues, margins, and profitability .”

Intellectual Property and Proprietary Rights

Intellectual property rights that apply to our products and services include patents, trademarks, copyrights and trade secrets.

We hold a number of patents and pending applications from the U.S., as well as from other countries. While we believe that patent protection is important, we also believe that patents are of less competitive significance than factors such as technological expertise, ease-of-use, and quality design. No single patent is in itself essential to us as a whole. From time to time we receive claims that we may be infringing patents or other intellectual property rights of others. When we receive such claims, we refer them to our counsel, and current claims are in various stages of evaluation and negotiation. If we determine that it is necessary or desirable, we may seek licenses for certain intellectual property rights. However, we can give no assurance that we will be able to obtain licenses from any claimant, that we can accept the terms of any offered licenses, or that litigation will not occur. The failure to obtain necessary licenses or other rights, or litigation arising out of such claims, could adversely affect our business. See also the discussion in Item 3.D Risk Factors— “We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in development of products that compete with our products.”

To distinguish genuine Logitech products from those of our competitors and makers of counterfeit products, we have used, registered, and/or applied to register certain trademarks and trade names in the U.S. and in foreign countries and jurisdictions. We enforce our trademark and trade name rights in the U.S. and abroad. In addition, the software for our products and services is entitled to copyright protection, and we generally require our customers to obtain a software license before we provide them with that software. We also protect details about our products and services as trade secrets through employee training, license and non-disclosure agreements and technical measures.

Governmental Regulation

We are subject to various safety, environmental, electrical and mechanical governmental regulations that exist throughout the world. The effects of these government regulations on our business are limited to the cost of allocation of the appropriate resources for agency fees and testing as well as the time it takes to obtain agency approvals. The costs and schedule requirements are industry requirements and therefore do not represent an undue burden relative to our competitive position. As regulations change, we must modify our products or processes to address these changes.

Seasonality

Logitech’s retail sales are seasonal. Our sales are typically highest during our third fiscal quarter, due primarily to the increased demand for our products during the year-end holiday buying season, and to a lesser extent in the fourth fiscal quarter. Our sales in the first and second quarters can vary significantly as a result of new product introductions and other factors.

Materials

We purchase some of our products and key components used in our products from single or limited sources. In particular, a significant portion of our cordless keyboards is single-sourced and the sensor in our optical mice is provided by one supplier. See discussion in Item 3.D Risk Factors— “We purchase key components and products from single or limited sources, and our business and operating results could be harmed if supply is restricted or ends.”

Organizational Structure

The following is a listing of our significant subsidiaries:

Name	Incorporated in	Ownership Interest
Logitech Inc.	U.S.	100%
Logitech Far East Ltd.	Taiwan	100%*
Suzhou Logitech Electronics Co. Ltd.	China	100%
Logitech Europe S.A.	Switzerland	100%

Due to local legal requirements, there are holders of nominal shares apart from Logitech.

Property, plant and equipment

Logitech’s U.S. subsidiary has headquarters in Fremont, California in a leased building comprising approximately 116,000 square feet. This facility is also occupied by Logitech’s Americas headquarters, including research and development, product marketing, sales management, technical support and administration. The Company’s Fremont lease expires in March 2006.

The audio business unit is located in 17,822 square feet of leased office space in Vancouver, WA. The Company also leases an 80,000 square foot warehouse facility in Vancouver, WA. Both of these leases have terms through April 2006. The warehouse facility is no longer being used as the Company has moved all of its North American distribution to Memphis, Tennessee.

Logitech’s Europe headquarters are in Romanel-sur-Morges, Switzerland. This Company-owned facility comprises 33,300 square feet and includes research and development, product marketing, sales management, technical support, administration and certain Logitech group activities including finance.

Logitech’s worldwide operations headquarters are in a Company-owned 112,000 square foot facility in Hsinchu, Taiwan, and includes mechanical engineering, new product launches, process engineering, commodities management, logistics, quality assurance, and administration. Personnel in Hsinchu through the use of externally administered warehouses in Taiwan, China and Singapore manage distribution of product throughout Asia. Logitech’s high volume manufacturing is located in Suzhou, China, in a Company-owned 253,700 square foot building and a leased 91,500 square foot building. The lease is due to expire in July 2003; we intend to renegotiate and extend the term.

Logitech has major distribution centers in Memphis, Tennessee, Nijmegen and Tilburg, the Netherlands and Hsinchu, Taiwan. The Memphis facility is contracted with a warehouse management company who leases and manages the distribution center for Logitech. The Memphis warehouse facility is 325,000 square feet, and our arrangement with the management company is through May 2005. Our Nijmegen location manages the logistics for our European retail business including a warehouse in Tilburg, The Netherlands. The Nijmegen facility consists of 13,300 square feet and is subject to a lease due to expire in July 2005. The Tilburg facility is the main distribution location in Europe and is contracted with a warehouse management company who leases and manages the distribution center for Logitech. The Tilburg warehouse is 270,228 square feet and our arrangement with the management company is through February 2004. Logitech also contracts with various distribution services throughout the world for additional warehouses in which the Company stores inventory.

Logitech’s subsidiary, 3Dconnexion, has leased a 4,600 square foot office in Los Gatos, California through the year 2006. In Seefeld, Germany, 3Dconnexion has leased 12,400 square feet through the year 2010 for its European headquarters, research and development and manufacturing. In addition, 3Dconnexion leases sales offices in Michigan, Texas, France and Poland with various expiration dates through 2004.

Logitech also has sales offices in approximately 40 locations in over 20 different countries. These offices are leased with various expiration dates from 2003 to 2010.

We believe that our current facilities will be adequate for our needs for the foreseeable future.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This annual report to shareholders contains forward-looking statements that involve risks and uncertainties. The Company’s actual results could differ materially from those anticipated in these statements as a result of certain factors, including those set forth above in Item 3, “Risk Factors”, and below in Item 11, “Quantitative and Qualitative Disclosure About Market Risk”.

Overview

Logitech International S.A. designs, manufactures and markets personal interface products and supporting software that serve as the primary physical interface between people and their personal computers and other digital platforms. The Company’s products include corded and cordless mice, trackballs, and keyboards; joysticks, gamepads, and racing systems; internet video cameras; speakers, headsets and microphones; and 3D controllers.

The Company sells its products through two primary channels, original equipment manufacturers (“OEMs”) and a network of retail distributors and resellers (“retail”). Products sold to OEMs, principally pointing devices, are generally resold to end users bundled with new PCs. Sales to OEMs as a percentage of total net sales can vary significantly and have ranged from 13% to 33% on a quarterly basis over the past three fiscal years.

Logitech was founded in Switzerland in 1981, and in 1988 listed its shares in an initial public offering in Switzerland. In 1997, the Company sold shares in a U.S. initial public offering in the form of American Depositary Shares (“ADS”), and listed the ADSs on the Nasdaq National Market System. The Company’s corporate headquarters are in Fremont, California through its U.S. subsidiary, with regional headquarters in Romanel, Switzerland, Hsinchu, Taiwan and Hong Kong, China through local subsidiaries. In addition, Logitech has its principal manufacturing operations in China, with distribution facilities in the United States, Europe and Asia.

Results of Operations

The following table sets forth certain consolidated financial statement amounts in thousands and as a percentage of net sales for the periods indicated:

	Year ended March 31,
	2003					2002					2001
Net sales	$	1,100,288		100.0	%	$	943,546		100.0	%	$	735,549		100.0	%
Cost of goods sold		735,784		66.9			627,998		66.6			502,290		68.3

Gross profit		364,504		33.1			315,548		33.4			233,259		31.7
Operating expenses:
Marketing and selling		141,194		12.8			130,060		13.8			105,140		14.3
Research and development		56,195		5.1			50,531		5.3			36,686		5.0
General and administrative		43,233		3.9			37,739		4.0			33,484		4.6
Purchased in-process research and development		—		—			—		—			3,275		0.4

Total operating expenses		240,622		21.8			218,330		23.1			178,585		24.3

Operating income		123,882		11.3			97,218		10.3			54,674		7.4
Interest expense, net		(1,196	)	(0.1	)		(1,956	)	(0.2	)		(148	)	—
Other income (expense), net		866		0.1			(1,567	)	(0.2	)		2,628		0.3

Income before income taxes		123,552		11.3			93,695		9.9			57,154		7.7
Provision for income taxes		24,709		2.3			18,739		2.0			12,086		1.6

Net income	$	98,843		9.0	%	$	74,956		7.9	%	$	45,068		6.1	%

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America (“U.S. GAAP”) and in compliance with relevant Swiss law, requires us to utilize accounting policies and make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses. We believe the following accounting policies and estimates are the most critical to our business operations and to understanding our results of operations. They should be read in conjunction with our consolidated financial statements.

Revenue Recognition

Revenues are recognized when all of the following criteria are met:

•

evidence of an arrangement exists between the Company and the customer;

•

title and risk of loss transfers to the customer;

•

the price of the product is fixed or determinable; and

•

collectibility of the receivable is reasonably assured.

Revenues from sales to distributors and authorized resellers are subject to terms allowing certain rights of return, price protection and allowances for customer marketing programs. Accordingly, allowances for estimated future returns, price protection and customer marketing programs are recorded upon revenue recognition. Upon shipment of the product, we record an estimate of potential future product returns related to revenue recorded in the period. Management analyzes historical returns, distributor inventory levels, current economic trends and changes in customer demand and acceptance of our products when evaluating the adequacy of the sales returns allowances. We also record reductions to revenue for the estimated cost of customer programs and incentive offerings including special pricing agreements, price protection, promotions and other volume-based incentives. Significant management judgments and estimates must be used in connection with establishing these allowances in any accounting period. If market conditions were to deteriorate, the Company may take actions to increase customer incentive offerings possibly resulting in an incremental reduction of revenue at the time the incentive is offered.

Accounts Receivable

We also estimate the uncollectability of our accounts receivable, and we maintain allowances for estimated losses. Management analyzes accounts receivable, historical bad debts, receivable aging, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventory Reserves

We evaluate our inventory for estimated excess and obsolete amounts as well as declines in marketability based upon technology trends, our plans for the product and assumptions about future demand and market conditions. If a sudden and significant decrease in demand for our products occurs, or if rapidly changing technology and customer requirements results in a higher risk of excess inventory or obsolescence, we may be required to increase our inventory allowances and our gross margin could be adversely affected.

Accounting for Income Taxes

We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective tax rate may be affected by the changes in or interpretations of tax laws in any given jurisdiction, utilization of net operating losses and tax credit carryforwards, changes in geographical mix of income and expense, and changes in management’s assessment of matters such as the ability to realize deferred tax assets. As a result of these considerations, we must estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheet. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income, and establish a valuation allowance for any amounts we believe will not be recoverable. Establishing or increasing a valuation allowance increases our income tax expense.

Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We have recorded a valuation allowance at March 31, 2003, due to uncertainties related to our ability to utilize some of our deferred tax assets before they expire. The valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. In the event that actual results differ from these estimates or we adjust these estimates in future periods we may need to establish an additional valuation allowance which could materially impact our financial position and results of operations.

Valuation of Long-Lived and Intangible Assets and Goodwill

We review for impairment of long-lived assets, such as investments, property and equipment, and goodwill and other intangible assets, whenever events indicate that the carrying amount might not be recoverable. Factors we consider important which could trigger an impairment review include the following:

•

significant underperformance relative to historical or projected future operating results;

•

significant changes in the manner of our use of the acquired assets or the strategy for our overall business;

•

significant negative industry or economic trends;

•

significant decline in our stock price for a sustained period; and

•

our market capitalization relative to net book value.

When Logitech determines that the carrying value of intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators, we measure any impairment based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our current business model.

Logitech completed an annual impairment review of goodwill in fiscal 2003 and determined that goodwill is not impaired. As the Company has fully integrated Labtec as well as previously acquired companies, discrete financial information for the acquisitions is no longer available. As a result, Logitech completed the impairment test of Labtec goodwill on an enterprise value basis.

Recent Developments

On April 5, 2002, the Company acquired the 49% interest it did not previously own in 3Dconnexion, the provider of Logitech’s 3D controllers, for $7.4 million, payable in July 2003. 3Dconnexion’s assets and liabilities have been included in the Company’s consolidated financial statements since acquiring a controlling interest at September 30, 2001, and its results of operations have been included since October 1, 2001. The impact of 3Dconnexion’s assets, liabilities and results of operations was not material to the Company’s sales, results of operations, financial position, cash flows or earnings per share.

On May 3, 2002, the Company acquired the 64.8% it did not previously own of Spotlife Inc. for approximately $2.5 million in cash. The acquisition was accounted for using the purchase method of accounting. The impact of Spotlife’s assets, liabilities and results of operations was not material to the Company’s financial position, sales, results of operations, cash flows or earnings per share.

Year Ended March 31, 2003 Compared to Year Ended March 31, 2002

Net Sales

Net sales for the year ended March 31, 2003 increased $157 million or 17% to $1.1 billion. This growth came primarily from the Company’s corded mice, keyboards, desktop, video, and audio products. With approximately 49% of the Company’s sales denominated in currencies other than the U.S. dollar, the Company estimates that the impact on net sales of the stronger Euro along with the impact of exchange rate changes in the Japanese Yen and Taiwanese Dollar relative to the U.S. dollar, was to increase sales by $51 million; this calculation does not take into account the impact these currency fluctuations have on our global pricing strategy which results in us lowering or raising selling prices in one currency to avoid disparity with U.S. dollar prices.

Retail sales grew by 15% despite flat sales in North America during the second half of the year and warehouse transition issues encountered in North America in the first quarter of fiscal 2003 when the Company consolidated two warehouses located on the west coast and moved them to a third-party distribution center in Memphis, Tennessee. The transition issues included a combination of physical lay out, systems, management and other process issues at our third-party logistics provider and reduced our ability to ship product to our North American retail customers in the months of May and June 2002.

The retail sales growth was mainly from keyboards, desktops, corded mice, audio, and video products. Our sales of pointing devices increased by 14%, with unit volumes increasing by 13%, driven by strong growth in our sales of corded mice. Sales of keyboard and desktop products increased by 24% while volume grew 40% over the last year. Sales growth was primarily from the corded keyboards and cordless desktop lines. Growth in our corded keyboards was driven by strong sales of our value priced corded keyboards across all regions. The growth in our cordless desktop lines reflects strong demand for our cordless products as consumers continue to upgrade their personal computers with peripherals purchases. Video sales increased by 16% with unit volume increasing 3% compared to

last year. This was primarily due to continued demand for our PC web cameras with contributions from the sales of the Logitech Pocket Digital camera introduced in May 2002. Our sales of interactive entertainment products for gaming consoles decreased by 14% and the unit volumes increased by 13%. The decline in sales was due to the decrease in demand for the GT Force Steering Wheel for PlayStation ^® 2 introduced in late fiscal 2001 and early 2002 partially offset by sales of our new products, the cordless controller for the PlayStation ^® 2, introduced in September 2002, and the Xbox introduced in December 2002. The increase in volume was related to the cordless controllers, which have a lower average selling price compared to the GT Force Steering Wheel console products sold in 2002. Despite the popularity of gaming console devices, the market demand for PC gaming products has continued to decline, and as a result our sales of PC gaming peripherals have declined by 10% as compared to last year while our volume grew by 5%. The increase in volumes was due to strong demand in the fourth quarter for PC steering wheels. Sales of our audio products grew by 13% with unit volumes decreasing by 28%. The sales increase was due to the continued success of the Logitech branded Z series PC speaker family, which was partially offset by lower demand for the Company’s value-priced Labtec branded product lines. The lower demand for the Labtec branded products drove the unit volume decreases.

OEM sales increased by 23% compared to last year, principally due to the significant sales in audio products and cordless desktops. The Company’s OEM audio sales were driven by sales of our USB headsets for the PlayStation2.

Gross Profit

Gross profit consists of net sales, less cost of goods sold which includes materials, direct labor and related overhead costs, costs of manufacturing facilities, costs of purchasing finished products from outside suppliers, distribution costs and inventory reserve provisions. Gross profit increased 16% to $365 million. This increase came from higher sales volumes partially offset by the slight decrease in gross margin.

Gross margin (gross profit as a percentage of net sales) decreased from 33.4% to 33.1%. The decrease was primarily due to higher warehousing and freight costs related to higher inventory levels during the second half of the fiscal year. This inventory growth was driven by a combination of the North American west coast dock strike, logistical inefficiencies and the decision to carry more inventory to meet expected customer demand. The decrease in gross margin was also partially due to our channel mix. Our sales mix in fiscal 2003 included a higher percentage of OEM sales, which have a lower margin than retail sales.

Operating Expenses

Marketing and Selling

Marketing and selling expenses consist of personnel and related overhead costs, corporate and product marketing, promotions, advertising, trade shows, customer and technical support and facilities costs. Marketing and selling expense increased 8.6% to $141.2 million. This increase was directly related to the Company’s increased sales performance resulting in higher commission expenses, marketing initiatives related to the introduction of new products, particularly the io Pen, and marketing programs related to cordless products. In addition, the increase also related to the strengthening of the Euro and Swiss Franc relative to the U.S. dollar. As a percentage of sales, marketing and selling costs decreased from 13.8% to 12.8%.

Research and Development

Research and development expenses consist of personnel and related overhead costs, contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and the enhancements of existing products. Research and development expenses increased 11.2% to $56.2 million. The increase was mainly due to the higher personnel expenses relating to the development of new products. In addition, the increase also related to the strengthening of the Euro and Swiss Franc relative to the U.S. dollar. As a percentage of sales, research and development decreased from 5.3% to 5.1%.

General and Administrative

General and administrative expenses consist primarily of personnel and related overhead and facilities costs for the finance, information systems, executive, human resources, and legal functions. General and administrative expense for the year ended March 31, 2003 increased 14.6% to $43.2 million. This increase was primarily due to increased information technology costs in support of the engineering, operations and human resource functions. In addition, the increase also related to increased personnel to support the growth of our business and the strengthening of the Euro and Swiss Franc relative to the U.S. dollar. As a percentage of sales, general and administrative decreased from 4.0% to 3.9%.

Interest Expense, Net

Interest expense for the year ended March 31, 2003 was $1.2 million, compared to $2.0 million in 2002. Interest was higher last year because of short-term borrowings of $35 million in March 2001 and $55 million in April 2001 to finance the Labtec acquisition and repay Labtec obligations and credit lines. This debt was repaid in June 2001 through the issuance of the convertible bonds bearing interest at an effective rate of 1.96%.

Other Income (Expense), Net

Other income was $.9 million for the year ended March 31, 2003, compared to other expense of $1.6 million last year. Other income this year included $2.8 million of favorable fluctuations in exchange rates offset by a $1.7 million loss from investment write-downs and the sale of shares of investments. Other expense last year included the $1.2 million write-off of an investment and $2.5 million of losses recorded for investments accounted for under the equity method, partially offset by the $1.1 million gain on the sale of shares in Immersion and $.6 million of proceeds from a property loss insurance claim.

Provision for Income Taxes

The provision for income taxes consists of income and withholding taxes. The provision for income taxes for the year ended March 31, 2003 was $25 million compared to $19 million, representing a 20% effective tax rate in 2003 and 2002.

Year Ended March 31, 2002 Compared to Year Ended March 31, 2001

Net Sales

Net sales for the year ended March 31, 2002 increased $208 million or 28% to $944 million. This growth was shared across all product categories, but primarily came from the Company’s pointing device products, the audio products associated with the acquisition of Labtec and from the Company’s desktop products. The Euro’s loss in value compared to the U.S. dollar restrained sales growth for fiscal year 2002. With approximately 52% of the Company’s sales denominated in currencies other than the U.S. dollar, the Company estimated that the impact on net sales of the weakening Euro along with the impact of exchange rate changes in the Japanese Yen and Taiwanese Dollar relative to the U.S. dollar, was to decrease sales by $24 million; this calculation does not take into account the impact these currency fluctuations have on our global pricing strategy which results in us lowering or raising selling prices in one currency to avoid disparity with U.S. dollar prices.

Net sales reflect the impact of the Labtec acquisition beginning in fiscal 2002. If the Company had acquired Labtec at the beginning of fiscal 2001 and Labtec sales were included in the results for fiscal year 2001, the sales growth would have been $121 million or 15% for the year ended March 31, 2002.

Retail sales grew by 42% over the prior year. This growth was shared across all product categories. Retail sales of the Company’s pointing devices, which include mice and trackballs, grew by 22% while unit volumes grew by 24%. Driven by the Company’s cordless optical wheel mouse, cordless mice were a significant source of this strong growth, with 103% growth in sales and 73% growth in unit volumes. Even with this growth, mice represent 37% of the Company’s total retail sales compared to 38% in the prior year, reflecting the Company’s expanded retail product offerings. Sales of desktop products grew by 45% and unit volumes grew by 64%, with the majority of the growth coming from cordless desktop products. In the PC video camera business, retail sales grew 17% and unit volumes increased by 26% over fiscal 2001. This growth was driven primarily by our strong performance across all video products. Sales of interactive entertainment products grew by 25% while unit volumes declined by 7%. This unit volume decrease reflects volume decreases in sales of joysticks and gamepads which were offset by the strong sales of the higher value GT Force Steering Wheel for PlayStation ^® 2. The Company’s audio products, which include a full range of PC headsets, speakers and headphones, added eleven percentage points of absolute growth to retail sales during fiscal year 2002.

OEM sales declined by 15% compared to the prior year, principally due to the significant sales of PC video cameras in fiscal 2001 coupled with sluggish sales of new PCs in fiscal year 2002.

Gross Profit

Gross profit increased 35% to $316 million, due primarily to significantly higher sales volume. Gross margin (gross profit as a percentage of net sales) increased from 31.7% to 33.4%. This improvement reflected a shift toward higher margin retail products in the sales mix and improved product margins in several retail categories. In particular, retail product margins for pointing devices, video and entertainment products improved primarily due to

manufacturing cost reductions. OEM product margins also increased due to both continued cost reductions and a sales mix of higher margin products.

Operating Expenses

Marketing and Selling

Marketing and selling expense increased 24% to $130 million. This increase was directly related to the Company’s increased sales performance and marketing initiatives aimed at strengthening the Company’s retail presence. The Company increased marketing costs in new product areas, particularly internet video cameras and audio products. With the acquisition of Labtec at the end of fiscal year 2001, the Company incurred product marketing, product and packaging design and advertising costs relating to the audio products. As a percentage of sales, marketing and selling costs slightly decreased from 14.3% to 13.8%.

Research and Development

Research and development expenses increased 38% to $51 million. The increase was related to new product development, cost reduction efforts on existing products and increased costs associated with intellectual property used in our products. As a percentage of sales, research and development increased from 5.0% to 5.3%.

General and Administrative

General and administrative expense for the year ended March 31, 2002 increased 13% to $38 million. This increase was primarily due to increased headcount and personnel-related expenses. As a percentage of sales, general and administrative decreased from 4.6% to 4.0%.

Interest Expense, Net

Interest expense for the year ended March 31, 2002 was $2.0 million, compared to $.1 million in 2001. Interest expense increased due to the short-term borrowing and subsequent issuance of the five-year convertible bonds to finance the Labtec acquisition and repay Labtec obligations and credit lines. This debt was repaid in June 2001 using proceeds from the issuance of our convertible bonds.

Other Income (Expense), Net

Other expense was $1.6 million for the year ended March 31, 2002, compared to other income of $2.6 million in 2001. Other expense in fiscal year 2002 included the $1.2 million write-off of an investment and $2.5 million of losses recorded for investments accounted for under the equity method, partially offset by the $1.1 million gain on the sale of shares in Immersion Corporation and $.6 million of proceeds from a property loss insurance claim. Other income in fiscal year 2001 was primarily due to the gains of $1.9 million from the sale of a building and $1.3 million from the sale of an investment, partially offset by $.7 million of losses recorded as an investment accounted for under the equity method.

Provision for Income Taxes

The provision for income taxes for the year ended March 31, 2002 was $19 million, representing a 20% effective tax rate, compared to $12 million, representing a 21% effective tax rate in 2001. In 2001, the effective tax rate was impacted by certain non-deductible one time purchased in-process research and development expenses of $3.3 million related to the Labtec acquisition.

