Notes to the financial statements – Conzzeta AG

Principles

General

The financial statements 2020 of Conzzeta AG have been prepared in accordance with the provisions of the Swiss Code of Obligations. The significant valuation policies applied, over and above those required by law, are described in the following.

The financial statements were approved for publication by the Board of Directors on Friday, March 12, 2021. They are also subject to approval by the Annual General Meeting.

Financial assets

The financial investments comprise securities held as a long-term investment. Loans granted in foreign currencies are valued at year-end exchange rates.

Derivative financial instruments

Currency hedges are used against currency risks arising from business operations. All outstanding derivatives are recognized at market value on the balance sheet date and shown at gross values under other receivables or other short-term liabilities. Changes in the value of derivatives used to hedge recognized underlying transactions are reported in the income statement, as is the underlying transaction.

Interest-bearing liabilities

Interest-bearing liabilities are shown at par value.

Treasury shares

Treasury shares are recognized at cost at the time of acquisition. The holding of treasury shares is disclosed as a negative item in equity. Upon resale, the profit or loss is allocated directly to the capital reserves.

Share-based compensation

Share-based compensation for members of the Board of Directors is measured at cost at the grant date and charged to personnel expenses in the period in which the service is rendered.

Information on the income statement and balance sheet items

Income

The dividend payments by the subsidiaries were determined in relation to available retained earnings and capital requirements. The sale of Schmid Rhyner AG resulted in a gain from the sale of equity holdings of CHF 51.6 million. The financial income includes the interest income on accounts receivable from equity holdings of CHF 7.8 million (2019: CHF 7.5 million). In 2019, this item included interest income from third parties in the amount of CHF 0.1 million.

Expenses

Financial expenses are the result of interest on liabilities towards equity holdings of CHF 0.2 million (2019: CHF 0.4 million), the cost of currency hedging (interest rate differences) for balance sheet items in foreign currencies of CHF 3.9 million (2019: CHF 3.6 million), currency losses on liquid assets and on accounts receivable from equity holdings of CHF 0.2 million (2019: CHF 0.2 million) and commitment fees for bank loans of CHF 0.3 million. In 2019, this item included interest on short-term bank loans of CHF 0.1 million. Personnel and other operating expenses include current administration expenses, the cost of organizing the Annual General Meeting, the production of the annual report, project costs, taxes on capital, as well as fees to the Board of Directors.

Current assets

Liquid assets consist of current account bank balances, the majority of which are in Swiss francs. Other accounts receivable due from third parties include recoverable input tax and withholding tax of CHF 0.4 million (2019: CHF 0.4 million) and a balance of CHF 5.7 million (2019: CHF 5.6 million) from exchange rate hedges due from banks. Other accounts receivable due from equity holdings include balances from foreign exchange hedging transactions  of CHF 0.4 million (2019: CHF 0.9 million). In 2019, this item also included other accounts receivable from equity holdings of CHF 0.3 million.

Fixed assets

The financial investments comprise securities held as a long-term investment. In the year under review, accounts receivable from equity holdings grew by CHF 81.7 million. Equity holdings fell by CHF 13.2 million due to the sale of Schmid Rhyner AG.

Liabilities

Other payables include mainly debts of CHF 2.6 million (2019: CHF 2.1 million) resulting from exchange rate hedges owed to banks, debts of CHF 3.0 million (2019: CHF 2.0 million) resulting from exchange rate hedges against equity holdings, and trade payables of CHF 0.1 million (2019: CHF 0.4 million).

Shareholdersʼ equity

The share capital of CHF 4.1 million (2019: CHF 4.1 million) is divided into 1,827,000 class A registered shares and 1,215,000 class B registered shares. At the end of 2019, 4,187 class A registered shares acquired at an average purchase price of CHF 941 each were held. In the reporting year, 116 class A registered shares were acquired at an average transaction price of CHF 1,162 each for the share-based compensation program. The Board of Directors received 589 class A registered shares at an average transaction price of CHF 861 each. A total of 1,785 class A registered shares were sold to Group companies at an average transaction price of CHF 920 each for allocation to members of the Executive Committee and other members of the management team. In each case, the transaction price corresponded to the market value. The holding as of December 31, 2020, was 1,929 class A registered shares acquired at an average purchase price of CHF 1,089 each.

Further information

Full-time positions

Conzzeta AG has no employees.

Contingent liabilities

Equity holdings

See note 4.2 to the consolidated financial statements for details of equity holdings. The voting shares correspond to the capital shares.

Significant shareholders

The Auer, Schmidheiny and Spoerry shareholder group comprises Dr. Matthias Auer, Ruth Byland-Auer, Martin Byland, Caliza Holding AG, Marina Marti-Auer, Marina Milz, Adrian and Annemarie Herzig-Büchler, Sven and Rosmarie Mumenthaler-Sigrist, Jacob Schmidheiny, Margrit Schmidheiny, Felix Schmidheiny, Helen Schmidheiny, Kathrin Spoerry, Christina Spoerry, Heinrich Spoerry-Niggli, Lotti Spoerry and Robert F. Spoerry.

Shareholdings held by members of the Board of Directors, Executive Committee and related persons

M. Auer, J. Schmidheiny and R. F. Spoerry hold further registered shares under a shareholder agreement within the Auer, Schmidheiny and Spoerry shareholder group.

Compensation paid to members of the Board of Directors and Executive Committee is shown in the Compensation Report.

Share-based compensation

The base compensation for members of the Board of Directors is paid in cash and shares (approx. 50% each) that are subject to a four-year vesting period. Neither discounts nor performance components are taken into consideration when calculating the share allocation of the Board of Directors. The calculation is based on the average share price for the three months from November 1 to January 31.

In 2020, a total of 589 class A registered shares were allocated to the Board of Directors for 2019. The CHF 0.5 million valuation was based on a share price of CHF 861 each. Personnel expenses contain deferred expenses for the reporting year amounting to CHF 0.4 million (2019: CHF 0.4 million) for the share-based component of compensation.

Events after the balance sheet date

There were no events after the balance sheet date which would necessitate adjustments to the book value of the company’s assets or liabilities, or which require additional disclosure.