Annual Report 2018

Notes to the consolidated financial statements

Information on the report

About this report

The Conzzeta consolidated financial statements for 2018 have been revised to enhance readability. The aim was to ensure that it is possible to quickly find related information. The notes to the consolidated financial statements have been organized based on their relevance and importance. This new structure provides a clearer overview of financial performance. The notes now include also key assumptions and estimates made by the management, as well as the accounting principles. In addition, financial risk management with the corresponding key risk factors is described in a new section.

General information

The consolidated financial statements comprise the separate financial statements of the Group companies of Conzzeta AG at December 31, prepared in accordance with uniform guidelines and in compliance with Swiss GAAP FER and Swiss law. With the exception of derivative financial instruments, which are measured at fair value, the consolidated financial statements are based on historical costs. The same accounting and valuation principles have been used as in the previous year. The principle of individual valuation has been applied to assets and liabilities.

Scope and method of consolidation

The consolidated financial statements include the financial statements of Conzzeta AG and of all companies directly or indirectly controlled by Conzzeta AG, through investments with more than 50% of the votes or by another means, and uniformly managed. These investments are fully consolidated. The share of the minority shareholders in the net assets and net result is disclosed separately. Investments with 50% of the voting rights are consolidated on a pro rata basis in accordance with the share in the capital. Intragroup receivables and payables as well as expenses and income are offset against each other, and intragroup profits have been eliminated. The assets and liabilities of companies included in consolidation for the first time are measured at fair value. Goodwill arising from this revaluation is offset against equity. In the event of disparties when the final purchase price is settled in a period later than the reporting period, the goodwill offset in equity is adjusted accordingly. First-time consolidations are included from the date on which control is acquired; deconsolidations from the date on which control is lost. Investments in associates (at least 20%, but less than 50% of the voting rights) are accounted for under the equity method. Securities held as fixed assets are valued at acquisition cost, less any necessary value adjustments.

Currency translation

The consolidated financial statements of Conzzeta AG are presented in Swiss francs (CHF). The financial statements of foreign companies are prepared in their respective functional currencies and translated into Swiss francs for consolidation purposes. The resulting currency effects are recognized directly in equity. Foreign currency gains and losses on long-term, equity-like loans to Group companies are also recorded directly in equity. Following the sale or liquidation of companies, these effects are recycled through the income statement. All gains and losses resulting from foreign currency transactions and adjustments to foreign currency balances at the balance sheet date are recognized in the income statement.

Significant estimates made by management

In preparing the Group financial statements, certain assumptions must be made which affect the accounting basis to be used and the amounts reported as assets, liabilities, income and expenses and the presentation of these amounts. The assumptions are set out in the following notes:

Definition of non-Swiss GAAP FER key figures

Where relevant for the reader, Conzzeta has included specific subtotals, which can be found directly in the relevant table. Conzzeta also uses the key figures operating free cash flow, net operating assets/return on net operating assets (RONOA) and comparable net revenue in its external financial communication. Further details can be found in notes 1.2 and 2.

Events after the balance sheet date

The consolidated financial statements were approved for publication by the Board of Directors on Friday, March 15, 2019. They are also subject to approval by the Annual General Meeting.

On January 25, 2019, Conzzeta reported signing a binding agreement to sell its Glass Processing segment to Finnish company Glaston Corporation, based in Helsinki. The transaction is expected to be concluded by the end of the first quarter, subject to regulatory approval.

1. Performance Cash Flow Statement

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