Liquidity and Capital Resources

Cash Balances, Available Borrowings, and Capital Resources

At March 31, 2003, net working capital was $325.7 million, compared to $265.7 million at March 31, 2002. Cash and cash equivalents totaled $218.7 million, an increase of $75.6 million from March 31, 2002. The increase in cash during fiscal 2003 was primarily due to profitable operations.

The Company has financed its operations and capital requirements primarily through cash flow from operations and, to a lesser extent, capital markets and bank borrowings. The Company’s normal short-term liquidity and long-term capital resource requirements will be provided from three sources: ongoing cash flow from operations, cash and cash equivalents on hand and borrowings, as needed, under the credit facilities.

The Company had credit lines with several European and Asian banks totaling $62.8 million as of March 31, 2003. As is common for business in European and Asian countries, these credit lines are uncommitted and unsecured. Despite the lack of formal commitments from its banks, the Company believes that these lines of credit will continue to be made available because of its long-standing relationships with these banks. As of March 31, 2003, $54 million was available under these facilities.

Acquisition of Labtec

In March 2001, the Company completed the acquisition of Labtec, Inc. for $73 million, with $47.6 million paid in cash and $25.4 million paid through the issuance of ADSs. In fiscal 2001, the Company borrowed $35 million under a $90 million term loan credit facility to finance part of the cash portion of the acquisition cost. During the first quarter of fiscal 2002, the Company borrowed the remaining term loan balance of $55 million to repay short-term Labtec borrowings of $19 million, long-term Labtec borrowings of $27 million and to pay other obligations relating to the acquisition. In June 2001, the Company sold 1% convertible bonds in a registered offering. Net proceeds of $93 million were used to repay the $90 million bridge loan.

Cash Flow from Operating Activities

The Company’s operating activities provided net cash of $145.1 million for the year compared to $112.6 million, and $12.0 million for the years ended March 31, 2002 and 2001. The increased cash flow was due to stronger collection efforts on higher sales during the year and increased focus on receivable collection efforts. The Company also invested cash in inventory because of a combination of factors including logistical difficulties in product distribution and preparing for higher levels of sales of our new products in future quarters. This increase in inventory was partially offset by our increase in accounts payable and accrued liabilities.

Depreciation expense decreased by $2.6 million compared to last year. One of the main components of our depreciation expense is depreciation from tooling, which can vary significantly from period to period. The variability occurs because tooling is depreciated over the shorter of the estimated life of the tool or one year, and is based on production levels. In fiscal year 2002, most new tools were placed in service late in the first quarter and early in the second quarter while in fiscal year 2003, fully depreciated tools were in use and most of the new tools were not placed in service until late in the second quarter. This resulted in tooling depreciation that was lower by $1.8 million for the year.

Cash Flow from Investing Activities

The Company’s investing activities used cash of $24.6 million for the year ended March 31, 2003, compared to $24.5 million and $59.1 million for the years ended March 31, 2002 and 2001. During the year ended March 31, 2003, the Company received net cash of $2.5 million as a result of the Spotlife acquisition in May 2002 and used $.4 million to acquire non-marketable securities. The Company recognized $.7 million proceeds from the sale of available-for-sale securities, and $1.3 million of net cash proceeds from the sale of a non-core business activity in December 2002.

During the year ended March 31, 2002, cash of $6.8 million was used for additional acquisition costs related to the purchase of Labtec and to acquire non-marketable equity investments. These expenditures were partially offset by cash proceeds of $4.2 million from the sale of available-for-sale securities.

Cash used in the year ended March 31, 2001 included $47.6 million, excluding $5.5 million cash acquired, for the acquisition of Labtec, $5 million for an additional investment in Spotlife, Inc., Logitech’s spin-off focused on enhancing video communications using the Internet infrastructure, and $.6 million for investment in other affiliated companies. In addition, 2001 includes cash proceeds of $3.6 million for the sale of a building in Europe that was no longer being used in the Company’s operations and $1.8 million from the sales of available-for-sales securities.

The amounts invested in all three years for capital expenditures include normal expenditures for computer hardware and software, tooling costs, capital improvements, and machinery and equipment.

Cash Flow from Financing Activities

The Company’s financing activities used net cash of $46.6 million for the year ended March 31, 2003. This was principally the result of treasury stock purchases, offset by the sale of shares upon the exercise of employee stock options and stock purchase rights. In June 2002, the Company repurchased 88,000 shares for $3.8 million in open market transactions under a short-term stock buyback program. In July 2002, the Company announced a program to buy back up to CHF 75 million (approximately $52 million based on exchange rates at the date of announcement) of Logitech shares in a twelve-month period. In March 2003, the Company completed its buy back program with the

repurchase of 1,509,000 shares for $52.4 million in open market transactions under this program. In February 2003, the Board of Directors authorized an additional repurchase plan for up to CHF 75 million (approximately $55 million based on exchange rates at the date of announcement) of the Company’s registered shares over the next twelve months. At March 31, 2003, the Company had repurchased 238,000 shares under the new plan for $7.6 million in open market transactions. During fiscal year 2003, the Company realized $15.6 million of proceeds from the sale of shares pursuant to employee stock purchase and stock option plans.

The Company’s financing activities provided cash of $13.2 million for the year ended March 31, 2002. In April 2001, the Company borrowed $55 million under a bridge loan, bringing the total bridge loan for the Labtec acquisition to $90 million. During the first quarter of fiscal 2002, the Company repaid short-term Labtec borrowings of $19 million and long-term Labtec borrowings of $27 million. In June 2001, the Company sold 1% convertible bonds denominated in Swiss francs in a registered offering in Switzerland. Net proceeds of $93 million were used to repay the $90 million bridge loan. The Company also realized $16.4 million of proceeds from the sale of registered shares and treasury shares to fulfill employee stock option and stock purchase plan requirements. In August through October 2001, under a previously announced registered share buyback program, the Company repurchased 628,704 Logitech shares for $15.0 million in open market transactions.

Net cash provided by financing activities for the year ended March 31, 2001 was $45.2 million. In March 2001, $35 million was borrowed from banks for the acquisition of Labtec. Also included in fiscal 2001 were $11.0 million of proceeds from the sale of registered shares and treasury shares to fulfill employee stock option and stock purchase plan requirements. This was partially offset by the repurchase of 39,000 registered shares for $1.1 million as part of a stock buy-back program in the first quarter of fiscal 2001.

Contractual Obligations and Commitments

The following summarizes Logitech’s contractual obligations at March 31, 2003, and the effect such obligations have on its liquidity and cash flow in future periods.

			Year ended March 31,
	Total		2004		2005-2006		2007-2008		After
	(in thousands)
Convertible bonds	$	127,722	$	—	$	—	$	127,722	$	—
Swiss mortgage loan		3,409		—		—		—		3,409
Lines of credit		8,856		8,856		—		—		—
Capital leases		1,730		1,246		484		—		—
Operating leases		17,977		5,675		8,841		1,562		1,899
Fixed purchase commitments-inventory		71,875		71,875		—		—		—
Fixed purchase commitments-capital		9,093		6,183		2,794		116		—
Acquisition		7,400		7,400		—		—		—

Total contractual obligations	$	248,062	$	101,235	$	12,119	$	129,400	$	5,308

The convertible bonds are convertible at any time into shares of Logitech registered shares at the conversion price of CHF 62.40 (US $46.05) per share. Early redemption is permitted at any time at the accreted redemption amount with the 5% redemption premium accreting ratably over five years. The bonds were denominated in Swiss francs and as a result of the strengthening of the Swiss franc against the U.S. dollar since the issuance of the bonds, the convertible bond liability has increased from $93 million to $127.7 million at March 31, 2003. Fixed purchase commitments relate primarily to purchase commitments for inventory and capital expenditures. The capital expenditure commitments are primarily for computer hardware and software, warehouse facilities and tooling. The inventory purchase commitments are made in the normal course of operations and are to original design manufacturers, contract manufacturers and other suppliers.

We have guaranteed the obligations of some of our contract manufacturers and original design manufacturers to certain component suppliers. These guarantees have a term of one year and are automatically extended for one or more additional years as long as a liability exists. The amount of the purchase obligations of these manufacturers varies over time, and therefore the amounts subject to our guarantees similarly varies. At March 31, 2003, the amount of these outstanding guaranteed purchase obligations was approximately $.9 million. Logitech does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee arrangements.

Logitech indemnifies some of its suppliers and customers for losses arising from matters such as intellectual property rights and safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees. No amounts have been accrued for indemnification provisions at March 31, 2003.

The Company believes that its cash and cash equivalents, cash from operations, and available borrowings under its bank lines of credit will be sufficient to fund capital expenditures and working capital needs for the foreseeable future.

Research and Development

For a discussion of our research and development activities, patents and licenses, please see Item 4.B “Business Overview.”

Trend Information

For a discussion of significant trends in our financial conditions and results of operations, please see Item 5. “Results of Operations” and “Liquidity and Capital Resources.”

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

Information concerning directors and senior management of Logitech appears on pages CG-3 to CG-7 in Exhibit 12.6 to the Form 20-F and is incorporated herein by reference.

Compensation of Executive Officers and Directors

Information concerning the compensation of executive officers and directors of Logitech appears on pages CG-7 to CG-9 in Exhibit 12.6 to the Form 20-F and is incorporated herein by reference.

Board Practices

Information concerning the Company’s board practices appears on pages CG-3 to CG-6 in Exhibit 12.6 to the Form 20-F and is incorporated herein by reference.

Employees

We employed the following numbers of employees:

Category	As of March 31,
	2003	2002	2001
Research and development	430	391	306
Manufacturing and distribution	3,617	3,189	3,741
Marketing, sales and support	485	437	375
Administration	404	387	372

Total	4,936	4,404	4,794

Of the total number of employees, as of March 31, 2003, 649 were in North America, 385 were in Europe and 3,902 were in Asia.

None of the Company’s U.S. employees are represented by a labor union or are subject to a collective bargaining agreement. Certain foreign countries, such as China, provide by law for employee rights, which include requirements similar to collective bargaining agreements. The Company believes that its employee relations are good.

Share and Option Ownership

Information concerning share and option ownership appears on page CG-8 in Exhibit 12.6 to the Form 20-F and is incorporated herein by reference.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

The following table sets forth certain beneficial ownership information at March 31, 2003 by each shareholder known by the Company to be the beneficial owner of more than five percent of the Company’s registered shares or ADSs. To the knowledge of the Company, it is not directly or indirectly owned or controlled by any corporation or by any foreign government. The voting rights of our shares held by major shareholders are the same as the voting rights of our shares held by all other shareholders. The Company is unaware of any arrangement, that might result in a change in its control.

Name of Beneficial Owner	Shares Beneficially Owned(1)	Percentage(2)
Daniel Borel(3)	3,277,698	6.8%
Fidelity Investments	2,757,005	5.8%

(1)

Beneficial ownership is determined in accordance with rules of the Securities and Exchange Commission that deem shares to be beneficially owned by any person who has or shares voting or investment power with respect to such shares. This information has been furnished by the beneficial owners. Unless otherwise indicated below, the persons named in the table have sole voting and sole investment power with respect to all shares shown as beneficially owned, subject to community property laws where applicable. Registered shares subject to options that are currently exercisable or exercisable within 60 days after March 31, 2003 are deemed to be issued and beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person but are not treated as issued for the purpose of computing the percentage ownership of any other person.

(2)

Percentage ownership is calculated based on 47,901,655 registered shares outstanding as of March 31, 2003.

(3)

Includes 125,400 registered shares registered in the name of Sylviane Borel (Mr. Borel’s wife). Mr. Borel disclaims beneficial ownership of the registered shares registered in the name of his wife.

Related Party Transactions

In fiscal 2000, the Company made an investment in a privately held technology company. Certain executive officers of the Company also purchased stock of the private issuer from the Company. At the time of these transactions, the Company loaned executive officers a total principal amount of $317,500 for the purchase of this stock at interest rates determined by reference to the applicable federal rate of interest. The maximum amount outstanding on these loans during fiscal year 2002 was $335,900, including interest. The executive officers repaid the loans in full in May 2002. Special bonuses totaling $303,200 were paid to certain of the executive officers, and used by them to repay these loans in full.

Interests of Experts and Counsel

Not applicable.

ITEM 8.

FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

Please see Item 18 “Financial Statements” and pages F-1 through F-23 of our Consolidated Financial Statements. In addition, for more information regarding our results of operations, please see Item 5 “Operating and Financial Review and Prospects.”

Legal Proceedings

From time to time, Logitech becomes involved in claims and legal proceedings that arise in the ordinary course of its business. We are currently subject to several such claims and legal proceedings. We believe that all of these pending lawsuits are without merit and intend to defend against them vigorously.

In July 1998, our U.S. subsidiary, Logitech Inc., was sued by Samuel Gart, an individual, in the U.S. District Court for the Central Division of California. This lawsuit alleged that Logitech infringed a patent for an ergonomically shaped computer mouse. This matter was settled in March 2003. The settlement did not have a material impact on our business, financial condition or operating results.

See discussion in Item 3.D Risk Factors— “Pending lawsuits could adversely impact us.”

Dividends

Under Swiss law, a corporation pays dividends upon a vote of its shareholders. This vote typically follows the recommendation of the corporation’s board of directors. Although we have paid dividends in the past, our board of directors announced in 1997 its intention not to recommend to shareholders any payment of cash dividends in the future in order to retain any future earnings for use in the operation and expansion of our business.

Significant Changes

None.

ITEM 9.

THE OFFER AND LISTING

On March 27, 1997, the Company consummated a public offering in the U.S. of 4,000,000 registered shares, represented by 4,000,000 ADSs. On April 25, 1997, the Company sold an additional 600,000 registered shares, represented by 600,000 ADSs, pursuant to an option granted to the underwriters in the offering to cover over-allotments. Each ADS represented one-tenth of one registered share.

In July 2000, Logitech completed a two-for-one stock split. The stock split did not alter the ADS to share ratio. In June 2001, the Company’s shareholders approved a ten-for-one stock split that was effective on August 2, 2001. The stock split related only to shares traded on the Swiss Exchange. As a result, the ratio of ten ADSs to one registered share changed to a new ratio of one ADS to one registered share. All references to share and per share data for all periods presented have been adjusted to give effect to both the two-for-one and the ten-for-one stock split.

On June 8, 2001, Logitech sold CHF 170,000,000 (US $95,625,000) aggregate principal amount of its 1% Convertible Bonds, which mature in 2006. The Company registered the convertible bonds for resale with the Swiss Stock Exchange. The convertible bonds were issued in denominations of CHF 5,000 at par value, with interest at 1.00% payable annually, and final redemption in June 2006 at 105%, representing a yield to maturity of 1.96%. The convertible bonds are convertible at any time into shares of Logitech registered shares at the conversion price of CHF 62.4 (US $46.05) per share. Early redemption is permitted at any time at the accreted redemption amount, subject to certain requirements.

Market Price Information

Registered Shares. The Company’s registered shares are listed and principally traded on the Swiss Exchange, where prices are expressed in Swiss francs. The table below presents, for the registered shares on the Swiss Exchange (i) the annual high and low market prices for the five most recent full financial years, (ii) the high and low market prices for each full financial quarter for the two most recent full years and any subsequent period, and (iii) the high and low market prices for each month for the most recent six months. For each of the periods indicated, the information presented is based on (i) the high and low closing sales prices quoted in Swiss francs for the registered shares on the Swiss Exchange, and (ii) the U.S. dollar equivalent based on the Noon Buying Rate on the last trading day of the month in which the high or low closing sales price occurred. The “Noon Buying Rate” is the rate in New York City for cable transfers in selected currencies as certified for customs purposes by the Federal Reserve Bank of New York.

	Price per Registered Share
	High	Low	High	Low
	CHF	CHF	$	$
Annual Highs and Lows
Fiscal 1999	12.00	5.58	8.05	4.17
Fiscal 2000	62.50	9.40	37.58	6.16
Fiscal 2001	62.40	33.20	37.25	20.49
Fiscal 2002	79.70	29.00	47.38	17.91
Fiscal 2003	83.25	31.50	52.60	20.98

Quarterly Highs and Lows
Fiscal 2002:
First quarter	57.60	37.10	32.06	21.53
Second quarter	58.00	29.00	33.62	17.91
Third quarter	63.50	29.80	37.82	18.02
Fourth quarter	79.70	58.50	47.38	34.36
Fiscal 2003:
First quarter	83.25	64.00	52.60	42.90
Second quarter	69.00	33.50	47.00	22.32
Third quarter	55.95	31.50	37.89	20.98
Fourth quarter	48.50	38.50	35.83	28.44

Monthly Highs and Lows
October 2002	47.00	31.50	31.30	20.98
November 2002	54.00	42.25	36.57	28.61
December 2002	55.95	41.00	40.10	29.38
January 2003	48.50	41.25	35.85	30.49
February 2003	46.20	41.25	33.93	30.29
March 2003	46.00	38.50	33.98	28.44

American Depositary Shares . The ADSs are traded on the Nasdaq National Market. The table below presents, for ADSs on the Nasdaq National Market (i) the annual high and low market prices for the five most recent full financial years, (ii) the high and low market prices for each full financial quarter for the two most recent full financial years and any subsequent period, and (iii) the high and low market prices for each month for the most recent six months.

	High		Low
Annual Highs and Lows
Fiscal 1999	$	7.88	$	4.25
Fiscal 2000	$	37.50	$	6.13
Fiscal 2001	$	38.25	$	18.75
Fiscal 2002	$	48.25	$	18.12
Fiscal 2003	$	53.25	$	21.85

Quarterly Highs and Lows
Fiscal 2002:
First quarter	$	32.25	$	21.38
Second quarter	$	32.37	$	18.12
Third quarter	$	39.19	$	19.40
Fourth quarter	$	48.25	$	35.00
Fiscal 2003:
First quarter	$	53.25	$	41.35
Second quarter	$	46.03	$	22.20
Third quarter	$	38.50	$	21.85
Fourth quarter	$	34.78	$	29.05

Monthly Highs and Lows
October 2002	$	32.00	$	21.85
November 2002	$	36.75	$	28.96
December 2002	$	38.50	$	29.33
January 2003	$	34.78	$	29.58
February 2003	$	33.95	$	30.65
March 2003	$	33.98	$	29.05

Plan of Distribution

Not applicable.

Markets on which our Shares Trade

Logitech Registered Shares and Convertible Bonds.

The principal trading market for our registered shares and our convertible bonds is the Swiss Exchange, on which our registered shares have been traded since 1988 under the symbol “LOGN”. As of March 31, 2003, there were 47,901,655 registered shares issued and outstanding (less 2,454,857 shares held as treasury stock) held by 6,814 holders of record.

Trading Practices and Procedures on the Swiss Exchange

The Swiss Exchange is a private organization comprised of 98 members as of March 31, 2003. There are approximately 255 Swiss companies and 135 foreign companies listed on the Swiss Exchange. Securities traded on the Swiss Exchange include Swiss and foreign bonds, equities, investment funds, rights and warrants.

The Swiss Exchange is an order-driven exchange system. Transactions on the Swiss Exchange are transmitted electronically via a high-speed computer processing center. Trading is divided into three separate phases: pre-opening, opening and continuous trading. During the pre-opening phase, the system is available for entries into the order book, inquiries and reporting off-exchange transactions, which are subject to additional regulations. During the opening phase, the system fixes the opening price for the particular security. During the continuous trading phase orders are matched. The Swiss Exchange interrupts, for limited periods, trading in a security that is subject to significant price fluctuation.

Logitech American Depositary Shares

The Logitech ADSs, each representing one registered share, have since March 27, 1997 been listed on the Nasdaq National Market under the symbol “LOGI”. The Bank of New York serves as depositary with respect to the Logitech ADSs traded on that market. As of March 31, 2003, according to the records of the Bank of New York, approximately 2,214,545 ADSs were outstanding in the United States. At that date, the number of individual ADS holders of record with the Bank of New York was approximately 4,165.

Selling Shareholder

Not applicable.

Dilution

Not applicable.

Expenses of the Issue

Not applicable.

ITEM 10.

ADDITIONAL INFORMATION

Share Capital

Not applicable.

Memorandum and Articles of Association

Set out below is certain information concerning the Company’s share capital and a brief summary of the material provisions of the Company’s articles of incorporation and the Swiss Code of Obligations, all as currently in effect. For a further discussion, we incorporate by reference the “Description of Logitech Shares” and the “Description of Logitech American Depositary Shares” included in our Registration Statement on Form F-4/A filed with the United States Securities Exchange Commission on March 13, 2001. The description is a summary, which does not purport to be complete, and is qualified in its entirety by reference to the articles of incorporation and Swiss law.

Purpose of the Company

Article 2 of the Company’s articles of incorporation establishes that the principal object of the Company is the coordination of the activity of its Swiss and foreign subsidiaries.

Directors

The Board of Directors may pass resolutions with respect to all matters that are not reserved to the general meeting of shareholders. Members of the Board of Directors must retire on their seventieth birthday, except if the Board of Directors adopts a resolution to the contrary. The retirement is effective on the date of the next general meeting of shareholders.

Disclosure of Principal Shareholders

Under the applicable provisions of the Swiss Stock Exchange Act, shareholders (and groups of shareholders acting in concert) who own shares or other securities representing more than 5 percent, 10 percent, 20 percent, 33 1/3 percent, 50 percent or 66 2/3 percent of the voting rights of a company incorporated in Switzerland of which at least one class of its equity securities is listed on the Swiss Exchange are required to notify the company and the Swiss Exchange of such holdings, whether or not the voting rights can be exercised. Following receipt of such notification, the company is required to inform the public. The same disclosure obligation applies to subsequent reductions in the holding of voting rights below the thresholds described above.

Material Contracts

In June 2001, we completed a CHF 170 million bond offering (approximately U.S. $96 million). The bonds have a coupon rate of 1% per annum and an initial conversion price of CHF 62.4 (approximately US $46.05). The redemption price at maturity in the event of non-conversion is 105% of the issue price.

There are no other material contracts entered into other than in the ordinary course of business.

Exchange Controls

As a Swiss corporation, Logitech is subject to requirements not generally applicable to United States corporations. Among other things, Logitech’s issuances of capital stock generally must be submitted for approval at a general meeting of shareholders. In addition, under Swiss law the issuance of capital stock is generally subject to shareholder preemptive rights, except to the extent that these preemptive rights have been excluded or limited by the shareholders.

In addition, U.S. securities laws may restrict the ability of U.S. ADS holders to participate in Logitech rights offerings, share dividends or warrant dividends in the event that Logitech is unable or chooses not to register these securities under U.S. securities laws and cannot rely on an exemption from registration. Logitech is not currently planning any rights offering or to issue any share or warrant dividends, or any similar transaction. Logitech may choose to do so in the future and there can be no assurance that it will be feasible to include U.S. persons in the transaction. If Logitech does issue these type of securities in the future, it may issue them to the Depositary, which may sell the securities for the benefit of the holders of Logitech ADSs. There can be no assurance as to the value, if any, the Depositary would receive upon the sale of these securities.

There are no legislative or other legal provisions currently in effect in Switzerland or arising under Logitech’s articles of incorporation restricting the export or import of capital, or that affect the remittance of dividends, interest or other payments to nonresident holders of Logitech securities. Cash dividends payable in Swiss francs on shares and ADSs may be officially transferred from Switzerland and converted into any other convertible currency. There are no limitations imposed by Swiss laws or Logitech’s articles on the right of non-Swiss residents to hold or vote the shares or ADSs.

Taxation

The following is a summary of certain Swiss tax matters that may be relevant with respect to the acquisition, ownership and disposition of registered shares or ADSs (which are evidenced by ADSs).

This summary addresses laws in Switzerland currently in effect, as well as the 1997 Convention (entered into force on December 1997) between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income (the “Treaty”), both of which are subject to change (or changes in interpretation), possibly with retroactive effect.

For purposes of the Treaty and the Internal Revenue Code of 1986, as amended (the “Code”), United States Holders of ADSs are treated as the owners of the registered shares corresponding to such ADSs. Accordingly, the Swiss tax consequences discussed below also generally apply to United States holders of registered shares.

Swiss Taxation

Gain on Sale

Under current Swiss law, a holder of registered shares or ADSs who (i) is a non-resident of Switzerland, (ii) during the taxable year has not engaged in a trade or business through a permanent establishment within Switzerland and (iii) is not subject to taxation by Switzerland for any other reason, will be exempted from any Swiss federal, cantonal or municipal income or other tax on gains realized during the year on the sale of registered shares or ADSs.

Stamp, Issue and Other Taxes

Switzerland generally does not impose stamp, registration or similar taxes on the sale of registered shares or ADSs by a holder thereof unless such sale or transfer occurs through or with a Swiss securities dealer (as defined in the Swiss Stamp Duty Law).

Withholding Tax

Under present Swiss law, any dividends paid in respect of registered shares will be subject to the Swiss Anticipatory Tax at the rate of 35%, and the Company will be required to withhold tax at such rate from any dividend payments made to a holder of registered shares. Such dividend payments may qualify for reduction of or refund of the Swiss Anticipatory Tax by reason of the provisions of a double tax treaty between Switzerland and the country of residence or incorporation of a holder, and in such cases such holder will be entitled to claim a refund of all or a portion of such tax in accordance with such treaty. The Treaty provides for a mechanism whereby a United States resident or United States corporations can generally seek a refund of the Swiss Anticipatory Tax paid on dividends in respect of registered shares, to the extent such withholding exceeds 15%. A United States corporation that holds more than 10% of the share capital of a Swiss company can seek a refund of the Swiss Anticipatory Tax paid on dividends to the extent such withholding tax exceeds 5% under the double tax treaty.

Dividends and Paying Agents

Not applicable.

Statement by Experts

Not applicable.

Documents on Display

Whenever a reference is made in this Form 20-F to any contract, agreement or other document, the reference may not be complete and you should refer to the copy of that contract, agreement or other document filed as an exhibit to one of our previous SEC filings. We file annual and special reports and other information with the SEC. You may read and copy all or any portion of this Form 20-F and any other document we file with the SEC at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. Such material may also be obtained at the internet site the SEC maintains at www.sec.gov.

Subsidiary Information

Not applicable.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market Risk

Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments. As a global concern, the Company faces exposure to adverse movements in foreign currency exchange rates and interest rates. These exposures may change over time as business practices evolve and could have a material adverse impact on our financial results.

Foreign Currency Exchange Rates

Currently, the Company’s primary exposures relate to non-U.S. dollar denominated sales in Europe and Asia and non-U.S. dollar denominated operating expenses, inventory costs and long term debt in Europe and Asia. The principal currencies creating foreign exchange rate risk for Logitech are the Euro, Taiwan Dollar, Swiss Franc and Japanese Yen.

For the year ended March 31, 2003, approximately 49% of the Company’s sales were denominated in non-U.S. currencies. With the exception of our subsidiaries in China, which use the U.S. dollar as their functional currency, we primarily use the local currencies of our foreign subsidiaries as the functional currency. Accordingly, unrealized foreign currency gains or losses resulting from the translation of net assets denominated in foreign currencies to the U.S. dollar are accumulated in the cumulative translation adjustment component of other comprehensive income in shareholders’ equity.

The table below provides information about our underlying transactions that are sensitive to foreign exchange rate changes, primarily nonfunctional currency-denominated assets and liabilities. The table below represents the U.S. dollar impact on our earnings of a 10% appreciation and a 10% depreciation of the functional currency as compared to the transaction currency.

Functional Currency	Transaction Currency	Net Exposed Long (Short) Currency Position			FX Gain (Loss) From 10% Appreciation of Functional Currency			FX Gain (Loss) From 10% Depreciation of Functional Currency
(in thousands)
U.S. dollar	Swiss Franc	$	544		$	(49	)	$	60
U.S. dollar	Japanese Yen		2,623			(238	)		291
U.S. dollar	Euro		1,243			(113	)		138
U.S. dollar	British pound sterling		7,295			(663	)		811
U.S. dollar	Taiwan dollar		12,193			(1,108	)		1,355
U.S. dollar	Singapore dollar		4,706			(428	)		523
Euro	British pound sterling		8,150			(741	)		906
Euro	Swiss Franc		3,292			(299	)		366
Euro	Swedish Kroner		2,165			(197	)		241
Taiwan dollar	Singapore dollar		(1,832	)		167			(204	)
U.S. dollar	Chinese Yen		1,885			(171	)		209

		$	42,264		$	(3,842	)	$	4,696

Long currency positions represent net assets being held in the transaction currency while short currency positions represent net liabilities being held in the transaction currency.

On June 8, 2001 the Company sold CHF 170 million (US $95.6 million) Swiss Franc denominated 1% Convertible Bonds which mature in 2006. Although the Company is exposed to foreign exchange risks on this long-term obligation, the Swiss Franc liability serves to partially offset the effect of exchange rate fluctuations on assets held in European currencies. Unrealized gains or losses resulting from translation of the bonds to the U.S. dollar are accumulated in the cumulative translation adjustment component of other comprehensive loss in shareholders’ equity. At March 31, 2003, the carrying amount of the convertible bonds was US $127.7 million, which reflects appreciation of the Swiss Franc against the U.S. dollar since June 8, 2001 with an impact on the carrying amount of $24.5 million and the accretion of the redemption premium over the life of the debt. If the U.S. dollar strengthened by 10% in comparison to the Swiss Franc, the increase in the cumulative translation adjustment component of shareholders’ equity would be $11.4 million. If the U.S. dollar weakened by 10% in comparison to the Swiss Franc, a decrease of approximately $13.9 million would occur in the cumulative translation adjustment component of shareholders’ equity.

From time to time, certain subsidiaries enter into forward exchange contracts to hedge inventory purchase exposures denominated in U.S. dollars. The amount of the forward exchange contracts is based on forecasts of inventory purchases. These forward exchange contracts are denominated in the same currency as the underlying transactions. Logitech does not use derivative financial instruments for trading or speculative purposes. At March 31, 2003, the notional amount of forward foreign exchange contracts outstanding was $13.0 million. These forward contracts generally mature within three months. At March 31, 2003, there was no unrealized gain or loss on the fair value of the outstanding foreign exchange hedging contracts. If the U.S. dollar had depreciated by 10% as compared to the hedged foreign currency, an approximate $1.5 million unrealized loss in our forward foreign exchange contract portfolio would have occurred. If the U.S. dollar had appreciated by 10% as compared to the hedged foreign currency, an unrealized gain of approximately $1.2 million in our forward foreign exchange contract portfolio would have occurred.

Interest Rates

The interest rate on the Company’s long-term debt is fixed. A change in interest rates, therefore, has no impact on interest expense or cash flows.

Changes in interest rates could impact the Company’s anticipated interest income on its cash equivalents and interest expense on variable rate short-term debt. The Company prepared sensitivity analyses of its interest rate exposures to assess the impact of hypothetical changes in interest rates. Based on the results of these analyses, a 100 basis point decrease or increase in interest rates from the fiscal 2003 and 2002 year end rates would not have a material effect on the Company’s results of operations or cash flows.

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

Part II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

On July 5, 2000, a two-for-one stock split became effective resulting in one additional ADS being issued to ADS holders for each ADS held by ADS holders of record. Each ADS represents one-tenth of a registered share.

In August 2001, the Company completed a ten-for-one stock split for shares traded on the Swiss Exchange. ADSs traded on NASDAQ were not affected. As a result, the ratio of ten ADSs to one registered share changed to a new ratio of one ADS to one registered share.

ITEM 15.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Within the 90-day period prior to the date of this Form 20-F, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our filings and submissions under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Logitech’s management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. Because of inherent limitations in any systems of disclosure controls and procedures, no evaluation of controls can provide absolute assurance that all instances of error or fraud, if any, within the Company may be detected.

Changes in Internal Controls

There were no significant changes in the Company’s internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation. There were no significant deficiencies or material weaknesses, and therefore there were no corrective actions taken.

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

The Committee consists of four non-employee directors who meet the independence requirements of the Nasdaq National Market listing standards and the rules and regulations of U.S. Securities and Exchange Commission. The Board affirmatively determined at its April 2003 meeting that Mr. Gill and Mr. Bengier are audit committee financial experts. See also the information in Exhibit 12.6 under the caption “Audit Committee”.

ITEM 16B.

CODE OF ETHICS

The Company’s code of ethics policy entitled, “Business Ethics and Conflict of Interest Policy of Logitech International S.A.”, is attached as Exhibit 11.1 to our Form 20-F. Our code of ethics policy covers the Chief Executive Officer, the Chief Financial Officer, and the Chief Accounting Officer as well as all employees.

The code of ethics addresses, among other things, the following items:

•

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

•

Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Commission and in other public communications made by us;

•

Compliance with applicable governmental laws, rules and regulations;

•

The prompt internal reporting to an appropriate person or persons identified in the code of violations of any of the provisions described above; and

•

Accountability for adherence to the code.

Any amendments or waivers of the code of ethics for the Chief Executive Officer, the Chief Financial Officer, or the Chief Accounting Officer for the provisions listed above will be disclosed in the investor relations section of our website— www.logitech.com within five business days following the date of the amendment or waiver. During fiscal year 2003, no waivers or amendments were made to the code of ethics for the Chief Executive Officer, the Chief Financial Officer, or the Chief Accounting Officer.

Our code of ethics is available on our website, and for no charge, a copy of the Company’s code of ethics can be requested via the following address or phone number:

Logitech Inc. Investor Relations

Corporate Headquarters:

6505 Kaiser Drive

Fremont, CA 94555 USA

+1 510-795-8500 Main

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information concerning Independent Accountant Services appears on page CG-10 in Exhibit 12.6 to the Form 20-F and is incorporated herein by reference.

Part III

ITEM 17.

FINANCIAL STATEMENTS

The Company has responded to Item 18.

ITEM 18.

FINANCIAL STATEMENTS

Reference is made to pages F-1 through F-23 and is incorporated herein by reference.

ITEM 19.

EXHIBITS

Financial Statements

Report of the Group Auditors to the general meeting of Logitech International S.A. Apples, Switzerland

Consolidated balance sheets at March 31, 2003 and 2002

Consolidated statements of income for the years ended March 31, 2003, 2002 and 2001

Consolidated statements of cash flows for the years ended March 31, 2003, 2002 and 2001

Consolidated statements of changes in shareholders’ equity for the years ended March 31, 2003, 2002 and 2001

Notes to consolidated financial statements

Unaudited Quarterly Financial Data

Schedule II—Valuation and qualifying accounts

Exhibits

Exhibit Number		Description of Document

1.1		Articles of Incorporation of Logitech International S.A. as amended.

1.2		Organizational Regulations of Logitech International S.A. (incorporated herein by reference to Exhibit 3.2 to Logitech International S.A.’s Registration Statement on Form F-4 filed on February 23, 2001).

2.1		Form of Deposit Agreement dated March 27, 1997, as amended July 5, 2000 and as further amended on August 2, 2001, among Logitech International S.A., the Bank of New York, as Depositary, and owners and beneficial owners of American Depositary Receipts including as an exhibit the form of American Depositary Receipt (incorporated herein by reference to Exhibit 4.1 to Logitech International S.A.’s Registration Statement on Form S-8 filed on October 30, 2002)


2.2		1996 Stock Plan, as amended (incorporated herein by reference to Exhibit 4.2 to Logitech International S.A.’s Registration Statement on Form S-8 filed on October 30, 2002)

2.3		1996 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 4.3 to Logitech International S.A.’s Registration Statement on Form S-8 filed on October 30, 2002)

4.1		Form of Director and Officer Indemnification Agreement with Logitech International S.A.

4.2		Form of Director and Officer Indemnification Agreement with Logitech Inc.

4.3		Credit Agreement dated March 2001, by and between Logitech International S.A. and Credit Suisse (incorporated herein by reference to exhibit 10.2 to Logitech International S.A.’s Report on form F-4/A filed on March 13, 2001).

8.1		List of Subsidiaries of Logitech International S.A.

11.1		Business Ethics and Conflict of Interest Policy of Logitech International S.A., dated May 16, 2003.

12.1		Consent of PricewaterhouseCoopers SA, Independent Accountants.

12.2		Bond Purchase, Paying and Conversion Agency Agreement, dated as of June, 1, 2001 by and among Logitech (Jersey) Limited, Logitech International S.A., Credit Suisse First Boston and Banque Cantonale Vaudoise (incorporated herein by reference to exhibit included in the Registrant’s Report on Form 6-K filed on August 14, 2001.)

12.3		Deposit Agreement, dated as of June 1, 2001 by and among Logitech (Jersey) Limited, Logitech International S.A. and Credit Suisse (incorporated herein by reference to exhibit included in the Registrant’s Report on Form 6-K filed on August 14, 2001.)

12.4		Guarantee, dated as of June 8, 2001 by Logitech International S.A. (incorporated herein by reference to exhibit included in the Registrant’s Report on Form 6-K filed on August 14, 2001.)

12.5		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

12.6		Our Corporate Governance

SIGNATURES

The registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this annual report to be signed on its behalf.

Logitech International S.A.

By: /s/ Guerrino De Luca
Guerrino De Luca
President and Chief Executive Officer

By: /s/ Kristen M. Onken
Kristen M. Onken
Chief Financial Officer,
Chief Accounting Officer,
and U.S. Representative

May 21, 2003

CERTIFICATIONS

I, Kristen M. Onken, certify that:

I have reviewed this annual report on Form 20-F of Logitech International S.A.;

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


By: /s/ Kristen M. Onken
Senior Vice President Finance
Chief Financial Officer
May 21, 2003

CERTIFICATIONS

I, Guerrino De Luca, certify that:

I have reviewed this annual report on Form 20-F of Logitech International S.A.;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


By: /s/ Guerrino De Luca
Chief Executive Officer
May 21, 2003

LOGITECH INTERNATIONAL S.A.

INDEX TO FINANCIAL STATEMENTS

		Page
Report of the Group Auditors to the General Meeting of Logitech International S.A. Apples, Switzerland		F-2
Consolidated balance sheets at March 31, 2003 and 2002		F-3
Consolidated statements of income for the years ended March 31, 2003, 2002 and 2001		F-4
Consolidated statements of cash flows for the years ended March 31, 2003, 2002 and 2001		F-5
Consolidated statements of changes in shareholders’ equity for the years ended March 31, 2003, 2002 and 2001		F-6
Notes to consolidated financial statements		F-7
Unaudited Quarterly Financial Data		F-24

F-1

REPORT OF THE GROUP AUDITORS TO THE GENERAL MEETING OF

LOGITECH INTERNATIONAL S.A. APPLES, SWITZERLAND

As group auditors, we have audited the consolidated financial statements of Logitech International S.A. and its subsidiaries , consisting of the consolidated balance sheets at March 31, 2003 and 2002, the consolidated statements of income, of cash flows and of changes in shareholders’ equity for the years ended March 31, 2003, 2002 and 2001, and the notes to the consolidated financial statements.

These consolidated financial statements are the responsibility of the Board of Directors of Logitech International S.A. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We confirm that we meet the Swiss legal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated by the profession in Switzerland and those generally accepted in the United States of America, 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 present fairly, in all material respects, the financial position of Logitech International S.A. and its subsidiaries at March 31, 2003 and 2002 and the results of operations, cash flows and changes in shareholders’ equity for the years ended March 31, 2003, 2002 and 2001 in accordance with accounting principles generally accepted in the United States of America and comply with Swiss law.

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

PricewaterhouseCoopers SA

/s/ M. Foley

M. Foley

/s/ M. Perry

M. Perry

Lausanne, Switzerland

April 22, 2003

F-2

LOGITECH INTERNATIONAL S.A.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	March 31,
	2003			2002
ASSETS
Current assets:
Cash and cash equivalents	$	218,734		$	143,101
Accounts receivable		181,644			171,103
Inventories		124,123			85,124
Other current assets		38,762			33,486

Total current assets		563,263			432,814

Investments		1,458			8,713
Property, plant and equipment		38,914			32,086
Intangible assets:
Goodwill		108,615			102,017
Other intangible assets		17,523			15,358
Other assets		8,529			4,756

Total assets	$	738,302		$	595,744


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Short-term debt	$	10,102		$	5,527
Accounts payable		129,326			88,268
Accrued liabilities		98,134			73,309

Total current liabilities		237,562			167,104
Long-term debt		131,615			104,812
Other liabilities		3,563			811

Total liabilities		372,740			272,727

Commitments and Contingencies
Shareholders’ equity:
Registered shares, par value CHF 1—57,901,655 authorized, 17,890,465 conditionally authorized, 47,901,655 issued and outstanding at March 31, 2003; 53,934,535 authorized, 11,890,465 conditionally authorized, 47,901,655 issued and outstanding at March 31, 2002		33,370			33,370
Additional paid-in capital		150,849			134,312
Less registered shares in treasury, at cost, 2,454,857 at March 31, 2003 and 2,083,003 at March 31, 2002		(76,891	)		(15,819	)
Retained earnings		303,234			204,391
Accumulated other comprehensive loss		(45,000	)		(33,237	)

Total shareholders’ equity		365,562			323,017

Total liabilities and shareholders’ equity	$	738,302		$	595,744

The accompanying notes are an integral part of these consolidated financial statements.

F-3

LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts)

	Year ended March 31,
	2003			2002			2001
Net sales	$	1,100,288		$	943,546		$	735,549
Cost of goods sold		735,784			627,998			502,290

Gross profit		364,504			315,548			233,259
Operating expenses:
Marketing and selling		141,194			130,060			105,140
Research and development		56,195			50,531			36,686
General and administrative		43,233			37,739			33,484
Purchased in-process research and development		—			—			3,275

Total operating expenses		240,622			218,330			178,585

Operating income		123,882			97,218			54,674
Interest expense, net		(1,196	)		(1,956	)		(148	)
Other income (expense), net		866			(1,567	)		2,628

Income before income taxes		123,552			93,695			57,154
Provision for income taxes		24,709			18,739			12,086

Net income	$	98,843		$	74,956		$	45,068


Net income per share and ADS:
Basic	$	2.15		$	1.67		$	1.07
Diluted	$	1.97		$	1.50		$	.96

Shares used to compute net income per share and ADS:
Basic		45,988,766			44,928,853			42,226,240
Diluted		51,409,464			50,939,060			46,940,170

The accompanying notes are an integral part of these consolidated financial statements.

F-4

LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year ended March 31,
	2003			2002			2001
Cash flows from operating activities:
Net income	$	98,843		$	74,956		$	45,068
Non-cash items included in net income:
Depreciation		25,522			28,092			19,012
Amortization of goodwill		—			—			998
Amortization of other intangible assets		5,047			3,678			2,030
Purchased in-process research and development		—			—			3,275
Write-off of investments		1,512			1,220			50
Gain on sale of investments		163			(1,115	)		(1,296	)
Equity in net losses of affiliated companies		—			2,469			440
Gain on disposal of property, plant and equipment		—			—			(1,922	)
Deferred income taxes and other		(387	)		(376	)		1,030
Changes in current assets and liabilities, net of acquisitions:
Accounts receivable		2,565			(28,937	)		(6,630	)
Inventories		(32,714	)		26,040			(29,411	)
Other current assets		(4,356	)		(3,139	)		(5,643	)
Accounts payable		27,807			(878	)		(18,009	)
Accrued liabilities		21,106			10,585			3,051

Net cash provided by operating activities		145,108			112,595			12,043

Cash flows from investing activities:
Purchases of property, plant and equipment		(28,657	)		(21,941	)		(16,824	)
Sales of property, plant and equipment		—			—			3,637
Acquisitions and investments, net of cash acquired		1,985			(6,822	)		(47,696	)
Sales of investments		2,072			4,249			1,767

Net cash used in investing activities		(24,600	)		(24,514	)		(59,116	)

Cash flows from financing activities:
Net borrowing (repayment) of short-term debt		2,822			(53,994	)		35,000
Borrowing of long-term debt, net of issuance costs		—			93,292			211
Repayment of long-term debt		(1,185	)		(27,450	)		—
Purchase of treasury shares		(63,822	)		(15,043	)		(1,065	)
Proceeds from sale of shares upon exercise of options and rights		15,629			16,389			11,049

Net cash provided by (used in) financing activities		(46,556	)		13,194			45,195

Effect of exchange rate changes on cash and cash equivalents		1,681			(2,316	)		(3,406	)

Net increase (decrease) in cash and cash equivalents		75,633			98,959			(5,284	)
Cash and cash equivalents at beginning of period		143,101			44,142			49,426

Cash and cash equivalents at end of period	$	218,734		$	143,101		$	44,142

Supplemental cash flow information:
Interest paid	$	1,336		$	1,709		$	158
Income taxes paid	$	5,343		$	3,409		$	863
Non-cash investing and financing activities:
Property acquired through capital lease financing	$	—		$	—		$	900
Acquisition of Labtec through issuance of shares	$	—		$	875		$	25,436
Note payable issued to acquire 3Dconnexion minority interest	$	7,400		$	—		$	—
Assumption of Spotlife capital lease	$	2,682		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-5

LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except share amounts)

	Registered shares			Additional paid-in capital		Treasury shares					Retained earnings		Accumulated other comprehensive loss			Total
	Shares	Amount		Additional paid-in capital		Shares		Amount			Retained earnings		Accumulated other comprehensive loss			Total
March 31, 2000	41,629,200	$	29,752	$	83,686	206,400		$	(1,056	)	$	84,367	$	(16,780	)	$	179,969
Net income	—		—		—	—			—			45,068		—			45,068
Cumulative translation adjustment	—		—		—	—			—			—		(7,075	)		(7,075	)
Unrealized gain net of income taxes	—		—		—	—			—			—		965			965

Total comprehensive income	—		—		—	—			—			—		—			38,958

Issuance of registered shares for acquisition of Labtec	1,143,000		678		24,758	—			—			—		—			25,436
Issuance of registered shares at par value	99,120		59		—	99,120			(59	)		—		—			—
Purchase of treasury shares	—		—		—	39,000			(1,065	)		—		—			(1,065	)
Sale of shares upon exercise of options and purchase rights	1,547,290		907		8,589	(179,770	)		1,553			—		—			11,049
Tax benefit from exercise of stock options	—		—		1,707	—			—			—		—			1,707

March 31, 2001	44,418,610	$	31,396	$	118,740	164,750		$	(627	)	$	129,435	$	(22,890	)	$	256,054

Net income	—		—		—	—			—			74,956		—			74,956
Cumulative translation adjustment	—		—		—	—			—			—		(9,230	)		(9,230	)
Unrealized loss net of income taxes	—		—		—	—			—			—		(1,293	)		(1,293	)
Deferred realized hedging gains	—		—		—	—			—			—		176			176

Total comprehensive income	—		—		—	—			—			—		—			64,609

Issuance of registered shares at par value	2,725,000		1,533		—	2,725,000			(1,533	)				—			—
Purchase of treasury shares	—		—		—	628,704			(15,043	)		—		—			(15,043	)
Sale of shares upon exercise of options and purchase rights	758,045		441		14,720	(1,396,117	)		1,361			—		—			16,522
Acquisition of additional Labtec shares	—		—		852	(39,334	)		23			—		—			875

March 31, 2002	47,901,655	$	33,370	$	134,312	2,083,003		$	(15,819	)	$	204,391	$	(33,237	)	$	323,017

Net income	—		—		—	—			—			98,843		—			98,843
Cumulative translation adjustment	—		—		—	—			—			—		(11,312	)		(11,312	)
Unrealized gain net of income taxes	—		—		—	—			—			—		328			328
Deferred realized hedging losses	—		—		—	—			—			—		(779	)		(779	)

Total comprehensive income	—		—		—	—			—			—		—			87,080

Tax benefit from exercise of stock options	—		—		3,658	—			—			—		—			3,658
Purchase of treasury shares	—		—		—	1,835,707			(63,822	)		—		—			(63,822	)
Sale of shares upon exercise of options and purchase rights	—		—		12,879	(1,463,853	)		2,750			—		—			15,629

March 31, 2003	47,901,655	$	33,370	$	150,849	2,454,857		$	(76,891	)	$	303,234	$	(45,000	)	$	365,562

The accompanying notes are an integral part of these consolidated financial statements.

F-6

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—The Company:

Logitech International S.A. designs, manufactures and markets personal interface products and supporting software that serve as the primary physical interface between people and their personal computers and other digital platforms. The Company’s products include corded and cordless mice, trackballs, and keyboards; joysticks, gamepads and racing systems; internet video cameras; PC speakers, headsets and microphones; and 3D controllers. The Company sells its products to both original equipment manufacturers (“OEMs”) and to a network of retail distributors and resellers.

Logitech was founded in Switzerland in 1981, and in 1988 listed its registered shares in an initial public offering in Switzerland. In 1997, the Company sold shares in a U.S. initial public offering in the form of American Depositary Shares (“ADSs”) and listed the ADSs on the Nasdaq National Market system. The Company’s corporate headquarters are in Fremont, California through its U.S. subsidiary, with regional headquarters in Romanel, Switzerland, Hsinchu, Taiwan, and Hong Kong, China through local subsidiaries. The Company has its principal manufacturing operations in China, and distribution facilities in the U.S., Europe and Asia.

Note 2—Summary of Significant Accounting Policies:

Basis of Presentation

The consolidated financial statements include the accounts of Logitech and its subsidiaries. All material intercompany balances and transactions have been eliminated. The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and comply with Swiss law.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to use estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. Actual results could differ from those estimates.

Revenue Recognition

Revenues are recognized when all of the following criteria are met:

•

evidence of an arrangement exists between the Company and the customer;

•

title and risk of loss transfers to the customer;

•

the price of the product is fixed or determinable; and

•

collectibility of the receivable is reasonably assured.

Revenues from sales to distributors and authorized resellers are subject to terms allowing price protection, certain rights of return and allowances for customer marketing programs. Accordingly, allowances for estimated future returns, price protection and customer marketing programs are provided for upon revenue recognition. Such amounts are estimated, and periodically adjusted, based on historical and anticipated rates of returns, distributor inventory levels and other factors and recorded as a reduction of revenue.

Advertising

Advertising costs are expensed as incurred and amounted to $76.9 million in 2003, $71.6 million in 2002 and $53.9 million in 2001. Advertising costs are recorded as either a sales and marketing expense or a deduction from sales. Advertising costs reimbursed by the Company to a vendor must have an identifiable benefit and an estimable fair value in order to be classified as an operating expense. If these criteria are not met, the cost is classified as a deduction from revenue.

F-7

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency

The functional currencies of the Company’s operations are primarily the U.S. dollar, and to a lesser extent, the Euro, Swiss franc, Taiwanese dollar, and Japanese yen. The financial statements of the Company’s subsidiarieswhose functional currency is other than the U.S. dollar are translated to U.S. dollars using period-end rates of exchange for assets and liabilities and using monthly rates for net sales and expenses. Translation gains and losses are deferred and included in the cumulative translation adjustment component of shareholders’ equity. Gains and losses arising from transactions denominated in currencies other than a subsidiary’s functional currency are reflected in other income (expense), net in the statements of income.

Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with various financial institutions to limit exposure with any one financial institution.

The Company sells to large OEMs, distributors and high volume resellers and, as a result, maintains individually significant receivable balances with large customers. At March 31, 2003, one customer represented 18% of total accounts receivable and at March 31, 2002, one customer represented 10% of total accounts receivable. The Company’s OEM customers tend to be well-capitalized, multi-national companies, while retail customers may be less well capitalized. The Company controls its accounts receivable credit risk through ongoing credit evaluation of its customers’ financial condition and by purchasing credit insurance on European retail accounts receivable. The Company generally does not require collateral from its customers.

Accounts Receivable

Accounts receivable are stated net of doubtful accounts. The Company estimates the uncollectability of the accounts receivable balance and maintains allowances for estimated losses. Management analyzes accounts receivable, historical bad debts, receivable aging, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.

Inventories

Inventories are stated at the lower of cost or market. Cost is computed on a first-in, first-out basis. Provisions are made for estimated excess and obsolete inventory as well as declines in marketability based upon technology trends, our plans for the products and assumptions about future demand and market conditions.

Investments

Investments in companies in which Logitech owns between 20% and 50%, and does not control, are accounted for using the equity method. Under the equity method, the Company adjusts its carrying value to recognize its share of results of operations. Investments less than 20% owned are carried at cost less any decrease in value deemed to be other than temporary in nature. At March 31, 2002, the Company owned an investment in a marketable equity security that was classified as “available-for-sale”. The Company carried this investment at market value and recorded increases or decreases in market value as a component of shareholders’ equity.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Additions and improvements are capitalized, whereas maintenance and repairs are expensed as incurred. The Company capitalizes the cost of software developed for internal use in connection with major projects. Costs incurred during the feasibility stage are expensed, whereas costs incurred during the application development stage are capitalized. Depreciation is provided using the straight-line method over estimated useful lives of five to 25 years for plant and buildings, one to five years for equipment and

F-8

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

three to five years for software development. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in the determination of income.

Intangible Assets

The Company’s intangible assets principally include goodwill, acquired technology and trademarks. Intangible assets with finite lives, which include acquired technology and trademarks, are recorded at cost and amortized on the straight-line method over their respective useful lives. Intangible assets with indefinite lives, which include goodwill, are recorded at cost and evaluated at least annually for impairment.

Impairment of Long-Lived Assets

The Company reviews for impairment of long-lived assets, such as investments, property and equipment, and intangible assets, whenever events indicate that the carrying amount might not be recoverable. Management assesses recoverability by comparing the projected undiscounted net cash flows associated with those assets to their carrying values. If impaired, the asset is written down to fair value, which is determined based on discounted cash flows or appraised value, depending on the nature of the asset. Goodwill is evaluated for impairment at least annually on an enterprise value basis.

Income Taxes

The Company provides for income taxes using the liability method, which requires that deferred tax assets and liabilities be recognized for the expected future tax consequences of temporary differences arising between the bases of assets and liabilities for financial reporting and income tax purposes. In estimating future tax consequences, expected future events are taken into consideration, with the exception of potential tax law or tax rate changes.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents and accounts receivable, accounts payable and accrued liabilities, short-term debt and current maturities of long-term debt, carrying value approximates fair value due to their short maturities. The estimated fair value of publicly traded financial equity instruments are determined by using quoted market prices.

Net Income Per Share and ADS

Basic earnings per share are computed by dividing net income by the weighted average number of outstanding registered shares. Diluted earnings per share are computed using weighted average registered shares and, if dilutive, weighted average registered share equivalents. The registered share equivalents are registered shares issuable upon the exercise of stock options and stock purchase plan agreements (using the treasury stock method), and upon the conversion of convertible debt (using the if-converted method). For the year ended March 31, 2003 and 2002, the conversion of convertible debt was included in the registered share equivalents due to its dilutive effect.

F-9

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The computations of the basic and diluted per share amounts for the Company were as follows:

	Year ended March 31,
	2003		2002		2001
	(In thousands)
Net income:
Basic	$	98,843	$	74,956	$	45,068
Convertible debt interest expense, net of income tax		2,314		1,664		—

Diluted	$	101,157	$	76,620	$	45,068

Weighted average common shares outstanding
Basic		45,989		44,929		42,226
Effect of dilutive stock options		2,696		3,808		4,714
Effect of dilutive convertible debt		2,724		2,202		—

Diluted		51,409		50,939		46,940

Stock Split

In August 2001, the Company completed a ten-for-one stock split for shares traded on the Swiss Exchange. ADSs traded on Nasdaq were not affected. As a result, the ratio of ten ADSs to one registered share changed to a new ratio of one ADS to one registered share. In July 2000, Logitech completed a two-for-one stock split for shares traded on the Swiss Exchange and ADSs traded on Nasdaq. All references to share and per-share data for all periods presented have been adjusted to give effect to these stock splits.

Stock-Based Compensation Plans

The Company has adopted the pro forma disclosure-only requirements of Statement of Financial Accounting Standards (“SFAS”) 123, “Accounting for Stock-Based Compensation” and SFAS 148, “Accounting for Stock Based Compensation, Transition and Disclosure,” which require companies to measure employee stock compensation based on the fair value method of accounting. As permitted by SFAS 123, the Company follows the accounting provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” which uses the intrinsic value method in accounting for compensation expense under the stock option and purchase plans. Under the intrinsic value method, compensation expense is not recognized unless the exercise price of an option is less than the market value of the underlying stock on the grant date. If compensation expense under these plans had been determined pursuant to SFAS 123, the Company’s net income and net income per share would have been as follows:

F-10

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Year ended March 31,
	2003			2002			2001
	(in thousands, except per share data)
Net income:
As reported	$	98,843		$	74,956		$	45,068
Add back: Stock-based employee compensation expense included in reported net income		92			196			437
Deduct: total stock-based compensation expense determined under the fair value based method, net of related tax		(21,300	)		(19,380	)		(13,715	)

Pro forma net income	$	77,635		$	55,772		$	31,790

Basic earnings per share and ADS:
As reported	$	2.15		$	1.67		$	1.07
Pro forma basic net income per share and ADS	$	1.69		$	1.24		$	0.75

Diluted earnings per share and ADS:
As reported	$	1.97		$	1.50		$	0.96
Pro forma diluted net income per share and ADS	$	1.56		$	1.13		$	0.68

The fair value of the grants under the purchase plans and stock option plans was estimated using the Black-Scholes valuation model with the following assumptions and values:

	Year ended March 31,
	Purchase Plans									Stock Option Plans
	2003			2002			2001			2003			2002			2001
Dividend yield		0			0			0			0			0			0
Expected life		6 months			6 months			6 months			3.3 years			2.9 years			2.7 years
Expected volatility		67	%		67	%		70	%		72	%		69	%		66	%
Risk-free interest rate		1.75	%		3.625	%		4.25	%		1.75	%		3.625	%		4.25	%
Weighted average fair value of grant	$	14.50		$	9.20		$	9.00		$	15.00		$	12.06		$	13.80

F-11

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income:

Comprehensive income or loss is defined as the total change in shareholders’ equity during the period other than from transactions with shareholders. For the Company, comprehensive income consists of net income, the net change in the accumulated foreign currency translation adjustment account, the net change in unrealized gains or losses on marketable equity securities and the net change in deferred realized gains and losses in hedging activity. Comprehensive income is presented as an element of shareholders’ equity.

Reclassifications

Certain amounts reported in prior years’ financial statements have been reclassified to conform to the current year presentation.

Note 3—Acquisition of Labtec:

On March 27, 2001, the Company acquired Labtec, Inc. a publicly-traded Vancouver, Washington-based provider of PC speakers, headsets and microphones, personal audio products for MP3 players and other portable audio devices, 3D input devices, and other accessories for computing, communications and entertainment. Under terms of the merger agreement, Logitech purchased substantially all outstanding shares of Labtec for $76.3 million in cash ($47.6 million) and stock ($25.4 million), including transaction costs ($3.3 million).

The purchase was financed through $35 million of short-term borrowings under a term loan credit facility, $25.4 million through the issuance of 1,142,998 Logitech ADSs and the remainder through internally generated funds. For accounting purposes, Logitech ADSs were valued at the average closing price for a five-day period encompassing March 20, 2001, the date the number of shares to be issued was determined. In April 2001, the Company borrowed an additional $55 million through its term loan credit facility to repay indebtedness and obligations of Labtec as well as to pay costs and expenses in connection with the acquisition. The Company refinanced these short-term borrowings with $95.6 million of long-term convertible bonds in June 2001.

The acquisition was accounted for using the purchase method of accounting. Therefore, the assets acquired and liabilities assumed were recorded at their preliminary estimated fair values as determined by the Company’s management based upon assumptions as to future operations and other information available at the time of the acquisition. The Company obtained an independent appraisal to assist in the determination of the fair values of the acquired identifiable intangible assets.

A summary of the final purchase price allocation to the fair values of assets acquired and liabilities assumed in the acquisition is as follows (in thousands):

Fair value of tangible assets acquired	$	37,940
Estimated fair values of intangible assets acquired:
Patents and core technology		2,944
Existing technology		3,879
Trademark/tradename		4,151
Goodwill		98,790
Fair value of liabilities assumed		(71,439	)
Restructuring liabilities		(3,250	)
Purchased in-process research and development		3,275

Total net assets acquired (purchase price)	$	76,290

The values of the patents, core technology, trademark and tradename were estimated using the relief from royalty method. These assets are being amortized on a straight-line basis over their estimated useful lives of four to five years. Where development projects had reached technological feasibility, they were classified as existing technology, and are being amortized on a straight-line basis over an estimated useful life of four years.

F-12

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Where the development projects had not reached technological feasibility and had no further alternative uses, they were classified as in-process research and development (“IPR&D”), and expensed in fiscal 2001 upon the consummation of the merger. The value of IPR&D was determined by estimating the expected cash flows from the projects once commercially viable, discounting the net cash flows back to their present value and then applying a percentage of completion to the calculated value.

As a result of the acquisition of Labtec, the Company expected to incur and accrued for restructuring costs of $3.25 million for the incremental costs to exit and consolidate activities at Labtec locations, and to involuntarily terminate certain employees. During fiscal year 2002 and 2003, cash payments of $2.1 million and $.5 million were charged against the accrued liability and $.7 million of the accrual remains at March 31, 2003 to be utilized for cash payments for lease commitments over the next two years relating to duplicate facilities abandoned.

Unaudited pro forma condensed combined income statement information for the year ended March 31, 2001, as if Labtec had been acquired as of the beginning of fiscal year 2000 is shown below. These pro formas exclude the $3.3 million purchased in-process research and development charge in connection with the acquisition and costs incurred by Labtec to complete the acquisition, but include adjustments to conform Labtec’s accounting policies, including areas such as accounts receivable, inventories and related accounts, to those accounting policies followed by Logitech.

	Year ended March 31,				Pro Forma Year ended March 31, 2001
	2003		2002		Pro Forma Year ended March 31, 2001
	(in thousands, except per share data)
Net sales	$	1,100,288	$	943,546	$	822,947
Operating income	$	123,882	$	97,218	$	57,344
Net income	$	98,843	$	74,956	$	40,599
Net income per share and ADS:
Basic	$	2.15	$	1.67	$	.96
Diluted	$	1.97	$	1.50	$	.86

Note 4—Other Acquisitions and Dispositions:

3Dconnexion

In June 1998, the Company acquired 49% of the outstanding shares of 3Dconnexion, the provider of Logitech’s 3D controllers, and accounted for its investment using the equity method. In September 2001, the Company acquired an additional 2% of the outstanding shares and a controlling interest in 3Dconnexion. 3Dconnexion’s assets and liabilities have been included in the Company’s consolidated financial statements since September 30, 2001, and its results of operations have been included since October 1, 2001. The impact of 3Dconnexion’s assets, liabilities and results of operations have not been material to the Company’s financial position, sales, results of operations, cash flows or earnings per share.

On April 5, 2002, the Company exercised its option to purchase the remaining outstanding shares for $7.4 million, payable in July 2003. A summary of the purchase consideration is as follows (in thousands):

Net investment in 3Dconnexion at April 5, 2002	$	5,800
Notes payable to 3Dconnexion stockholders		7,400
Transaction costs		510

Total consideration	$	13,710

The acquisition of the remaining outstanding shares has been accounted for using the purchase method of accounting. Therefore, the assets acquired and liabilities assumed were recorded at their preliminary estimated fair values as determined by the Company’s management based upon assumptions as to future operations and other information currently available. The $5.8 million net investment at April 5, 2002 reflects the original investment in 3Dconnexion using the equity method as well as the fair value of the assets and liabilities acquired at the time of the 2% acquisition.

F-13

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company obtained an independent appraisal to assist in the determination of the fair values of the acquired identifiable intangible assets. A summary of the allocation of the purchase price to the fair values of assets acquired and liabilities assumed in the acquisition is as follows (in thousands):

Core technology	$	2,100
Existing technology		4,800
Trademarks		200
Goodwill		6,610

Total net assets	$	13,710

The values of the core technology and trademarks were estimated using the relief from royalty method and the values of the existing technology were estimated using the future cash flows method. These assets are being amortized on a straight-line basis over their estimated useful lives of five years.

The 3Dconnexion business has been combined with the 3D input device business acquired with the Labtec acquisition to offer a complete line of 3D input devices utilizing the market strengths, engineering resources and global presence of both entities.

Spotlife

In November 1999, Logitech announced the formation of a new company, Spotlife Inc., whose business was to enhance video communications using the Internet infrastructure. Logitech invested $7 million in Spotlife and, at March 31, 2002, owned approximately 35.2% of Spotlife’s outstanding shares on a fully diluted basis. Outside investors had the ability to exercise significant influence over the management of the company, and Logitech accounted for its investment in this company using the equity method.

On May 3, 2002, the Company acquired the remaining 64.8% of Spotlife Inc. for approximately $2.5 million in cash. The acquisition was accounted for using the purchase method of accounting. The assets acquired and liabilities assumed were recorded at their estimated fair values as determined by the Company’s management based upon assumptions as to future operations and other information available at the time of the acquisition. The fair value of the assets acquired and liabilities assumed approximated the cash paid. As a result, no intangible assets were recorded. The impact of Spotlife’s assets, liabilities and results of operations was not material to the Company’s financial position, sales, results of operations, cash flows or earnings per share.

Connector Resources Unlimited, Inc.

With the acquisition of Labtec in March 2001, the Company acquired Connector Resources Unlimited, Inc. (CRU). CRU is a supplier of security-oriented computer data storage products. In November 2002, the Company sold the assets net of liabilities of CRU to an acquisition group organized by Veber Partners for $1.5 million in cash, which approximated book value. The Company recognized no gain or loss on this sale in fiscal 2003. The impact of CRU’s assets, liabilities and results of operations was not material to the Company’s financial position, sales, results of operation, cash flows or earning per share.

Note 5—Equity Investments:

In April 1998, the Company acquired 10% of the then outstanding stock of Immersion Corporation, a developer of force feedback technology for PC peripherals and software applications. In November 1999, Immersion registered shares on the U.S. Nasdaq Stock Market in an initial public offering. In June 2002, the Company reviewed the fair value of its investment in Immersion Corporation and determined that a portion of the decrease in the value was other than temporary and wrote down the securities by $.5 million, included in other income, net. In September 2002, the Company sold its remaining interest in Immersion. The Company recognized losses of $.2 million in 2003 and gains of $1.1 million and $1.3 million in 2002 and 2001 on sales of Immersion stock, included in other income, net.

The Company uses the cost method of accounting for all other investments, all of which represent less than 20% ownership interests.

F-14

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6—Balance Sheet Components:

	March 31,
	2003			2002
	(In thousands)
Accounts receivable:
Accounts receivable	$	217,596		$	203,717
Allowance for doubtful accounts		(7,716	)		(7,578	)
Allowance for returns and other		(28,236	)		(25,036	)

	$	181,644		$	171,103

Inventories:
Raw materials	$	19,710		$	12,404
Work-in-process		418			201
Finished goods		103,995			72,519

	$	124,123		$	85,124

Other current assets:
Tax and VAT refund receivables	$	14,154		$	12,893
Deferred taxes		10,004			8,863
Prepaid expenses		8,060			6,815
Other current		6,544			4,915

	$	38,762		$	33,486

Property, plant and equipment:
Land	$	1,830		$	1,757
Plant and buildings		19,722			18,092
Equipment		68,158			55,219
Computer equipment and software		53,416			39,854

		143,126			114,922
Less accumulated depreciation		(104,212	)		(82,836	)

	$	38,914		$	32,086

Other assets:
Deposits	$	1,037		$	2,358
Debt issuance costs		1,782			2,295
Deferred taxes		2,501			59
Advance royalty payment		3,173			—
Other		36			44

	$	8,529		$	4,756

Note 7—Goodwill and Other Intangible Assets:

Effective April 1, 2001, the Company adopted SFAS No. 142, “Goodwill and Intangible Assets” and No. 141, “Business Combinations”, which were issued by the Financial Accounting Standards Board in July 2001. Under these standards, the Company reclassified intangibles associated with assembled workforce to goodwill and ceased amortizing goodwill effective April 1, 2001. This resulted in not recognizing $6.3 million and $6.0 million in amortization expense for the years ended March 31, 2003 and 2002, that would have been recognized had the old standards been in effect. Fiscal year 2001 included $1.0 million in amortization expense recorded under the old standards. For the year ended March 31, 2001, adjusted net income, basic earnings per share and diluted earnings per share would have been $45.9 million, $1.09 and $.98 under the new standard.

F-15

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Acquired other intangible assets subject to amortization were as follows:

	March 31, 2003					March 31, 2002
	Gross Carrying Amounts		Accumulated Amortization			Gross Carrying Amounts		Accumulated Amortization
	(In thousands)
Trademark/tradename	$	15,671	$	(7,040	)	$	15,265	$	(5,024	)
Existing and core technology		17,323		(8,431	)		10,423		(5,306	)
Other		500		(500	)		500		(500	)

	$	33,494	$	(15,971	)	$	26,188	$	(10,830	)

For the years ended March 31, 2003, 2002, and 2001 amortization expense for other intangible assets was $5.1, $3.7 million, and $2.0 million. The estimated future annual amortization expense for other intangible assets is $5.1 million, $5.1 million, $3.4 million, $2.5 million, and $1.1 million for the fiscal years 2004, 2005, 2006, 2007 and 2008.

In accordance with SFAS 142, the Company completed an annual impairment test of goodwill in the fourth quarter of fiscal 2003 and determined that goodwill was not impaired. As the Company has fully integrated Labtec as well as previously acquired companies, discrete financial information for the acquisitions is no longer available. As a result, the Company has completed the impairment test for the Labtec goodwill on an enterprise value basis.

Note 8—Financing Arrangements:

Short-term Credit Facilities

The Company had several uncommitted, unsecured bank lines of credit aggregating $63 million at March 31, 2003. Borrowings outstanding were $8.9 million and $5.3 million at March 31, 2003 and 2002. The borrowings under these agreements were denominated in Japanese yen at a weighted average annual interest rate of 1.4% at March 31, 2003 and 2002, and were due on demand.

Long-term Debt

	March 31,
	2003		2002
	(In thousands)
Convertible bonds	$	127,722	$	101,916
Renewable Swiss mortgage loan due April 2004, bearing interest at 4%, collateralized by properties with net book values aggregating $2.2 million at March 31, 2003		3,409		2,749
Capital lease obligation, with repayments of $1.2 million and $.5 million in fiscal 2004 and 2005		1,730		387

Total long-term debt		132,861		105,052
Less current maturities		1,246		240

Long-term portion	$	131,615	$	104,812

On June 8, 2001, Logitech sold CHF 170,000,000 (US $95,625,000) aggregate principal amount of its 1% Convertible Bonds, which mature in 2006. The net proceeds of the convertible bond offering were used to refinance debt associated with the acquisition of Labtec. The Company registered the convertible bonds for resale with the Swiss Stock Exchange. The convertible bonds were issued in denominations of CHF 5,000 at par value, with interest at 1.00% payable annually, and final redemption in June 2006 at 105%, representing a yield to maturity of 1.96%.

F-16

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The convertible bonds are convertible at any time into Logitech registered shares at the conversion price of CHF 62.4 (US $46.05) per share. Early redemption is permitted at any time at the accreted redemption amount. The Company accounts for the redemption premium over the term of the loan by recording interest expense and increasing the carrying value of the loan. As of March 31, 2003, the carrying amount of the convertible bonds was CHF 173,079,000 (US $127,722,000) and the fair value based upon quoted market value was $134,547,000.

Note 9—Shareholders’ Equity:

In June 2002, the authorization for 10 million registered shares previously authorized by the Company’s shareholders expired unused, and in June 2002, the Company’s shareholders approved an increase of 10 million authorized registered shares for use in acquisitions, mergers and other transactions. Also in June 2002, the shareholders approved an increase of 6 million shares in the conditionally authorized share capital.

In June 2001, the Company’s shareholders approved a ten-for-one share split for shares traded on the Swiss Exchange, which took effect on August 2, 2001 and was distributed to stockholders of record as of August 1, 2001. ADSs traded on Nasdaq were not affected. As a result, the ratio of ten ADSs to one registered share changed to a new ratio of one ADS to one registered share.

In June 2000, the Company’s shareholders approved a two-for-one stock split for shares traded on the Swiss Exchange and ADSs traded on Nasdaq, which took effect on July 5, 2000 and was distributed to stockholders of record as of July 4, 2000.

Pursuant to Swiss corporate law, Logitech International S.A. may only pay dividends in Swiss francs. The payment of dividends is limited to certain amounts of unappropriated retained earnings (approximately $104 million at March 31, 2003) and is subject to shareholder approval. The Company does not intend to pay any cash dividends.

Under Swiss corporate law, a minimum of 5% of the Company’s annual net income must be retained in a legal reserve until this reserve equals 20% of the Company’s issued and outstanding aggregate par value share capital. Certain other countries in which the Company operates apply similar laws. These legal reserves represent an appropriation of retained earnings that are not available for distribution and approximated $7.1 million at March 31, 2003.

In June 2002, the Company repurchased 88,000 shares for $3.8 million in open market transactions under a short-term stock buyback program. In July 2002, the Company announced a program to buy back up to CHF 75 million (approximately $52 million based on exchange rates at the date of the announcement) of Logitech shares in a twelve-month period. In March 2003, the Company completed its buy back program with the repurchase of 1,509,000 shares for $52.4 million in open market transactions under this program. In February 2003, the Board of Directors authorized an additional repurchase plan for up to CHF 75 million (approximately $55 million based on exchange rates at the date of the announcement) of the Company’s registered shares over the next twelve months. At March 31, 2003, the Company had repurchased 238,000 shares under the new plan for $7.6 million in open market transactions.

Note 10—Employee Benefit Plans:

Stock Compensation Plans

Employee Share Purchase Plans

Under the 1989 and 1996 Employee Share Purchase Plans, eligible employees may purchase registered shares at the lower of 85% of the fair market value at the beginning or the end of each six-month offering period. Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period.

Stock Option Plans

Under the 1988 Stock Option Plan, options to purchase registered shares were granted to employees and consultants at exercise prices ranging from zero to amounts in excess of the fair market value of the registered shares on the date of grant. The terms and conditions with respect to options granted were determined by the Board of Directors who administered this plan. Options generally vest over four years and remain outstanding for periods not exceeding ten years. Further grants may not be made under this plan.

F-17

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the 1996 Employee Stock Plan, the Company may grant to employees options for registered shares or ADRs, restricted shares, stock appreciation rights, and stock units, which are bookkeeping entries representing the equivalent of shares. A total of 19,000,000 registered shares and/or ADRs may be issued under this plan. Options generally vest over four years and remain outstanding for periods not to exceed ten years. Options may only be granted at exercise prices of at least 100% of the fair market value of the registered shares on the date of grant; restricted shares and stock appreciation rights may be granted at prices less than 100% of the fair market value of the registered shares on the date of grant; no cash consideration is required to be paid by employees in connection with the grant of stock units. The Company has made no grants of restricted shares, stock appreciation rights or stock units.

The Company also maintains one other option plan for a small number of Asian executives, under which options were granted at exercise prices discounted from fair market value of the registered shares on the date of grant. No further stock options may be granted under this plan. At March 31, 2003, 274,800 options had been granted with 7,455 options outstanding under this plan.

Compensation expense is recognized over the vesting period when the exercise price of an option is less than the fair market value of the underlying stock on the date of grant. Compensation expense of $92,000, $196,000 and $437,000 was recorded for the years ended March 31, 2003, 2002 and 2001. Such amounts are accrued as a liability when the expense is recognized and subsequently credited to additional paid-in capital upon exercise of the related stock option. There is no further compensation expense arising from stock options outstanding at March 31, 2003 to be recognized in future periods.

A summary of activity under the stock option plans, including weighted average exercise price, is as follows:

	Year ended March 31,
	2003				2002				2001
	Number		Exercise Price		Number		Exercise Price		Number		Exercise Price
Outstanding, beginning of year	7,787,950		$	17	7,846,660		$	12	7,705,540		$	6
Granted	1,581,725		$	31	2,355,375		$	27	2,112,180		$	29
Exercised	(1,301,845	)	$	9	(1,998,981	)	$	7	(1,547,290	)	$	5
Cancelled or expired	(330,694	)	$	30	(415,104	)	$	15	(423,770	)	$	13

Outstanding, end of year	7,737,136		$	21	7,787,950		$	17	7,846,660		$	12

Exercisable, end of year	3,612,857		$	13	2,796,675		$	9	2,450,770		$	5

The following table summarizes information regarding stock options outstanding at March 31, 2003:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number	Weighted Average Exercise Price		Weighted Average Contractual Life (years)	Number	Weighted Average Exercise Price
$ 0 - $ 7	1,658,198	$	5	5.33	1,658,031	$	5
$ 7 - $ 25	1,999,998	$	16	7.47	947,396	$	9
$ 26 - $ 28	1,740,467	$	27	8.84	297,422	$	27
$ 29 - $ 38	1,796,348	$	32	7.99	625,653	$	33
$ 39 - $ 55	542,125	$	40	7.66	84,355	$	38

$ 0 - $ 55	7,737,136	$	21	7.54	3,612,857	$	13

F-18

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension Plans

Defined Contribution Plans

Certain of the Company’s subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees. Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others. The charges to expense for these plans for the years ended March 31, 2003, 2002 and 2001, were $3,397,000, $2,707,000 and $1,275,000.

Defined Benefit Plan

One of the Company’s subsidiaries sponsors a noncontributory defined benefit pension plan covering substantially all of its employees. Retirement benefits are provided based on employees’ years of service and earnings. The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations. Net pension costs for the years ended March 31, 2003, 2002 and 2001 were $427,000, $321,000 and $193,000. The plan’s net pension liability at March 31, 2003 and 2002 was $789,000 and $530,000.

Note 11—Income Taxes:

The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company’s income before taxes and the provision for income taxes are generated outside of Switzerland. The portion of the Company’s income before taxes for fiscal year 2003, 2002 and 2001 that is subject to foreign income taxes was $52.2 million, $40.8 million and $29.9 million. Consequently, the weighted average expected tax rate may vary from period to period to reflect the generation of taxable income in different tax jurisdictions.

The provision for income taxes consists of the following:

	Year ended March 31,
	2003			2002			2001
	(In thousands)
Current:
Swiss	$	2,277		$	1,900		$	852
Foreign		23,353			18,407			10,641
Deferred:
Swiss		1,425			—			—
Foreign		(2,346	)		(1,568	)		593

Total	$	24,709		$	18,739		$	12,086

F-19

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred income tax assets and liabilities consist of the following:

	March 31,
	2003			2002
	(In thousands)
Net operating loss carryforwards	$	17,429		$	25,161
Research and development and other tax credit carryforwards		7,415			6,275
Accruals		18,144			18,600
Depreciation and amortization		4,317			1,237
Other		—			444

Gross deferred tax assets		47,305			51,717

Deferred tax liabilities related to intangible assets		(3,910	)		(5,315	)

Deferred tax liabilities		(3,910	)		(5,315	)

Valuation allowance		(33,375	)		(37,303	)

Net deferred tax assets	$	10,020		$	9,099

Management regularly assesses the ability to realize deferred tax assets recorded in the Company’s subsidiaries based upon the weight of available evidence, including such factors as the recent earnings history and expected future taxable income. The methodology used by management to determine the amount of deferred tax assets that are likely to be realized is based upon the Company’s recent earnings and estimated future taxable income in applicable tax jurisdictions for approximately the next two years. Management believes that it is more likely than not that the Company will not realize a portion of its deferred tax assets and, accordingly, a valuation allowance of $33.4 million has been established for such amounts at March 31, 2003. In fiscal years ending 2003, 2002 and 2001, the valuation allowance decreased by $3.9 million, increased by $13.0 million and increased by $9.2 million. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, the Company could be required to increase the valuation allowance for deferred tax assets. This would result in an increase in the Company’s effective tax rate.

At March 31, 2003, the Company’s foreign net operating loss and tax credit carryforwards for income tax purposes were approximately $47.2 million and $7.4 million. If not utilized, these carryforwards will expire through 2023.

Deferred tax assets of approximately $20 million at March 31, 2003 pertain to certain tax credits and net operating loss carry forwards resulting from the exercise of employee stock options. When recognized, through generating sufficient taxable income to utilize the NOL deductions, the tax benefit of these credits and losses will be accounted for as a credit to shareholders’ equity rather than as a reduction of the income tax provision.

The difference between the provision for income taxes and the expected tax provision at the weighted average tax rate is reconciled below. The expected tax provision at the weighted average rate is generally calculated using pre-tax accounting income or loss in each country multiplied by that country’s applicable statutory tax rates.

	Year ended March 31,
	2003			2002			2001
	(In thousands)
Expected tax provision at weighted average rate	$	26,827		$	20,144		$	12,665
Non-deductible purchased in-process R&D		—			—			655
Decrease in valuation allowance, without the impact of stock options		(2,247	)		(1,155	)		(1,380	)
Other		129			(250	)		146

Total provision for income taxes	$	24,709		$	18,739		$	12,086

F-20

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12—Derivative Financial Instruments – Foreign Exchange Hedging:

The Company enters into forward foreign exchange contracts (accounted for as cash flow hedges) to hedge against exposure to changes in foreign currency exchange rates related to forecasted inventory purchases by subsidiaries. Hedging contracts generally mature within three months. Gains and losses in the fair value of the effective portion of the contracts are deferred as a component of accumulated other comprehensive income until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. If the underlying transaction being hedged fails to occur or if a portion of the hedge does not generate offsetting changes in the foreign currency exposure of our forecasted inventory purchases, the Company immediately recognizes the gain or loss on the associated financial instrument in other income (expense). The Company did not record any gains or losses due to hedge ineffectiveness during fiscal 2003 and 2002.

The notional amount of foreign exchange contracts outstanding at March 31, 2003 and 2002 were $13 million and $7 million. The notional amount represents the future cash flows under contracts to purchase foreign currencies. Deferred realized gains, net of deferred realized losses, totaled $.6 million at March 31, 2003 and is expected to be classified into cost of goods sold when the related inventory is sold. Realized net losses classified to cost of goods sold during the year ended March 31, 2003 were $1.1 million.

Note 13—Commitments and Contingencies:

The Company leases facilities under operating leases, certain of which require it to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at the Company’s option and usually include escalation clauses linked to inflation. Future minimum annual rentals at March 31, 2003 are as follows (in thousands):

Year ending March 31,
2004	$	5,675
2005		4,732
2006		4,109
2007		945
2008 and thereafter		2,516

	$	17,977

Rent expense was $6.3 million, $5.2 million and $3.2 million during the years ended March 31, 2003, 2002 and 2001.

At March 31, 2003, the Company had approximately $71.9 million in non-cancelable purchase commitments with suppliers for inventory. Fixed commitments for capital and other expenditures, primarily for manufacturing equipment, approximated $9.1 million.

Logitech indemnifies some of its suppliers and customers for losses arising from matters such as intellectual property rights and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees. No amounts have been accrued for indemnification provisions at March 31, 2003.

In December 1996, the Company was advised of the intention to begin implementing a value added tax (“VAT”) on goods manufactured in certain parts of China since July 1995, including where the Company’s operations are located, and intended for export. In January 1999, the Company was advised that the VAT would not be applied to goods manufactured during calendar 1999 and subsequent years. With respect to prior years, the Company is in

F-21

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ongoing discussions with Chinese officials and has been assured that, notwithstanding statements made by tax authorities, the VAT for these prior periods would not be charged to the Company. The Company believes the ultimate resolution of this matter will not have a material adverse effect on the Company’s financial position, cash flows or results of operations.

In the normal course of business, the Company pays value-added taxes, or VAT, in China on components purchased in China, which are refunded after export of goods manufactured in China. The Company files for refunds, receives approvals from Chinese tax officials and then receives a refund. Beginning in early fiscal year 2002, approval and refund delays started to occur and the Company accumulated a significant VAT refund receivable. The Company has received assurances from Chinese officials that all approved claims will be paid in full. In March 2003, a portion of the VAT receivable was sold to a bank on a non-recourse basis for a negotiated discount.

The total VAT receivable may increase or decrease in the future depending on the amount of component purchases in China, the amount of collections from the Chinese government and the amount of VAT that the Company may be able to sell on a non-recourse basis to a bank in the future. Based on expectations as to the timing of such payments, the Company has classified a portion of the VAT receivable as a non-current asset. The Company does not expect the outcome of this matter to have a significant impact on the Company’s financial position or results of operations.

The Company is involved in a number of lawsuits relating to patent infringement and intellectual property rights. The Company believes the lawsuits are without merit and intends to defend against them vigorously. However, there can be no assurances that the defense of any of these actions will be successful, or that any judgment in any of these lawsuits would not have a material adverse impact on the Company’s business, financial condition and result of operations.

Note 14—Interest and Other Income:

	Year ended March 31,
	2003			2002			2001
	(In thousands)
Interest income	$	2,411		$	1,688		$	1,175
Interest expense		(3,607	)		(3,644	)		(1,323	)

Interest expense, net	$	(1,196	)	$	(1,956	)	$	(148	)

Gain on sale of building	$	—		$	—		$	1,922
Foreign currency exchange gains, net		2,801			2			20
Gain (loss) on sale of investments		(514	)		1,115			1,296
Equity in net losses of affiliated companies		—			(2,476	)		(670	)
Write-off of investments		(1,161	)		(1,220	)		(50	)
Insurance proceeds / (non-recovery of insurance claim)		(370	)		576			—
Other, net		110			436			110

Other income (expense), net	$	866		$	(1,567	)	$	2,628

Note 15—Geographic Information:

The Company operates in one business segment, which is the design, development, production, marketing and support of computer interface devices. Geographic net sales information in the table below is based on the location of the selling entity. Long-lived assets, primarily fixed assets, unamortized intangibles, and investments are reported below based on the location of the asset.

F-22

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net sales to unaffiliated customers by geographic region were as follows:

	Year ended March 31,
	2003		2002		2001
	(In thousands)
Europe	$	487,762	$	413,348	$	334,414
North America		435,612		389,949		278,935
Asia Pacific		176,914		140,249		122,200

Net sales	$	1,100,288	$	943,546	$	735,549

In fiscal year 2003, one customer represented 12.4% of net sales and in fiscal year 2002, another customer represented 11% of net sales. In fiscal year 2001, no one customer accounted for more than 10% of our net sales.

Long-lived assets by geographic region were as follows:

	March 31,
	2003		2002
	(In thousands)
Europe	$	47,221	$	38,944
North America		114,736		111,846
Asia Pacific		13,082		12,081

Total long-lived assets	$	175,039	$	162,871

Note 16—Other Disclosures Required by Relevant Swiss Law:

Balance Sheet Items

	March 31,
	2003		2002
	(In thousands)
Prepayments and accrued income	$	8,339	$	7,539
Non-current assets	$	175,038	$	162,930
Pension liabilities, current	$	190	$	127
Fire insurance value of property, plant and equipment	$	98,153	$	97,130

Statement of Income Items

Total personnel expenses amounted to $98.7 million, $79.3 million and $64.1 million in 2003, 2002 and 2001.

F-23

LOGITECH INTERNATIONAL S.A.

QUARTERLY FINANCIAL DATA

(Unaudited)

	Three months ended,
	Mar. 31, 2003		Dec. 31, 2002		Sept. 30, 2002		June 30, 2002		Mar. 31, 2002		Dec. 31, 2001		Sept. 30, 2001		June 30, 2001
	(In millions, except share and per share amounts)
Net sales	$	301.7	$	351.8	$	251.8	$	195.1	$	256.0	$	299.1	$	217.6	$	170.9
Gross profit		95.2		117.0		85.9		66.3		87.4		103.8		70.7		53.6
Operating expenses:
Marketing and selling		33.7		41.3		35.9		30.3		32.1		39.2		32.1		26.7
Research and development		15.3		14.2		13.7		12.9		16.6		12.4		11.1		10.4
General and administrative		11.4		10.8		10.6		10.5		10.6		10.0		8.8		8.3
Total	$	60.4	$	66.2	$	60.3	$	53.7	$	59.3	$	61.6	$	52.0	$	45.4
Operating income		34.8		50.8		25.7		12.6		28.1		42.2		18.7		8.2
Net income	$	26.6	$	40.4	$	21.0	$	10.8	$	21.5	$	33.2	$	13.9	$	6.3
Shares used to compute net income per share and ADS: (in thousands):
Basic		45,721		46,046		46,133		46,065		45,511		44,782		44,892		44,532
Diluted		50,607		51,168		51,593		52,542		52,422		51,291		51,281		48,446
Net income per share and ADS:
Basic	$	.58	$	.88	$	.46	$	.23	$	.47	$	.74	$	.31	$	.14
Diluted	$	.54	$	.80	$	.42	$	.22	$	.42	$	.66	$	.28	$	.13

The following table sets forth certain quarterly financial information as a percentage of net sales:

	Three months ended,
	Mar. 31, 2003		Dec. 31, 2002		Sept. 30, 2002		June 30, 2002		Mar. 31, 2002		Dec. 31, 2001		Sept. 30, 2001		June 30, 2001
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Gross profit	31.6		33.3		34.1		34.0		34.2		34.7		32.5		31.3
Operating expenses:
Marketing and selling	11.1		11.7		14.3		15.5		12.6		13.1		14.7		15.6
Research and development	5.1		4.0		5.4		6.6		6.5		4.1		5.1		6.1
General and administrative	3.8		3.1		4.2		5.4		4.1		3.4		4.1		4.8
Total	20.0		18.8		23.9		27.5		23.2		20.6		23.9		26.6
Operating income	11.5		14.5		10.2		6.5		11.0		14.1		8.6		4.8
Net income	8.8	%	11.5	%	8.3	%	5.5	%	8.4	%	11.1	%	6.4	%	3.7	%

F-24

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of

Logitech International S.A.

Our audits of the consolidated financial statements referred to in our report dated April 22, 2003, appearing in the 2003 Annual Report to Shareholders of Logitech International S.A. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 20-F) also included an audit of the financial statement schedule listed in Item 19 of this Form 20-F. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

PricewaterhouseCoopers SA

/s/ M. Foley

M. Foley

/s/ M. Perry

M. Perry

Lausanne, Switzerland

April 22, 2003

SCHEDULE II

LOGITECH INTERNATIONAL S.A.

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Fiscal Year	Description	Balance at beginning of period		Charged to bad debt expense		Write-offs charged to allowance			Balance at end of period
2003	Allowance for doubtful accounts	$	7,578	$	4,380	$	(4,242	)	$	7,716
2002	Allowance for doubtful accounts	$	5,402	$	4,530	$	(2,354	)	$	7,578
2001	Allowance for doubtful accounts	$	3,190	$	4,500	$	(2,288	)	$	5,402

EXHIBIT 1.1

LOGITECH INTERNATIONAL S.A.

ARTICLES OF INCORPORATION

APPROVED BY THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

ON JUNE 27, 2002

TITLE 1

CORPORATE NAME—REGISTERED OFFICE—PURPOSE—DURATION

Article 1

There exists under the corporate name

“ Logitech International S.A. ”

a corporation ( société anonyme ) governed by the present Articles of Incorporation and by Title twenty-six of the Swiss Code of Obligations (the “CO”).

The duration of the Company shall be indefinite.

The registered office is in Apples.

Article 2

The Company shall be a holding company with the purpose of coordinating the activities of various Swiss and foreign subsidiaries of the Logitech group.

In addition, it shall have as a purpose the acquisition and management of shareholdings in other companies, and in particular the acquisition, holding and/or assignment of shareholdings in other commercial, industrial, financial or real property companies and enterprises, in Switzerland or abroad, directly or indirectly, in its own name and for its own account, or for the accounts of third parties, as investments or for other reasons, as well as for the financing of affiliated companies.

The Company may conduct, in Switzerland or abroad, any manner of activities, create branch offices, and undertake any real estate, financial or commercial operations which relate directly or indirectly to its purpose.

TITLE II

SHARE CAPITAL AND SHARES

Article 3

The share capital is fixed at CHF 47,901,655.- (forty-seven million nine hundred one thousand six hundred fifty-five Swiss francs), entirely paid-in.

It is divided into 47,901,655 (forty-seven million nine hundred one thousand six hundred fifty-five) registered shares having a par value of 1.- (one) Franc each.

Article 4

The shares shall be registered. They shall be numbered and shall bear the facsimile signatures of two members of the Board of Directors.

The general meeting of shareholders shall have the authority to convert the registered shares into bearer shares by means of an amendment to the Articles of Incorporation.

The Company shall have the authority to issue certificates representing blocks of shares.

The Company may forego the printing of registered shares and issuing of securities. However, any shareholder may require that the Company print and issue stock certificates at any time and free of charge. The Board of Directors shall set forth in regulations the details and the requirements for the execution thereof.

Article 5

Each share shall confer the right to a proportional part of the profit resulting from the balance sheet and the proceeds of liquidation.

Shareholders shall only have those obligations specified in the Articles of Incorporation, and shall not be personally liable for the debts of the Company.

Shares shall be indivisible; the Company shall recognize only one representative per share.

The ownership of a share shall entail acceptance of the provisions of these Articles of Incorporation.

Article 6

The Company shall maintain a share register which lists the names of the owners and beneficiaries of the shares as well as their domiciles.

Only those persons entered in the share register as owners shall be deemed to be shareholders of the Company.

The transfer of share ownership shall require delivery of the properly endorsed share certificate to the purchaser.

Registered shares not incorporated into a certificate as well as the respective rights associated therewith which are not incorporated into any certificate may be transferred only by assignment. Such assignment shall be valid only if the Company has been notified thereof.

When a shareholder appoints a bank as his agent to manage registered shares not incorporated into a certificate, such shares and the respective rights attached thereto likewise not incorporated into any certificate may be transferred only with the consent of said bank. Share pledging shall be possible only for the benefit of that bank; it is not necessary that the Company be notified.

Article 7

The Company shall not make any changes in the share register between the date of sending of the notices for a general meeting of shareholders and the day following such a meeting.

Should a shareholder change his address, he must so inform the Company. As long as a shareholder has not provided notice of a change of address to the Company, any written communication shall be validly made to his last address entered in the share register.

TITLE III

THE ORGANIZATION OF THE COMPANY

A. GENERAL MEETING OF SHAREHOLDERS

Article 8

The general meeting of shareholders shall be the supreme authority of the Company. It holds the inalienable rights provided for under Art. 698 of the CO.

The general meeting of shareholders shall convene at the place designated by the Board of Directors.

One or more shareholders who represent together at least ten per cent of the share capital may demand that a general meeting of the shareholders be called. One or more shareholders who represent together shares having an aggregate par value of one million Swiss Francs may demand that an item be included on the agenda for a shareholders’ meeting. A shareholder demand to call a meeting and to include an item on the agenda shall be made in writing and shall describe the matters to be considered and any proposals to be made to the shareholders. Such written request shall be received by the Board of Directors at least sixty (60) days before the date proposed for the general meeting of shareholders.

Article 9

The general meeting of shareholders shall be called in writing by notices sent to each shareholder at the address entered in the share register at least twenty days before the date of the meeting.

Article 10

Each share confers the right to one vote.

Only those shareholders who are registered on the day of the mailing of the notices convening the general meeting of shareholders shall have the right to vote.

Article 11

Any shareholder may appoint a representative who need not be a shareholder, provided that person holds a written proxy. Members of the Board of Directors who are present shall decide whether to accept or refuse such proxies.

Article 12

The general meeting of shareholders shall be presided over by the chairman of the board or any other member of the Board of Directors. In the absence of such persons, the chairman shall be appointed by the general meeting.

The chairman shall appoint the secretary of the general meeting and the scrutineers.

Article 13

In the absence of any provision to the contrary in the law or these Articles of Incorporation, the general meeting of shareholders shall make resolutions and proceed to elections by an absolute majority of the votes cast. In the event of a tie vote, the vote of the chairman shall decide.

As a general rule, voting and elections shall be conducted by a show of hands; however, a secret ballot shall be used when the chairman so orders or when 25 shareholders present at the meeting shall so request.

B. BOARD OF DIRECTORS

Article 14

The Board of Directors of the Company shall be composed of at least three members appointed by the general meeting of shareholders for a term of three years and who shall be indefinitely re-eligible.

The Board of Directors shall organize itself. It shall be called to a meeting by the chairman as often as business requires.

Article 15

The Board of Directors shall make decisions and proceed to elections by a majority vote of the members present at the meeting. In the event of a tie vote, the vote of the chairman shall decide.

The decisions of the Board of Directors may be made in the form of a written consent (given by letter, fax or telegram) to a proposal, such consent representing a majority of all the members of the Board of Directors inasmuch as the proposal was submitted to all the members of the Board of Directors, unless a discussion is requested by one of them.

Article 16

The Board of Directors shall have the non-transferable and inalienable powers provided for under Art. 716a of the CO.

It may make decisions on any matters which have not been reserved to the general meeting of shareholders.

Article 17

The Board of Directors may, in compliance with the organizational regulations, entrust the management and the representation of the Company to one or more of its members (delegates) or to third parties (managers) who need not be shareholders.

Article 18

In countries where laws or customs require for companies that important documents, or those subject to certain conditions of form have a seal, a seal may be affixed next to the signature.

The Board of Directors shall determine those seals and set the rules regarding the use thereof.

C. AUDITORS

Article 19

The general meeting of shareholders shall appoint one or several auditors as statutory auditors. It may appoint substitute auditors.

The tenure of the auditors shall be one year; such term shall end during the general meeting of shareholders to which the annual report must be submitted. Reappointment shall be possible.

TITLE IV

BUSINESS YEAR, ANNUAL ACCOUNTS AND ALLOCATION OF PROFITS

Article 20

The business year shall begin on April 1st and end on March 31st.

Article 21

Five per cent of the annual profits shall be allocated to the general reserve until such reaches twenty per cent of the paid in share capital. Should the general reserve be used in any amount the allocation of profits shall be made until this level is reached again.

The balance of the profits arising from the balance sheet shall be distributed according to the resolutions of the general meeting of shareholders, upon proposition of the Board of Directors; however, the mandatory legal provisions of the law relating to the legal reserve must be complied with.

Article 22

Dividends shall be paid at the time specified by the Board of Directors. Any dividend which has not been claimed within five years of it becoming due is time-barred by statute of limitations and shall be forfeited to the Company by simple right and automatically.

TITLE V

LIQUIDATION

Article 23

The general meeting of shareholders shall retain its right to approve the accounts at the time of liquidation and shall have the authority to discharge the liquidators with respect to their activities in connection therewith.

After payment of liabilities, the assets of the dissolved Company shall be distributed among the shareholders pro rata according to the par value of each such shareholders’ shares.

TITLE VI

PUBLIC NOTICES—COMMUNICATIONS

Article 24

Public notices by the Company shall be made in the Feuille Officielle Suisse du Commerce (Swiss Official Commercial Gazette)).

TITLE VII

CONTRIBUTIONS IN KIND—ACQUISITION OF PROPERTY

Article 25

Daniel Borel contributed to the Company, one thousand four hundred thirty-nine (1,439) bearer shares of Logitech S.A. at Romanel-sur-Morges, at a par value of one hundred francs (CHF 100.-) each, against a total purchase price of seven million one hundred ninety-five thousand francs (-CHF 7,195,000.-).

Daniel Borel’s contribution was made and accepted the purchase price of seven million one hundred ninety-five thousand francs (CHF 7,195,000.-).

In exchange, seventy-one thousand nine hundred fifty (71,950) fully paid-in up bearer shares of Logitech International S.A. at a par value of one hundred francs (CHF 100.-) each were delivered to Daniel Borel.

Timothy Zier contributed to the Company, fourteen million twenty-eight thousand four hundred ninety-two (14,028,492) registered shares of Logitech, Inc. at Palo Alto (California, United States of America), without par value, against a total purchase price of fifteen million francs (CHF 15,000,000.-).

In exchange, one hundred fifty thousand (150,000) fully paid-in bearer shares of Logitech International S.A. at a par value of one hundred francs (CHF 100.-) each were delivered to Timothy Zier.

Daniel Borel contributed to the Company, eight hundred thousand (800,000) registered shares of Logitech Far East at Taiwan (The People’s Republic of China) [sic], at a par value of ten Taiwan dollars ($NT 10.00) each, against a total purchase price of one million francs (CHF 1,000,000.-).

Daniel Borel’s contribution was made and accepted against the purchase price of one million francs (CHF 1,000,000.-).

In exchange, ten thousand (10,000) fully paid-in bearer shares of Logitech International S.A. at a par value of one hundred francs (CHF 100.-) each were delivered to Daniel Borel.

Pierluigi Zappacosta contributed to the Company, five hundred sixty (560) bearer shares of Logitech S.A. at Romanel-sur-Morges, at a par value of one hundred francs (CHF 100.-) each, against a total purchase price of two million eight hundred thousand francs (CHF 2,800,000.-).

Pierluigi Zappacosta’s contribution was made and accepted against the purchase price of two million eight hundred thousand francs (CHF 2,800,000.-).

In exchange, twenty-eight thousand (28,000) fully paid-in bearer shares of Logitech International S.A. at a par value of one hundred francs (CHF 100.-) each were delivered to Pierluigi Zappacosta.

François Davoine contributed to the Company, one (1) bearer share of Logitech S.A. at Romanel-sur-Morges, against a purchase price of five thousand Swiss francs (CHF 5,000.-).

François Davoine’s contribution was made and accepted against the purchase price of five thousand francs (CHF 5,000.-).

In exchange, fifty (50) fully paid-in bearer shares of Logitech International S.A. at a par value of one hundred francs (CHF 100.-) each were delivered to François Davoine.

Article 26

The Company intends to purchase in cash from Daniel Borel acting as a fiduciary the following shareholdings:

•

The shares of Logitech Italia S.r.l.’s capital in the amount of twenty million lire (ITL 20,000,000.00) for a maximum amount of fifty thousand francs (CHF 50,000.-).

•

The shares of Logitech UK Ltd.’s capital in the amount of twenty thousand pounds (£ 20,000.00) for a maximum amount of one hundred thousand francs (CHF 100,000.-).

•

The shares of Logitech Japan K.K.’s capital in the amount of fifty million yen (¥ 50,000,000.00) for a maximum amount of six hundred thousand francs (CHF 600,000.-).

•

The shares of Logitech GmbH’s capital in the amount of fifty thousand German marks (DM 50,000.00) for a maximum amount of fifty thousand francs (CHF 50,000.-).

Article 27

Until June 27th, 2004, the Board of Directors shall be authorized to increase the share capital by CHF 10’000’000.- (ten million) through the issue of 10’000’000 (ten million) registered shares of CHF 1.- (one) nominal value each. The new shares must be fully paid-in. The Board of Directors may execute the capital increase in one or several blocks.

For important reasons, the Board of Directors may exclude the preferential subscription right of the shareholders, in particular if the shares are issued in connection with acquisitions of other companies or undertakings or part of undertakings and mergers with other companies, the financing of acquisitions of other companies or undertakings or part of undertakings, as well as the placement of shares on international markets for the purposes of expanding the shareholder base or to obtain a listing on a foreign stock market. The preferential subscription rights which have not been exercised shall revert to the Company and shall be used by the Board of Directors in the interest of the Company.

The Board of Directors shall set the price at which the shares will be issued, the manner in which they will be paid-in, as well as the conditions under which preferential subscription rights can be exercised.

Article 28

By the exercise of share option rights granted to certain employees, officers and directors of the group according to the 1988 Stock Option Plan, the 1989 Stock Purchase Plan, the 1996 Stock Plan and the 1996 Stock Purchase Plan, the share capital of the Company may be increased at most by fifteen million one hundred sixty-five thousand four hundred sixty-five francs (CHF 15,165,465.-) by way of the issue of fifteen million one hundred sixty-five thousand four hundred sixty-five francs (15,165,465) registered shares at a par value of one Franc (CHF 1.-) each.

The shareholders’ preferential subscription rights shall be eliminated for such new shares.

Article 29

By the exercise of conversion rights which are granted in relation with the issue of convertible bonds, the share capital of the Company shall be increased by a maximum aggregate amount of two million, seven hundred twenty-five thousand Francs (CHF 2’725’000.-) through the issuance to the holders of such bonds of a maximum of two million, seven hundred twenty-five thousand (2’725’000) fully paid-in registered shares with a nominal value of one franc (CHF 1.-) each.

The shareholders’ right to subscribe shares in priority is excluded. The shareholders’ right to subscribe for bonds in advance may be limited or excluded by the Board of Directors to finance or refinance the acquisition of enterprises or parts thereof.

To the extent that the right to subscribe for bonds in advance is excluded, (1) the bonds must be placed with the public at market conditions, (2) the term to exercise conversion rights may not exceed five years (5) as of the date of the bond issue and (3) the conversion price for the new shares must at least correspond to the market conditions prevailing at the time of the bond issue.

The above text is a translation of the original French articles of incorporation (Statuts), which constitute the definitive text and are binding in law.

EXHIBIT 4.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of this day of 2002 by and between Logitech International S.A., a Swiss company (the “Company”), and (“Indemnitee”).

WHEREAS, the Company has issued its registered shares through a registered public offering in the United States, and as a result, Indemnitee is exposed to litigation risks arising from claims that may be made under U.S. laws;

WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining directors’ and officers’ liability insurance, the significant increases in the cost of such insurance and the general limitations in the coverage of such insurance;

WHEREAS, Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee and other officers and directors of the Company or a subsidiary of the Company (“Subsidiary”) may not be willing to serve or continue to serve as officers and directors without additional protection; and

WHEREAS, the Company benefits from going public in the United States and desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as officers and directors of the Company or a Subsidiary and to indemnify these officers and directors so as to provide them with the maximum protection permitted by law.

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

1. Indemnification .

(a) Third Party Proceedings . The Company shall indemnify Indemnitee if Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or completed direct action proceeding or alternative dispute resolution (other than an action in the right of the Company) by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any Subsidiary, or by reason of any action or inaction on the part of Indemnitee while an officer or director, against expenses (including attorneys’ fees), judgments and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred by Indemnitee in connection with such action or proceeding if and to the extent Indemnitee acted without intentional misconduct or gross negligence.

(b) Proceedings in the Right of the Company . The Company shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, proceeding or alternative dispute resolution in the right of the Company to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any Subsidiary by reason of any action or inaction on the part of Indemnitee while an officer or director, against such expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee in connection with such action or proceeding if and to the extent such action or proceeding is adjudged in favor of Indemnitee.

(c) Scope . Notwithstanding any other provision of this Agreement, Indemnitee shall be entitled to such indemnification, reimbursement and the like only to the extent permitted under Swiss law.

(d) Nonexclusivity . The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under any other agreement to which Indemnitee is a party, including the Indemnification Agreement entered into by and between Indemnitee and Logitech, Inc., a California corporation and a Subsidiary. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he may have ceased to serve in such capacity at the time of any action or other covered proceeding.

2. Indemnification Procedure .

(a) Notice/Cooperation by Indemnitee . Indemnitee shall, as a condition precedent to his right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the Chief Executive Officer of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.

(b) Procedure . Any indemnification provided for in Section 1 shall be made no later than forty-five (45) days after receipt of the written request of Indemnitee. If a claim under this Agreement, under any statute, or under any provision of the Company’s Statuts or Organizational Regulations providing for indemnification, is not paid in full by the Company within forty-five (45) days after a written request for payment thereof has first been received by the Company, Indemnitee may, but need not, at any time thereafter bring an action against the Company to recover the unpaid amount of the claim and, subject to Section 10 of this

Agreement, Indemnitee shall also be entitled to be paid for the expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee of bringing such action. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any action or proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company.

3. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the expenses, (including attorneys’ fees), or judgments actually and reasonably incurred by Indemnitee in the investigation, defense, appeal or settlement of any civil action or proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses or judgments to which Indemnitee is entitled.

4. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, applicable law or public policy may prohibit the Company from indemnifying Indemnitee under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission or any other governmental agency of competent jurisdiction to submit the question of indemnification to a court in certain circumstances for a determination if the Company is right under applicable law or public policy to indemnify Indemnitee.

5. Severability . Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

7. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

8. Contribution . If the indemnification provided for in Section 2 above for any reason is held by a court of competent jurisdiction to be unavailable to Indemnitee in respect of any expenses and any other amount Indemnitee becomes legally obligated to pay, then the Company, in lieu of indemnifying Indemnitee thereunder, shall contribute to the amount paid or payable by Indemnitee (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and Indemnitee in connection with the action or inaction which resulted in such expenses or any other amounts Indemnitee is legally obligated to pay, as well as any other relevant equitable considerations.

9. Construction of Certain Phrases . References to the “Company” shall include, in addition to Logitech International S.A., any constituent company (including any constituent of a constituent) absorbed in a consolidation or merger to which Logitech International S.A. (or any of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that if Indemnitee is or was a director, officer, employee or agent of such constituent company, or is or was serving at the request of such constituent company as a director or officer of another company, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving company as Indemnitee would have with respect to such constituent company if its separate existence had continued.

10. Binding Effect; Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), spouses, heirs and personal and legal representatives.

11. Attorneys’ Fees . To the maximum extent provided for under Swiss law, in the event that any action is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee with respect to such action, except for the pro-rata amount of any such costs and expenses relating to material assertions that, as a part of such action, the court of competent jurisdiction determines were not made in good faith or were frivolous. To the maximum extent provided for under Swiss law, in the event of an action instituted in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all court costs and expenses, including attorneys, fees, incurred by Indemnitee in defense of such

action (including with respect to Indemnitee’s counterclaims and cross-claims made in such action), except for the pro-rata amount of any such court costs and expenses relating to material assertions that, as a part of such action, the court determines were not made in good faith or were frivolous.

12. Notice . All notices, requests, demands and other communications under this Agreement shall be in writing. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice.

13. Consent to Jurisdiction . The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the Ordinary Court of the District of Aubonne for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in such courts.

14. Choice of Law . This Agreement shall be governed by and its provisions construed in accordance with the laws of Switzerland with the exclusion of its Federal Statute regarding International Private Law.

15. Subrogation . In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

16. Amendment and Termination . No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

17. Integration and Entire Agreement . This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.

18. No Construction as Employment Agreement . Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries or affiliated entities.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

LOGITECH INTERNATIONAL S.A.

CH-1143 Apples

Switzerland

By:

Name: Daniel Borel

Name: François Bavaud

Title: Chairman of the Board

Title: Director

AGREED TO AND ACCEPTED:


INDEMNITEE


(signature)

Address:

EXHIBIT 4.2

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of this day of 2002 by and between Logitech, Inc., a California corporation (the “Company”), and ,(“Indemnitee”).

WHEREAS, Logitech International S.A., a Swiss company and the parent of the Company (the “Parent”) has issued its registered shares through a registered public offering in the United States;

WHEREAS, the Company benefits from the Parent being a public company in the United States in that, among others, the Company’s products gained broader name recognition, the Company has easier access to U.S. capital markets, and the Company can use securities of the Parent freely tradeable in the U.S. to attract and retain qualified personnel;

WHEREAS, Indemnitee provides several valuable management services to the Company;

WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting officers and directors to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited;

WHEREAS, Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee and other officers and directors of the Parent or any of its subsidiaries, including the Company, may not be willing to serve or continue to serve as officers and directors without additional protection; and

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to provide valuable management services to the Parent or any of its subsidiaries, including the Company, and to indemnify such individuals so as to provide them with the maximum protection permitted by law.

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

1. Certain Definitions .

(a) “Claim” shall mean any threatened, pending or completed action, proceeding or alternative dispute resolution mechanism whether civil, criminal, administrative or investigative.

(b) References to the “Company” shall include, in addition to Logitech Inc., any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which Logitech Inc. (or any of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that if Indemnitee is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director or officer of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

(c) “Expenses” shall mean any and all expenses (including attorneys’ fees, other costs and obligations), judgments, fines, penalties and amounts paid or expenses incurred in settlement or in otherwise disposing of (if, for all purposes other than Section 2(b), such settlement or other disposition is approved in advance by the Company, which approval shall not be unreasonably withheld) in each case to the extent actually and reasonably incurred in connection with investigating, defending, or participating in (including on appeal), or preparing to defend, or to participate in, any Claim regarding any Indemnifiable Event and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement. For the purposes of Section 2(b), Expenses shall include amounts paid or expenses incurred in settlement or in otherwise disposing of a Claim regarding any Indemnifiable Event only if such settlement or other disposition is court-approved.

(d) “Indemnifiable Event” shall mean any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or Parent, or any subsidiary of the Company or Parent, or is or was serving at the request of the Company or Parent as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity.

(e) References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director or officer of the Company which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or its beneficiaries.

2. Indemnification .

(a) Third Party Proceedings . The Company shall indemnify Indemnitee if Indemnitee is or was or becomes a party or is threatened to be made a party in any Claim (other than an action by or in right of the Parent or the Company) by reason of (or arising in part out of) any Indemnifiable Event against Expenses, including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, if Indemnitee acted in good

faith and in a manner Indemnitee reasonably believed to be in the best interests of Parent or the Company, as the case may be, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful. The termination of any Claim by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that (i) Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in the best interests of the Parent or the Company, as the case may be, or (ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Parent or the Company . The Company shall indemnify Indemnitee if Indemnitee was or is or becomes a party or is threatened to be made a party to any Claim by or in the right of the Parent or the Company or any subsidiary of the Parent or the Company to procure a judgment in its favor by reason of (or arising in part out of) any Idemnifiable Event against Expenses, including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the Parent or the Company, as the case may be, and its shareholders, as applicable, except that no indemnification shall be made in respect of any Claim as to which Indemnitee shall have been adjudged to be liable to the Parent or the Company, as the case may be, in the performance of Indemnitee’s duty to the Parent or the Company, as the case may be, and its shareholders, as applicable, unless and only to the extent that the court in which such Claim is or was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for Expenses and then only to the extent that the court shall determine.

(c) Mandatory Payment of Expenses . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any action or proceeding referred to in Subsections (a) and (b) of this Section 2, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith.

3. Expenses; Indemnification Procedure .

(a) Advancement of Expenses . The Company shall advance, prior to the final disposition of any Claim, all Expenses incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of any civil or criminal action or proceeding referenced in Section 2(a) or (b) hereof. Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall be ultimately determined that Indemnitee is not entitled to be indemnified b the Company as authorized hereby. The advances to be made hereunder shall be paid by the Company to Indemnitee within twenty (20) days following delivery by Indemnitee of a written request therefor and the undertaking referenced above to the Company.

(b) Notice/Cooperation by Indemnitee . Indemnitee shall, as a condition precedent to his right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the Chief Executive Officer of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.

(c) Procedure . Any indemnification provided for in Section 2 shall be made no later than forty-five (45) days after receipt of the written request of Indemnitee. If a claim under this Agreement, under any statute, or under any provision of the Company’s Articles of Incorporation or By-laws providing for indemnification, is not paid in full by the Company within forty-five (45) days after a written request for payment thereof has first been received by the Company, Indemnitee may, but need not, at any time thereafter bring an action against the Company to recover the unpaid amount of the claim and, subject to Section 14 of this Agreement, Indemnitee shall also be entitled to be paid for the Expenses of bringing such action. It shall be a defense to any such action (other than an action brought to enforce a claim for Expenses incurred in connection with any action or proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company and Indemnitee shall be entitled to receive interim payments of Expenses pursuant to Subsection 3(a) unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists. It is the parties’ intention that if the Company contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to indemnification shall be for the court to decide, and neither the failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its shareholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its shareholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct.

(d) Notice to Insurers . If, at the time of the receipt of a notice of a Claim pursuant to Section 3(b) hereof, the Company has director and officer liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.

(e) Selection of Counsel . In the event the Company shall be obligated under Section 3(a) hereof to pay the Expenses of any Claim the Company, if appropriate, shall be entitled to

assume the defense of such Claim, with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of the Company’s election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim, provided that (i) Indemnitee shall have the right to employ Indemnitee’s separate counsel in any such Claim at Indemnitee’s expense; and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall not, in fact, have employed counsel to assume the defense of such Claim, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.

4. Additional Indemnification Rights; Nonexclusivity.

(a) Scope . Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Articles of Incorporation, the Company’s By-laws or by statute. In the event of any change, after the date of this Agreement, in any applicable law, statute or rule which expands the right of a California corporation to indemnify a member of the board of directors or an officer of the Parent or the Company, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a California corporation to indemnify a member of its board of directors or an officer, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 9 hereof.

(b) Nonexclusivity . The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s Articles of Incorporation, its By-laws, any agreement, any vote of shareholders or disinterested directors, the California General Corporation Law, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding such office. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he may have ceased to serve in such capacity at the time of any action or other covered proceeding.

5. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred by Indemnitee in connection with any Claim, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

6. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying the directors and officers of the Parent or the Company under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination if the Company is right under public policy to indemnify Indemnitee.

7. Directors, and Officers’ Liability Insurance . The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Parent or the Company with coverage for losses from wrongful acts, or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of directors’ and officers’ liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Parent’s or the Company’s directors, as the case may be, if Indemnitee is a director; or of the Parent’s or the Company’s officers, as the case may be, if Indemnitee is not a director but is an officer. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Company.

8. Severability . Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

9. Exceptions . Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

(a) Excluded Acts . To indemnify Indemnitee for any acts or omissions or transactions from which a director may not be relieved of liability under applicable law; or

(b) Claims Initiated by Indemnitee . To indemnify or advance Expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any other statute, law, agreement or insurance policy or under the Company’s Articles of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise as required under Section 317 of the California General Corporation Law; or

(c) Lack of Good Faith . To indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such proceeding was not made in good faith or was frivolous; or

(d) No Duplication of Payments . To make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Company’s Articles of Incorporation, By-laws or otherwise) of the amounts otherwise indemnifiable hereunder.

Claims Under Section 16(b) . To indemnify Indemnitee for Expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

10. Contribution . If the indemnification provided for in Section 2 above for any reason is held by a court of competent jurisdiction to be unavailable to Indemnitee in respect of any Expenses and any other amount Indemnitee becomes legally obligated to pay, then the Company, in lieu of indemnifying Indemnitee thereunder, shall contribute to the amount paid or payable by Indemnitee (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and Indemnitee in connection with the action or inaction which resulted in such Expenses or any other amounts Indemnitee is legally obligated to pay, as well as any other relevant equitable considerations.

11. Effectiveness of Agreement . To the extent that the indemnification permitted under the terms of certain provisions of this Agreement exceeds the scope of the indemnification provided for in the California General Corporation Law, such provisions shall not be effective unless and until the Company’s Articles of Incorporation authorize such additional rights of indemnification. In all other respects, the balance of this Agreement shall be effective as of the date set forth on the first page and may apply to acts or omissions of Indemnitee which occurred prior to such date if Indemnitee was an officer, director, employee or other agent of the Company or the Parent, or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, at the time such act or omission occurred. In addition, all agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director, officer, employee or agent of the Company or

Parent (or is or was serving at the request of the Company or Parent as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Claim, by reason of the fact that Indemnitee was serving in the capacity referred to herein.

12. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

13. Binding Effect; Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), spouses, heirs and personal and legal representatives.

14. Attorneys’ Fees . In the event that any action is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, except for the pro-rata amount of any such Expenses relating to material assertions that, as a part of such action, the court of competent jurisdiction determines were not made in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses, including attorneys fees, incurred by Indemnitee in defense of such action (including with respect to Indemnitee’s counterclaims and cross-claims made in such action), except for the pro-rata amount of any such Expenses relating to material assertions that, as a part of such action, the court of competent jurisdiction determines were not made in good faith or were frivolous.

15. Notice . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by the party addressee, on the date of such receipt, or (ii) if mailed by domestic certified or registered mail with postage prepaid, on the third business day after the date postmarked. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice.

16. Consent to Jurisdiction . The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of California for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state courts of the State of California.

17. Choice of Law . This Agreement shall be governed by and its provisions construed in accordance with the laws of the State of California as applied to contracts between California residents entered into and to be performed entirely within California.

18. Subrogation . In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall

execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

19. Amendment and Termination . No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

20. Integration and Entire Agreement . This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.

21. No Construction as Employment Agreement . Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries or affiliated entities.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

LOGITECH, INC.

6505 Kaiser Drive

Fremont, CA 94555

By:

Name: Guerrino DeLuca

Name: Kristen Onken

Title: CEO

Title: CFO

AGREED TO AND ACCEPTED:


INDEMNITEE


(signature)

Address:

EXHIBIT 8.1

LOGITECH INTERNATIONAL S.A.

Subsidiary		Jurisdiction of Incorporation
3Dconnexion		Poland
3Dconnexion GmbH		Federal Republic of Germany
3Dconnexion Holding SA		Switzerland
3Dconnexion (U.K.) Ltd.		United Kingdom
3Dconnexion, Inc.		Delaware, USA
Labtec Europe SA		Switzerland
Labtec Inc.		Massachusetts, USA
Logi (U.K.) Ltd.		United Kingdom
Logicad 3D, Inc.		California, USA
3Dconnexion EURL		France
LogiCool Co. Ltd.		Japan
Logitech (Jersey) Ltd.		Jersey, Channel Islands
Logitech 3D Holding GmbH		Federal Republic of Germany
Logitech Australia Computer Peripherals Pty Ltd.		Commonwealth of Australia
Logitech Canada Inc.		Canada
Logitech Espana BCN SL		Spain
Logitech Europe SA		Switzerland
Logitech Far East Ltd.		Taiwan, Republic of China
Logitech France SARL		Republic of France
Logitech GmbH		Federal Republic of Germany
Logitech Hong Kong Ltd.		Hong Kong
Logitech Inc.		California, USA
Logitech Ireland Services Limited		Ireland
Logitech Italia SRL		Republic of Italy
Logitech Korea Ltd.		Korea
Logitech Malaysia		Malaysia
Logitech Nordic AB		Sweden
Logitech Northern Europe B.V.		Kingdom of the Netherlands
Logitech S.A.		Switzerland
Logitech Singapore Pte. Ltd.		Republic of Singapore
Logitech Trading (Shanghai) Co. Ltd.		People’s Republic of China
Natural Computing Inc. (Mauritius)		Republic of Mauritius
Spacetec IMC Gmbh		Federal Republic of Germany
Spotlife, Inc.		Delaware, USA
Suzhou Logitech Computing Equipment Co., Ltd.		People’s Republic of China
Suzhou Logitech Electronic Co., Ltd.		People’s Republic of China

EXHIBIT 11.1

Logitech International SA

Business Ethics Policy

May 2003

Business Ethics

1.1

Business Ethics—Compliance with Applicable Law; Public Reporting

While we must compete vigorously to achieve earnings to support long-term growth, we must at the same time do so in strict compliance with all laws and regulations applicable to our activities in every country in which we do business. An employee must take no action on Logitech’s behalf which the Employee knows or suspects violates any applicable law or regulation.

Neither the Company nor its Employees will or may assist any (other) Employee or a third party in violating the laws of any country. This policy applies even where the Company’s assistance would not itself violate the laws of such country.

The Company shall at all times provide full, fair, accurate, timely, and understandable disclosure in reports and documents that it files with, or submits to, the Swiss Exchange, the US Securities and Exchange Commission, other regulatory authorities, and in other public communications made by the Company.

Depending on their position with Logitech, Employees may be called upon to provide information to assure that the Company’s public reports are full, fair, accurate, timely and understandable. Logitech expects all of its personnel to take this responsibility very seriously and to provide prompt and accurate answers to internal inquiries related to the Company’s public disclosure requirements.

The Chief Executive Officer, the Chief Financial Officer and the General Counsel bear a special responsibility to help ensure that a culture exists throughout the Company as a whole that assures the full, fair, accurate, timely and understandable reporting of Logitech’s financial results and condition.

1.2

Business Ethics—Compliance with Foreign Tax or Currency Laws

The Company and all Employees shall obey both foreign and domestic tax laws and foreign exchange control laws. No Employee shall on the Company’s behalf enter into any transaction with agents, contractors, consultants, lawyers, distributors or other persons which the Employee knows or suspects will permit such persons to circumvent such laws. Any transaction which has the appearance of permitting any person to circumvent such laws must receive the advance approval of the General Counsel.

Particular care must be taken in respect of “split payments” (i.e., payments for services which are made outside the country in which the services are performed—unless the provider of the service is incorporated and has an established presence in the country in which the payment is made—or payments inside a country in other than the local currency). General Counsel’s advance approval shall be obtained for all split payment arrangements.

1.3

Business Ethics—Observance of Moral and Ethical Standards of Society

In addition to full compliance with all laws, each Logitech Employee must comply with the moral and ethical standards of local society in addition to accepted international standards in the conduct of Logitech’s business. It is important that each of us individually complies with these principles and that we assure that the Company is doing so.

1.4

Business Ethics—No Bribes or Illegal Payments

Logitech will not tolerate, and no Employee shall pay, offer or authorize, any bribe or any other unlawful payment on behalf of the Company. Bribery is the giving of money or anything else of value in an attempt to influence unlawfully the act or decision of a public official in his official capacity, or to induce such public official to use his/her influence to affect or influence any act or decision of such government or instrumentality to assist the Company in obtaining or retaining business. This prohibition extends to payments to consultants, agents or other intermediaries when the Employee has reason to believe that some part of the payment or “fee” will be used for a bribe or otherwise to influence government action. Any Employee with knowledge of a request for or payment of a bribe shall immediately disclose such information to the General Counsel or another member of the Legal Department.

1.5

Business Ethics—Foreign Corrupt Practices Act

As a corporation headquartered in the United States, Logitech is subject to the provisions of the U.S. Foreign Corrupt Practices Act (“FCPA”). The temptation by employees of U.S. companies to make payments to government officials is often greater overseas than in the U.S., especially where such payments are customary in the country in question and foreign competitors (not subject to the provisions of the FCPA) are making such payments. In many cases, the Employee may believe that by making similar payments, he or she is not trying to influence (bribe) a government official but merely to put the Company on an equal footing with competitors. Notwithstanding the desire to be competitive, payments to foreign government officials must be carefully controlled to assure that there is no violation of the FCPA. At Logitech, responsibility for assuring compliance with the FCPA lays with the Functional VP / Senior VP. Any questions regarding whether any particular payment violates the FCPA should be directed to the General Counsel or another member of the Legal Department.

The FCPA prohibits any payment or the giving of anything of value, or any promise to pay or give something of value, to a foreign official for the purpose of influencing him or her, or to induce such public official to use his/her influence to affect or influence any act or decision of such government or instrumentality, in obtaining/retaining business or to secure any improper advantage. Payments to independent consultants or other agents of the Company may be deemed to violate the FCPA if it appears likely that the recipient will make an unlawful payment to a foreign official. “Foreign Official” is defined broadly to include not only employees of foreign governments, but also employees of government owned or controlled businesses, agencies and political parties as well as public officials or employees of public international organizations. Because the FCPA is so complex, interpretation of whether any particular payment to a government official violates the Act should be left to the Legal Department.

To assure compliance with the FCPA, the following procedures shall apply:

(a)

No Payments and Gifts to Foreign Officials

No payment or gift of any kind shall be made to any foreign official that violates any law, regulation or decree of the country in question. Gifts of modest value, conforming to normal social amenities in the official’s country, and not intended to influence an official, may be given to foreign officials. However, any payment or gift (or the giving of anything of value) to a foreign official in excess of US$100 (US$50 in the People’s Republic of China) must receive the advance approval of the General Counsel.

(b)

Expenditures for Meals, etc. Must Not Be Extravagant

Expenditures for meals, entertainment and other normal social amenities with respect to foreign officials must not be extravagant and must conform to the laws and customs of the country in which the expenditure is incurred.

(c)

Facilitating/Expediting Payments

“Facilitating” or “expediting” payments that are lawful in the country in question and designed to expedite or secure the performance of routine governmental action (such as obtaining a phone line) by a foreign official are allowed under the FCPA. However, because of their sensitive nature, any such payments may be made only with the advance approval of the General Counsel. The exception for “facilitating payments” does not apply to any payment to a foreign official having discretionary power to award new business to the Company or to approve the continuation of existing business.

(d)

Need to Keep Accurate Records of All Payments

Complete and accurate records shall be maintained of all transactions, including transactions that relate in any way, directly or indirectly, to a foreign official.

Conflict of Interest

A conflict of interest exists when an Employee’s duty to give undivided business loyalty to the Company can be prejudiced by actual or potential personal benefit from another source. All circumstances of conflict of interest, including those specified below, should be avoided.

If an Employee has any doubt about whether an activity may be a conflict of interest, the Employee must report that activity to his or her Functional VP / Senior VP.

2.1

Conflict of Interest—Loyalty to Logitech

No Employee should be subject, or even appear to be subject, to influences, interests or relationships which conflict with the best interests of the Company. This means avoiding any activity which might compromise or seem to compromise Logitech or the Employee, or bring embarrassment to or adversely affect the reputation of Logitech or the Employee.

2.2

Conflict of Interest—No Gifts, Gratuities or Payments

(a)

Employees may not accept gifts, gratuities or payments

No Employee may accept any service, entertainment, travel, gifts or other gratuity worth more than US$100 from any individual, company or governmental authority, which either wants to or already does business with Logitech, if it could reasonably be viewed as being done to gain a business advantage. At Company sites in the People’s Republic of China, the limitation is US$50, rather than US$100.

No Employee may accept from any individual, company or governmental authority, which either wants to or already does business with Logitech, any payment or loan of money in any amount, if it could reasonably be viewed as being done to gain a business advantage.

(b)

Employees may not give gifts, gratuities or payments

No Employee may give any service, entertainment, travel, gifts or other gratuity worth more than US$100, to any individual, company or governmental authority, which either wants to or already does business with Logitech, if it could reasonably be viewed as being done to gain a business advantage. At Company sites in the People’s Republic of China, the limitation is US$50, rather than US$100.

No Employee may give to any individual, company or governmental authority, which either wants to or already does business with Logitech, any payment or loan of money in any amount, if it could reasonably be viewed as being done to gain a business advantage.

(c)

Kickbacks and Unauthorized Rebates are Prohibited

Logitech will not under any circumstances tolerate the solicitation, receipt or payment of kickbacks or unauthorized rebates.

(d)

Business Meals as an Exception

The giving or receipt of gratuities in the form of business meals, of nominal value and which conform to normal social amenities in the country in question, are excepted from the limitations of this Section 2.2.

2 . 3

Conflict of Interest—No Interests in Competitors or Certain Others

(a)

No Financial Interest in Suppliers, Customers and Competitors

No Employee may have any direct or indirect interest in any organization which is seeking or doing business with Logitech or which is a competitor of Logitech. This means for example that no Employee may be an investor or own stock in a competitor, supplier or customer of Logitech.

There are only two exceptions to this: First, when the interest consists of securities in a publicly-held company which are traded regularly in recognized security markets and the amount owned is less than 0.5% of the class of outstanding securities. Second, when the interest has been fully disclosed to the General Counsel, who has given his or her consent.

(b)

Certain Prohibited Second-Job Employment

Employees should neither accept employment with, nor act as consultants or agents for, a Logitech customer, supplier or competitor. An Employee’s personal transactions with Logitech customers, suppliers or competitors shall not involve the use of Company time, property or information, and must be on non-preferential terms and independent of any relationship with Logitech.

Employees should not become officers or members of the Board of Directors of other companies without the prior approval of the General Counsel.

Employees should not sell goods or services to Logitech (beyond the stated or implied scope of their employment) without the prior approval of his or her Functional VP / Senior VP.

(c)

Family Business

Employees should not conduct Logitech business with family members or with a business in which family members participate, without the prior approval of his or her Functional VP / Senior VP.

(d)

Business Opportunities

Employees should not take advantage of an opportunity for personal gain that rightfully belongs to Logitech. If a Logitech Employee becomes aware of a business opportunity that might fall within Logitech’s business purpose and practice, such Employee shall inform his or her Functional VP / Senior VP of such business opportunity. Employees should not sell their own services or products, or those of another person or firm, if Logitech offers similar services or products.

2 . 4

Conflict of Interest—No Personal Appropriation of Company Property

No Employee may without proper authorization use or permit others to use Logitech property or services for personal purposes or their own personal benefit. The unauthorized removal of Company material, equipment or supplies, or unauthorized use of Company property, is treated as theft.

The submission of a fraudulent expense report and the misuse of Company-issued credit and telephone cards are treated as theft. Each Employee is expected to use the same care for the Company’s property as he or she would if it were the Employee’s own property.

Employees who are authorized to charge amounts directly to the Company, using company credit cards, fuel credit cards, company provided cell phones or access cards may use such accounts for Company purposes only and must also take appropriate precautionary measures to protect such cards against loss or abuse.

2.5

Conflict of Interest—No Misappropriation of Company Information

Sensitive or confidential Company information is the property of Logitech and should not be used by Employees for personal gain. No Employee may give or make available any sensitive or confidential Company information (including but not limited to financial data, trade secrets, know-how, future plans, etc.) to any third party. Similarly, no Employee should solicit or use another party’s confidential information for personal profit or for any other improper reason. Any exception must be approved in writing by the Employee’s Functional VP / Senior VP.

No Employee may profit directly or indirectly from a stock or other securities transaction made on the basis of “material” information about Logitech or another company, obtained by the Employee in the course of Logitech business but not yet made generally known (see, Logitech’s Insider Trading Policy).

General Provisions

3.1

Employees are Prohibited from Acting Indirectly through Friends or Family

An Employee who tries to or does take actions prohibited by this Policy indirectly through a friend or family member will be subject to disciplinary action up to and including termination as if the Employee had tried to or had taken the action directly.

In determining whether an Employee acted through a friend or family member, the Company will take into account all of the facts and circumstances surrounding the action.

3.2

Violation of Policy

The Company will take immediate disciplinary action, up to and including termination, of any Employee who violates this Policy or whose relative violates this Policy. In addition, the Company reserves the right to take all appropriate legal actions in connection with contravention of this policy, including, but not limited to, the initiation of criminal prosecution.

3.3

Procedure for Enforcement

Except as otherwise stated in this Policy, the Functional VP / Senior VP shall be responsible for enforcing the Policy within his or her organization. The Legal Department is responsible for preparing guidelines for Employees.

3.4

Procedure for Clarifying or Seeking an Exception to the Policy; Waivers

An Employee who has questions regarding the interpretation of the Policy or who would like to request an exception to the Policy should submit the question or request to his or her Functional VP / Senior VP, or to the Legal Department. That person will make a decision in writing and communicate it to the Employee.

Any change to or waiver from this Policy for the Company’s CEO, CFO, Principal Accounting Officer or Controller, or persons performing similar functions, may only be made or granted by the Board of Directors of Logitech International S.A. and will be publicly disclosed by the Company.

3.5

Reporting Potential Violations

Employees must notify the Company as soon as possible if they become aware of any potential violations of this policy, the law or other Company policy or if they believe that they have been requested to engage in conduct which violates this policy, the law or other Company policy or to engage in any unethical act. Information on how and where to report a potential violation, and what steps the Company will take in response to a report, is set out below.

(a)

Reporting a Violation Concerning an Accounting or Auditing Matter or a Matter involving Payments to Government Officials

If the potential violation involves the Company’s accounting, internal accounting controls, or auditing matters, or a potential payment to a government official in violation of the U.S. Foreign Corrupt Practices Act, then you must contact the General Counsel or any member of the Legal Department. Alternatively, you may report a potential violation as follows:

•

By leaving a voice mail on the Ethics Report Hotline: 1-510-713-4440; this call may be made toll free in the US by calling 1-800-732-3054 ext. 4440

•

By sending or depositing a letter to the Ethics Report Mailbox, Logitech Inc., 6505 Kaiser Driver, Fremont CA 94555.

•

By sending an email to ethicsreport@logitech.com .

•

By sending a letter marked “Personal & Confidential” to the General Counsel, Logitech Inc., 6505 Kaiser Driver, Fremont CA 94555.

Employees are welcome to make any such reports anonymously.

(b)

Reporting a Violation Concerning Other Matters

If the potential violation involves any other matter, you should contact your Functional VP / Senior VP, or you may contact the General Counsel or any member of the Legal Department. Alternatively, you may report a potential violation through Logitech’s “Ethics Report” Hotline, Mailbox, or e-mail address, listed above, or by sending a letter marked “Personal & Confidential” to Logitech’s General Counsel at our Fremont address.

Logitech will promptly and thoroughly investigate all reported potential violations with the highest degree of confidentiality possible under the circumstances. If Logitech determines, after investigation, that a violation has occurred, then it will take the action that it believes is appropriate or that is required by law. This could include disciplinary action against or prosecution of the individuals involved. It could also result in revising policies or procedures to prevent the occurrence of future misconduct, and increasing auditing and monitoring procedures to detect any future violation. Disciplinary action will vary depending on the circumstances, but may range from counseling to termination of employment of the individuals involved.

Logitech will not engage in or tolerate retaliation against an Employee who has reported a potential violation under this policy or cooperated with an investigation into reported misconduct. However, filing a report which the Employee knows to be false is prohibited and subjects that Employee to appropriate discipline which could include termination.

Labor Practices

Logitech maintains a policy of strict adherence to all local (for all countries in which Logitech operates a business function) human rights laws. Further, Logitech holds itself and its suppliers of goods and services to a standard which prohibits the use of forced labor, child labor, and unsafe working conditions.

EXHIBIT 12.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-100854) of Logitech International S.A. of our report dated April 22, 2003 relating to the financial statements, which appears in this Form 20-F.

PricewaterhouseCoopers SA

/s/ M. Foley M. Foley		/s/ M. Perry M. Perry

Lausanne, Switzerland

May 21, 2003

EXHIBIT 12.5

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this annual report on Form 20-F of Logitech International S.A. (the “Company”) as furnished to the Securities and Exchange Commission on the date hereof (the “Report”), I, Kristen M. Onken, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By: /s/ Kristen M. Onken

Senior Vice President Finance

Chief Financial Officer

May 21, 2003

In connection with the Form 20-F of Logitech International S.A. (the “Company”) as furnished to the Securities and Exchange Commission on the date hereof (the “Report”), I, Guerrino De Luca, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By: /s/ Guerrino De Luca

Chief Executive Officer

May 21, 2003

EXHIBIT 12.6

LOGITECH INTERNATIONAL S.A.

OUR CORPORATE GOVERNANCE

As a company whose shares are traded both on the Swiss Exchange and on the Nasdaq National Market, Logitech’s commitment to corporate governance practices is guided by the legal and regulatory requirements of both Switzerland and the United States. In addition, Logitech’s internal guidelines regarding corporate governance are provided in its Articles of Incorporation, Organizational Regulations, and Board Committee Charters. The current roles of the Board and its Committees are outlined in the following pages.

This report conforms with the new Directive on Information relating to Corporate Governance published by the Swiss Exchange on July 1, 2002. If there is an item listed in the SWX Directive that is not addressed in this report, the item is either inapplicable to, or immaterial for, Logitech.

Group structure and shareholders

Logitech International SA directly or indirectly owns 100% of all Logitech subsidiaries. Principal operating subsidiaries include the following: Logitech Inc., Logitech Europe S.A., Logitech Far East Ltd., and Suzhou Logitech Electronic Co. Ltd. For a complete list of our subsidiaries refer to Exhibit 8.1. Logitech registered shares are listed on the Swiss Exchange. Logitech’s American Depositary Shares (“ADSs”) are listed on the Nasdaq National Market system. One subsidiary, Logitech (Jersey) Ltd., is the issuer of the convertible bonds, which are listed on the Swiss Exchange.

Significant shareholders

To the knowledge of the Company, the two beneficial owners holding more than 5% of the voting rights of the Company at March 31, 2003 are Daniel Borel who with his wife, Sylviane Borel, owns 6.8% and Fidelity Investments which owns 5.8% at March 31, 2003.

Cross-shareholdings

The Company has no share holdings in companies which have shareholdings in Logitech.

Capital structure

The Company’s only class of capital stock outstanding is registered shares with a par value of one Swiss Franc per share. As of March 31, 2003, our share capital was CHF 47,901,655 (approximately $33,370,000) consisting of 47,901,655 registered shares that are issued and outstanding.

In June 2002, the shareholders authorized the Board to increase the share capital of the Company by CHF 10 million through the issuance of 10 million registered shares of par value one CHF. This authorization will expire on June 27, 2004. The Board of Directors may exclude the preferential subscription right of the shareholders, in particular if these shares are issued in connection with an acquisition of or merger with another company.

The shareholders also approved an increase of 6 million shares in the conditionally authorized share capital. This increase when added to the unused conditional shares, equals 15,165,465 registered shares that may be used to cover the issuance of stock in connection with the exercise of stock options and employee stock purchase plans. In June 2001, 2,725,000 shares were conditionally authorized to cover the conversion rights associated with the issue of the convertible bond.

In June 2002, the Company repurchased 88,000 shares for $3.8 million in open market transactions under a stock buyback program. In July 2002, the Company announced a program to buy back up to CHF 75 million (approximately $52 million) of Logitech shares in a twelve-month period. In fiscal year 2003, the Company completed this buy back program with the repurchase of 1,509,000 shares for $52.4 million. In February 2003, the Board of Directors authorized the repurchase of up to CHF 75 million (approximately $55 million) of the Company’s registered shares over the next twelve months. Under this program, as of March 31, 2003, the Company has repurchased 238,000 shares for CHF 10.3 million ($7.6 million).

There are no limitations on transferability of our shares or shares held by a nominee.

Convertible Bonds

In June 2001, Logitech sold CHF 170,000,000 (US $95,625,000) aggregate principal amount of its 1% Convertible Bonds which mature in 2006. The convertible bonds were issued in denominations of CHF 5,000 at par value, with interest at 1.00% payable annually, and final redemption in June 2006 at 105%, representing a yield to maturity of 1.96%. The convertible bonds are convertible at any time into shares of Logitech registered shares at the

CG-2

conversion price of CHF 62.4 (US $46.05) per share. Early redemption is permitted at any time at the accreted redemption amount, subject to certain requirements.

The Board of Directors and its committees

The Board of Directors is elected by the shareholders and holds the ultimate decision making authority of the Company, except for those matters reserved by law or by the Company’s Articles of Incorporation to its shareholders. The Board makes resolutions through a majority vote of the members present at the meetings. In the event of a tie, the vote of the chairman will decide.

The Company’s Articles of Incorporation set the minimum number of directors at three. The Company has eight directors as of May 1, 2003. Directors are elected by the shareholders at a shareholders meeting for a term of three years. The Board has appointed executive officers to manage the day-to-day activities of the Company.

The Functioning of the Board

Logitech’s Board of Directors is responsible for supervising the management of the business and affairs of the Company. In particular, the primary functions of the Board are:

•

setting strategic direction of the Company;

•

overseeing the Company’s financial accounting, controls, planning and reporting;

•

reviewing the performance of the Chief Executive Officer and other executive officers of the Company;

•

ensuring that the Company remains in compliance with applicable laws, the Articles of Incorporation and guidance from the Board;

•

defining the organizational structure;

•

approving the annual report, the financial statements, the consolidated financial statements and the proposal to the shareholders for the appropriation of available earnings;

•

approving the agenda for the shareholders’ meeting and convenes the meeting;

•

appointing and dismissing the Chief Executive Officer and the members of the management team and assigning their signatory power;

•

making resolutions regarding the payment of non fully paid-in shares; and

•

informing the judge in case of insolvency of the Company.

The Chairman sets the agenda for Board meetings. Any member of the Board may request that a meeting of the Board be convened. The Directors receive materials in advance of Board meetings allowing them to prepare for the handling of the items on the agenda. The Chairman and Chief Executive Officer recommends members of senior management who, at the invitation of the Board, attend Board meetings to report on areas of the business within their responsibility, thereby ensuring that the Board has sufficient information to make appropriate decisions.

The following table sets forth certain information concerning our Board of Directors:

Name	Age	Position	Nationality	Year First Appointed	Year Current Term Expires
Daniel Borel	53	Chairman of the Board	Swiss	1988	Annual General Meeting 2004
Guerrino De Luca	50	President and Chief Executive Officer, Director	Italian	1998	Annual General Meeting 2004
Frank Gill(2)(3)	59	Director	American	1999	Annual General Meeting 2005
Kee-Lock Chua(1)(3)	42	Director	Singaporean	2000	Annual General Meeting 2003
Ron Croen(2)	49	Director	American	2001	Annual General Meeting 2004
Peter Pfluger(3)	49	Director	Swiss	2001	Annual General Meeting 2004
Michael Moone(2)	56	Director	American	2002	Annual General Meeting 2005
Gary Bengier(3)	48	Director	American	2002	Annual General Meeting 2005

(1)

Mr. Chua is being presented for re-election to the Board of Directors in June 2003.

(2)

Member of the Compensation Committee.

(3)

Member of the Audit Committee.

There are no agreements providing for the payment of any consideration to any non-executive Board member upon termination of his services with the Company.

CG-3

Each Board Member is elected for a term of 3 years and is re-eligible for election until his seventieth birthday. Board members may not seek reelection after they have reached 70 years of age, unless the Board of Directors adopts a resolution to the contrary. The retirement is effective on the date of the next general meeting of shareholders.

Board Committees

The Board has standing Audit, Compensation and Board Compensation Committees to assist the Board in carrying out its duties. In April 2003, the Board approved the creation of a Nominating Committee for which membership will be determined at the June 2003 Board meeting. Each of these committees has a written charter approved by the Board. Their chairs determine the meeting agendas of the Board Committees. The Board Committee members receive materials in advance of Committee meetings allowing them to prepare for the meeting.

During fiscal 2003, the Board met four times, the Audit Committee met six times, the Compensation Committee met two times and the Board Compensation Committee met one time. Attendance information at these meetings is as follows:

	Full Board	Audit Committee	Compensation Committee	Board Compensation Committee
Daniel Borel	4	n/a	n/a	1
Guerrino De Luca	4	n/a	n/a	1
Frank Gill	4	6	2	n/a
Kee-Lock Chua	4	6	n/a	n/a
Ron Croen	4	n/a	2	n/a
Peter Pfluger	4	5	n/a	n/a
Michael Moone(1)	1	n/a	0	n/a
Gary Bengier(1)	2	3	n/a	n/a

(1)

Mr. Moone and Mr. Bengier have been Board members since June 27, 2002. From that date through March 31, 2003, there were two Board meetings, one Compensation Committee meeting, and four Audit Committee meetings.

Audit Committee

The Audit Committee assists the Board in monitoring the Company’s financial accounting, controls, planning and reporting. Among its duties, the Audit Committee:

•

reviews the adequacy of the Company’s internal controls;

•

reviews the independence, fee arrangements, audit scope, and performance of the Company’s independent auditors, and recommends the appointment or replacement of independent auditors to the Board of Directors;

•

reviews and approves all non-audit work to be performed by the auditors;

•

reviews the scope of our internal auditing and the adequacy of the organizational structure and qualifications of the internal auditing staff;

•

reviews, before release, the quarterly results and interim financial data; and

•

reviews, before release, the audited financial statements and Operating And Financial Review And Prospects contained in the Company’s Annual Report on Form 20-F, and recommends that the board of directors submit these items to the shareholders’ meeting for approval.

In fiscal 2003, the Audit Committee was composed of Frank Gill, Chairman, Kee-Lock Chua, Peter Pfluger, and Gary Bengier. The Board has determined that each member of the audit committee meets the independence requirements of the Nasdaq National Market listing standards and the applicable rules and regulations of the SEC. In addition, the Board has determined that Frank Gill and Gary Bengier are audit committee financial experts as defined by the applicable rules and regulations of the SEC.

Compensation Committee

The Compensation Committee reviews and recommends to the Board for approval the compensation of Company officers. The Compensation Committee also has the authority to grant options to employees without further Board approval. In fiscal 2003, the Compensation Committee consisted of Ronald Croen, Frank Gill and Michael Moone who each meet the independence requirements of the Nasdaq National Market listing standards. In addition to its regular meetings, the Committee each month considers for approval option grants to Company employees by written consent.

CG-4

Board Compensation Committee

A committee of the Board exists to determine the compensation of the members of the Board. This committee consists of Daniel Borel, the Chairman of the Board, and Guerrino De Luca, the Company’s President and Chief Executive Officer.

Nominating Committee

This newly created committee will be composed of at least three members with the Chairman of the Board chairing this committee. Among its duties, the Nominating Committee will:

•

evaluate the composition of the Board and its committees, determine future requirements and make recommendations to the Board for approval;

•

determine on an annual basis the desired Board qualifications and expertise and conduct searches for potential Board members with these attributes;

•

evaluate and make recommendations of nominees for election to the Board; and

•

evaluate and make recommendations to the Board concerning the appointment of directors to Board committees and the selection of Board committee chairs.

Members of the Board

Daniel Borel , a founder of the Company, has been the Chairman of the Board since May 1988. From July 1992 to February 1998, Mr. Borel also served as Chief Executive Officer of the Company. He has held various other executive positions with the Company and its predecessors since their founding. Mr. Borel has been an employee of the Company since it’s founding. Mr. Borel also serves as a director of Phonak Hearing Systems, S.A., a hearing aid device company and Bank Julius Baer, a Swiss bank. Mr. Borel holds an M.S. degree in Computer Science from Stanford University and a degree in Physics from the Ecole Polytechnique Fédérale, Lausanne, Switzerland.

Guerrino De Luca joined the Company as President and Chief Executive Officer in February 1998, and became a member of the Board of Directors in June 1998. Prior to that time, Mr. De Luca served as Executive Vice President of Worldwide Marketing for Apple Computer, Inc., a personal computer company, from February 1997 to September 1997, and as President of Claris Corporation, a personal computing software vendor, from February 1995 to February 1997. Prior to this, Mr. De Luca held various positions with Apple in the United States and Europe. Mr. De Luca holds a B.S. degree in Electronic Engineering from the University of Rome, Italy.

Frank Gill has been a director since June 1999. Mr. Gill served in a variety of positions in sales and marketing, product development and manufacturing operations at Intel Corporation from 1975 until his retirement in June 1998, including Executive Vice President in 1996, General Manager of the Internet and Communications Group from 1995 and from 1990 through 1994, General Manager of Intel’s Systems Group. He currently serves on the Boards of Tektronix Inc, ITXC Corporation and Pixelworks Inc. Mr. Gill holds a B.S. degree in Electrical Engineering from the University of California, Davis.

Kee-Lock Chua has been a director since June 2000. Mr. Chua joined NatSteel Ltd. as Deputy President in June 2001. From October 2000 until June 2001, Mr. Chua was the president and C.E.O. of Intraco. Prior to joining Intraco, Mr. Chua was the president of MediaRing.com. Mr. Chua was appointed as a Director of MediaRing.com in October 1997. Prior to joining MediaRing.com, Mr. Chua was employed by NatSteel Ltd., most recently as Executive Vice President, responsible for the commercial group, production planning, strategic planning and several overseas operations. Prior to joining NatSteel Ltd., Mr. Chua worked for Transpac Capital, where he served as Vice President, in charge of direct investments into companies in the United States. Mr. Chua holds a BS degree in Mechanical Engineering from the University of Wisconsin, and a M.S. degree from Stanford University.

Ronald Croen has been a director since June 2001. Mr. Croen, a co-founder of Nuance Communications Inc., served as the President of Nuance from July 1994 to April 2003, as its Chief Executive Officer from October 1995 to April 2003, as one of its directors since October 1995, and as Chairman of the Board since July 2002. From 1993 to 1994, Mr. Croen served as a consultant to SRI International. From 1989 to 1993, Mr. Croen was an independent management consultant in Paris, France. Prior to this, Mr. Croen served in various positions at The Ultimate Corp., including Managing Director of European Operations and Vice President and General Counsel. Mr. Croen holds a J.D. degree from the University of Pennsylvania Law School and a B.A. from Tufts University.

Peter Pfluger has been a director since June 2001. Since autumn of 2002, Mr. Pfluger is serving as the Chief Executive Officer of two late stage electronic device startup companies. From April 2000 to April 2002, Mr. Pfluger served as Chief Executive Officer and Head of the Group Executive Management of the Phonak Group. He also served as Chief Operating Officer of Phonak, since 1997. Before joining Phonak, Mr. Pfluger was Managing Director of Centre Suisse d’Electronique et de Microtechnique, Neuchatel. Before joining the Centre Suisse, he was involved in various research activities, most notably IBM Research Laboratory in San Jose, California. Mr. Pfluger has a Master degree from the Swiss Federal Institute of Technology and a Ph.D. in Natural Science from Basle

CG-5

University. Mr. Pfluger is active within the Commission for Technology and Innovation (CTI) of the Swiss Ministry of Public Economy.

Michael J. Moone has been a director since June 2002. Since March 2002, Mr. Moone has served as the President, Chief Executive Officer and a member of the Board of Directors of Alloptic, Inc. In addition, since February 2002, Mr. Moone has served as Vice Chairman of Pico Communications. From January 2001 until January 2002, Mr. Moone served as Chief Operating Officer of Harmonic, Inc. From January 2000 to January 2001, Mr. Moone was Group Vice President and General Manager of the Consumer Line of Business at Cisco Systems, Inc. From March 1999, Mr. Moone served as President, Chief Executive Officer and a member of the Board of Directors of V-Bits Inc., until its acquisition by Cisco Systems in December 1999. From June 1996 until October 1998, Mr. Moone served as President, Chief Executive Officer and member of the Board of Director of Faroudja Laboratories, Inc. Prior to this time, Mr. Moone held various executive management positions at HealthRider, Merchantec, Atari and Milton Bradley. Mr. Moone holds a B.A. degree from Xavier University.

Gary F. Bengier has been a director since June 2002. Currently retired, Mr. Bengier served as Senior Vice President, Strategic Planning and Development of eBay Inc. from January 2001 until November 2001, and prior to that, as eBay’s Vice President and Chief Financial Officer from November 1997 to January 2001. From February 1997 to October 1997, Mr. Bengier was Vice President and Chief Financial Officer of Vxtreme, Inc. a developer of internet video streaming products. Prior to that time, Mr. Bengier was Corporate Controller at Compass Design Automation, a publisher of electronic circuit design software, from February 1993 to February 1997. Mr. Bengier has also held senior financial positions at Kenetech Corp., Qume Corp., and Bio-Rad Laboratories, and spent several years as a management consultant for Touche Ross & Co. Mr. Bengier holds a BBA degree in Computer Science and Operations Research from Kent State University and an MBA from the Harvard Business School.

Cross Involvement

The Chairman of our Board, Daniel Borel, is a member of the Board of Phonak Hearing Systems which our Board Member, Peter Pfluger, served as an executive officer from 1997 to April 2002.

Senior Management

The executive officers of the Company as of March 31, 2003 are as follows :

Name	Age	Nationality	Position
Daniel Borel	53	Swiss	Chairman of the Board
Guerrino De Luca	50	Italian	President and Chief Executive Officer, Director
Erh-Hsun Chang	53	Taiwanese	Sr. Vice President, Operations and General Manager, Far East
Wolfgang Hausen	60	American	President and Chief Executive Officer, 3Dconnexion
David Henry	46	American	Sr. Vice President, Control Devices
Junien Labrousse	45	French	Sr. Vice President, Video
Kristen Onken	53	American	Sr. Vice President, Finance, and Chief Financial Officer
Marcel Stolk	35	Dutch	Sr. Vice President, Worldwide Sales and Marketing
Robert Wick	40	American	Sr. Vice President, Audio and Interactive Entertainment

Erh-Hsun Chang joined the Company as Vice President, General Manager, Far Eastern Area and Worldwide Operations in December 1995. In April 1997, Mr. Chang was named Senior Vice President, General Manager, Far Eastern Area and Worldwide Operations. During 1986 and 1987, Mr. Chang held various other positions with the Company. From January 1994 to December 1995, Mr. Chang was Vice President, Sales and Marketing, Power Supply Division, of Taiwan Liton Electronics Ltd., and from December 1991 to January 1994, Mr. Chang was Vice President, Manufacturing Consulting at KPMG Peat Marwick. Mr. Chang holds a B.S. degree in Civil Engineering from Chung Yuang University, Taiwan, an M.B.A. from the University of Dallas, and an MS in Industrial Engineering from Texas A&M University.

Wolfgang Hausen assumed the role of President and Chief Executive Officer of 3Dconnexion in June 2001. Before that, Mr. Hausen was Senior Vice President and General Manager, Control Devices Business Division of the Company since 1997. Prior to that time, Mr. Hausen served as President and Chief Executive Officer of Cardinal Technologies, Inc., a PC multimedia and modem company from May 1994. From March 1989 to December 1993, Mr. Hausen was Vice President and General Manager of Quantum Corporation, a global supplier of storage products. Mr. Hausen holds an M.S.E.E. from the Technical University of Darmstadt, Germany and an MBA from Santa Clara University, California.

CG-6

David Henry joined the company as Senior Vice President, Control Devices Business Division of the Company in August 2001. Prior to that time, Mr. Henry served as Vice President of Product Management and Business Development of Xigo Inc. from January 2000. From October 1997 to January 2000, Mr. Henry was Vice President and General Manager of Magnetic Products with Iomega. Mr. Henry holds a B.S.M.E. from Union College of Schenectady, New York.

Junien Labrousse joined the Company as Vice President, Video Division in 1997. He was named Senior Vice President, Video Division in April 2001. Prior to joining Logitech, he was Vice President of Engineering from 1995 at Winnov LP, a company engaged in the development and marketing of multimedia products. For over 10 years he held several engineering and management positions at Philips Electronics, NV in research and in the semiconductor business division. Mr. Labrousse holds a M.S.E.E. degree from the Ecole Superieure d’Ingenieurs de Marseille, France and an M.B.A. from Santa Clara University, California.

Kristen Onken joined the Company as Senior Vice President, Finance, and Chief Financial Officer in February 1999. From September 1996 to February 1999, Ms. Onken served as Vice President of Finance at Fujitsu PC Corporation. From 1991 to September 1996, Ms. Onken was employed by Sun Microsystems, Inc. first as Controller of the Southwest Area; then from 1992 to 1996 she served as Director of Finance, Sun Professional Services. Ms. Onken holds a B.S. degree from Southern Illinois University and an MBA in Finance from the University of Chicago, Illinois.

Marcel Stolk assumed the responsibility of Senior Vice President, Worldwide Sales and Marketing in March 2001. Mr. Stolk has been with the Company for over 10 years and has held a number of positions within the sales and marketing functions, the latest of which was Vice President, Retail Sales and Marketing, Europe. From January 1997 to April 1997, Mr. Stolk was Director of Marketing, Europe. Before that, he served as Director of the Northern European Region. Before joining Logitech, Mr. Stolk held various sales and marketing positions at Aashima Technology in Holland.

Robert Wick joined Logitech with the acquisition of Labtec Inc. as Vice President of the Audio business unit in March 2001. He was named Senior Vice President in April 2001, and in October 2002, he was named Senior Vice President of the Audio and Interactive Entertainment business units. Prior to joining Logitech, Mr. Wick was President of Labtec Inc. since December 1998, and assumed the CEO position in August 1999. Prior to joining Labtec, Mr. Wick spent eight years at Weiser Lock, a division of Masco Corporation, in various management positions including Vice President of Finance and Logistics. Mr. Wick holds a B.S. degree in Accounting from the University of Arizona and is a Certified Public Accountant.

Indemnification of Officers and Directors

Logitech has entered into indemnification agreements with its directors and officers. These agreements indemnify directors and officers to the extent permitted by law against expenses and liabilities incurred in legal proceedings which may arise by reason of their status or service as directors or officers. We believe that these agreements are necessary to attract and retain qualified directors and officers. At present, there is no pending litigation or proceeding involving any director or officer of the Company as to which indemnification will be required or permitted. The Company is not aware of any threatened litigation or proceeding that might result in a claim for indemnification.

Logitech currently maintains director and officer liability insurance to insure its directors and officers against certain liabilities arising from their status or service as directors or officers.

Compensation

Logitech’s General Compensation Policy

Logitech has designed its compensation programs to attract, develop, retain and motivate the high caliber of executives, managers and staff that is critical to the long-term success of its business. The Company’s compensation package is composed of a base salary that is competitive to comparable companies in the industry and region, quarterly and annual cash incentive awards that are based on company performance, and long-term incentive awards that are comprised of stock options.

Equity Compensation Plans

Logitech believes equity compensation is an important part of attracting and retaining high-caliber employees and aligning the interests of management and the directors of the Company with the interests of the shareholders. Accordingly, Logitech maintains stock purchase and stock option plans for its employees.

Under the 1996 Employee Share Purchase Plan, eligible employees may purchase registered shares with up to 10% of their earnings at the lower of 85% of the fair market value at the beginning or the end of each six-month offering period. Subject to continued participation in these plans, purchase agreements are automatically exercised at the end of each offering period.

CG-7

The Company also maintains one other option plan, for a small number of Asian executives, under which options were granted at exercise prices discounted from fair market value of the registered shares on the date of grant. No further stock options may be granted under this plan.

As of March 31, 2003, there were a total of 7,737,136 registered shares subject to outstanding options granted under all plans. Of these options, 3,612,857 were exercisable, with the balance subject to continued vesting over time.

Share and Option Ownership of Management

The following table presents information as of March 31, 2003 regarding the share and option ownership of our registered shares, including shares represented by American Depositary Receipts, by our non-employee directors and executive officers as a group:

Name	Shares Owned	% of Outstanding (1)		Options Held (2)	Exercise Price per share	Expiration Year
All non-employee directors as a group (6 individuals)	9,300	0.02	%	150,000	$7.19 to $45.41	2009 - 2012

All executive officers as a group (9 individuals) (3)	3,344,091	6.98	%	2,428,226	$4.85 to $39.55	2008 - 2013

(1)

Percentage ownership is calculated based on 47,901,655 registered shares outstanding as of March 31, 2003.

(2)

Options for shares were granted under stock option plans to purchase registered shares, including shares represented by ADSs. Exercise prices per registered share are generally equal to the fair market value of registered shares on the date of grant. Options for employees generally vest over four years with options for non-employee directors vesting over three years. Options remain outstanding for periods not exceeding ten years.

(3)

Includes 125,400 registered shares registered in the name of Sylviane Borel (Mr. Borel’s wife). Mr. Borel disclaims beneficial ownership of the registered shares registered in the name of his wife. Includes 1,675 shares owned and 1,316,140 options held by Mr. De Luca.

Compensation of Directors and Management

Each non-employee director receives options for 20,000 of the Company’s registered shares on his election to the Board and options for 10,000 shares upon his reelection to the Board. These options are granted at the fair market value at the date of grant and become exercisable over 3 years in equal annual increments. In addition, non-employee directors are paid an annual retainer of $20,000, and receive $1,500 for each board or committee meeting attended. All directors are reimbursed for expenses in connection with attendance at Board and Committee meetings.

Directors who are also employees of the Company do not receive any compensation for their service on the Board of Directors.

The following table sets forth the compensation we paid to non-employee directors and executive officers in all capacities for the year ended March 31, 2003. The options granted and exercise prices in the table below are expressed as registered shares.

CG-8

	Compensation		Options Granted(1)	Exercise Price	Expiration Year	Share Option Value(2)	Other(3)
Name of Group	Salary	Bonus	Options Granted(1)	Exercise Price	Expiration Year	Share Option Value(2)	Other(3)
	(In thousands of U.S. Dollars, except share and per share amounts)
All non-employee directors as a group (6 individuals)(4)	$99	$ —	40,000	$45.41	2012	$911	$—

All executive officers as a group (9 individuals)	$2,396	$1,701	365,000	$27.09 to $30.26	2013	$4,997	$62

This represents 23% of the options granted by the Company in fiscal year 2003. The remainder of the stock options were granted to 490 of our other employees.

The share options granted provide the right to purchase one share per option. For executive officers, the options vest ratably over a four year period after the date of grant. For non-employee directors, the options vest ratably over a three year period after the date of grant. These share options have an estimated value of $22.78 for non-employee directors and $13.69 for all executive officers, based on the Black-Scholes method. These numbers are not estimates of our future stock price performance and are not necessarily indicative of our future stock performance. If the price of Logitech’s common stock does not increase above the exercise price, no value will be realizable from these options.

Amounts shown represent matching contributions under the Company’s 401K plan and the Company’s contributions under its foreign pension plan.

Two new directors were elected by the shareholders in June 2002. All Board Members receive their cash compensation at the time of the Annual General Assembly, which is held in June following the fiscal year ended. The two new members will receive their initial compensation in June 2003.

Highest Total Compensation

In fiscal year 2003, Guerrino De Luca, the Company’s President and CEO, as the Board member with the highest total compensation, received $1,013,958 as salary, bonus and other benefits including 401(k) matching contribution. In addition, he was granted 200,000 options with an option value estimated to be $2,738,000 using the Black-Scholes method.

Compensation to Former Directors and Officers

In fiscal year 2003, the terms of two former non-executive members of the Board expired as of the date of the Annual General Assembly. They did not receive any special compensation upon the end of their term. In fiscal year 2003, one former executive officer of the Company received compensation of $359,091, which included salary, bonus and severance.

Additional Fees and Loans

No additional fees and/ or compensation has been paid during fiscal year 2003 to any member of the Board or senior management other than as noted above. In addition, none of them had any outstanding loans at March 31, 2003.

Conflicts of Interest

The Company believes that no director or officer benefits from any contract between Logitech and a third party.

Shareholders’ Rights

Each registered share entitles the holder to one vote at the General Assembly. There are no preferential voting rights. All shareholders have preferential subscription rights, allowing them the right of first refusal for future share issuances unless the shareholders have voted that these rights will not apply.

The Company notifies shareholders of record 20 days prior to the General Assembly. The shareholder register is closed 10 days prior to the General Assembly, and shareholders registered at this time may vote their shares at the meeting. Resolutions at the general meeting are generally approved by a simple majority of the votes cast.

A request to place an item on the General Assembly agenda must be requested in writing and be received by the board of directors at least sixty days prior to date of the General Assembly. A shareholder must hold shares representing a total par value of one million francs in order to be eligible to place an item on the agenda.

CG-9

Change of Control Provisions

Swiss law requires that any shareholder who acquires more than 33 1/3 percent of the voting rights of a listed company is required to make an offer to acquire all listed securities of the company that are listed for trading on the Swiss Exchange. Logitech has not waived or otherwise changed these rules.

Our executive officers generally have Change of Control Severance Agreements with Logitech. Under the terms of these agreements, if the executive officer’s employment is involuntarily terminated or the employee is demoted within twelve months (eighteen months for one individual) after a change in control of Logitech, the executive would receive his or her base salary, annual and quarterly bonuses, and payment of health benefits for up to a year following the termination, as well as 100% vesting of all unvested stock options. In the case of a demotion, the executive officer would be required to remain employed for a period of time (generally 12 months) in order to receive these benefits.

Auditors

PricewaterhouseCoopers S.A.(PwC) assumed the existing auditing mandate for Logitech in 1988. Each year at the Genera1 Assembly, the shareholders approve the renewal of the auditors for a one-year term. PwC was reappointed as the worldwide auditors of the Company in June 2002. Since fiscal year 2000, the responsible principal auditor has been Michael Foley.

In addition to the audit services they provide with respect to our annual audited consolidated financial statements and other filings with the Securities and Exchange Commission, PwC has provided non-audit services to us in the past and may provide them in the future. Non-audit services are services other than those provided in connection with an audit or a review of the financial statements of the Company. The Company’s audit committee pre-approves all audit and non-audit services provided by our audit firm. This pre-approval must occur before the auditor is engaged. Audit services can be approved no more than six months in advance of the services being performed. Services that last longer than a year must be reapproved by the audit committee.

Our audit committee can delegate the pre-approval ability to a single independent member of the audit committee. The delegate must communicate all services approved at the next scheduled audit committee meeting. The audit committee or its delegate can pre-approve types of services to be performed by the auditors with a set dollar limit per the type of service. The Chief Financial Officer is responsible for ensuring that the work performed is within the scope and dollar limit as approved by the audit committee. Management must report to the audit committee the status of each project or service provided by the auditors.

During fiscal year 2003, PwC performed the following non-audit services that were approved by the audit committee: Tax planning and compliance advice, advising on potential acquisitions and other transactions, reviewing the application of generally accepted accounting principles, consultations regarding implementation of various provisions of the Sarbanes-Oxley Act and providing statutory audit services in foreign jurisdictions.

The following table presents the aggregate fees for professional audit services and other services rendered by PricewaterhouseCoopers to Logitech in fiscal year 2003 and 2002.

	2003		2002
Audit fees(1)	$	615,600	$	530,000
Audit-related fees		1,700		51,000
Tax fees		452,000		585,000
All Other Fees(2)		57,000		637,000

Total	$	1,126,300	$	1,803,000

(1)

Audit fees represent those fees incurred for the indicated fiscal year, regardless of when they were paid. Audit fees include both group and statutory audit fees.

(2)

Included within “All Other Fees” in 2003 are services provided implementing the various provisions of the Sarbanes-Oxley Act, and in 2002 are services provided in connection with the due diligence, audit and SEC filings of the Labtec acquisition, the issuance of our convertible bonds, and the due diligence, audit, resolution of tax and accounting issues for the 3Dconnexion acquisition.

CG-10

Information Policy

The Company reports to the United States Securities and Exchange Commission (SEC) on a regular basis. The reports submitted to the SEC may be downloaded from http://www.sec.gov .

Copies of the quarterly and annual SEC files as well as press releases are available to download from our website at www.logitech.com. For no charge, a copy of the Company’s filings can be requested via the following address or phone number:

Logitech Inc. Investor Relations

Corporate Headquarters:

6505 Kaiser Drive

Fremont, CA 94555 USA

+1-510-795-8500 Main

CG-11