Content
7 notes to the financial statements7.1 income from investments
7.2 extraordinary income
7.3 extraordinary expenses
7.4 income taxes
7.5 net income for the period
7.6 financial assets
7.7 loans to affiliated and associated entities
7.8 payables to affiliated and associated entities
7.9 unrestricted reserves
7.10 risk assessment disclosures
7.11 remuneration of members of the board of directors and the executive board
7.12 legal notes required
7.13 major shareholders
7.14 proposed appropriation of retained earnings and unrestricted reserves
7 notes to the financial statements
7.1 income from investments
Income from subsidiaries is based upon the net income on 31 December 2009. The respective dividend payments have already been approved at the Annual General Meeting.
Compared to the financial year 2008, profits of the subsidiaries are considerably lower. As a consequence the resulting dividends are smaller.
7.2 extraordinary income
Orell Füssli Holding Ltd. had recorded an extraordinary income of CHF 24,046,000 in the financial year 2008 due to the disposal of the two subsidiaries Orell Füssli Wirtschaftsinformationen Ltd. and Kompass Schweiz Verlag Ltd. In 2009, renegotiations led to an additional profit of CHF 4,750,000.
7.3 extraordinary expenses
In the financial year 2009 and 2008, extraordinary expenses include single payments to pensioners of the Group and further donations. In 2008, the impairment of an investment was recorded as further expense.
7.4 income taxes
Income tax is calculated on the ordinary net income reduced by the dividends from subsidiaries in 2009.
7.5 net income for the period
Compared to 2008, dividend income from investments was considerably lower for the financial year 2009 due to smaller profits of the subsidiaries. The disposal of the two subsidiaries Orell Füssli Wirtschaftsinformationen Ltd. and Kompass Schweiz Verlag Ltd. had a further positive impact on the result of the previous year 2008.
7.6 financial assets
Changes of current and non-current assets increased in 2008 due to the sale of two subsidiaries. As a result of renegotiations in the financial year 2009, a further increase of financial assets was recorded. Apart from the renegotiated amount of CHF 4,750,000 the receivables are secured by first class bank guarantees.
7.7 loans to affiliated and associated entities
Loans granted to subsidiaries are generally due within one year. Therefore, they may change according to the needs of each company. The demand for loans and overdrafts provided by Orell Füssli Holding Ltd. increased in the financial year 2009 due to significant investments within the security printing business unit and lower cash inflows in the subsidiaries.
7.8 payables to affiliated and associated entities
Christmas sales and the disposal of a property in St. Gall generated a significant amount of cash and cash equivalents to the book retailing business in the last months of the year 2009. These funds were transferred to Orell Füssli Holding Ltd. on the basis of a short-term loan.
7.9 unrestricted reserves
Following the approval of the Annual General Meeting held on 11 May 2005 the unrestricted reserves and retained earnings have been merged together.
unrestricted reserves
in CHF '000 | 2009 | 2008 | |||
Opening balance at 1 January | 69,816 | 59,139 | |||
./. dividends paid | –15,680 | –9,800 | |||
+ retained earnings from previous period | 42,513 | 20,477 | |||
Closing balance at 31 December | 96,649 | 69,816 | |||
7.10 risk assessment disclosures
The Board of Directors and management of the Orell Füssli Group are responsible for the establishment and maintenance of adequate internal control over financial reporting. The Board of Directors of Orell Füssli Holding Ltd. is fully integrated into the internal risk assessment process. Organisational and process measures have been designed and implemented to identify and mitigate risks at an early stage. The risk assessment process correlates with the management structure of the business units.
The compliance officers of the business units coordinate the risk management under the control of the head for internal risk control. Identified risks are systematically listed and categorised in accordance with the criteria established by the Committee of Sponsoring Organisations of the Treadway Commission (COSO). The business units and management of the Group are in charge of assessment and management of the risks. The staff functions of the Orell Füssli Group are responsible for the basic principles, training, coordination and the monitoring. The head of the internal risk control reports regularly about nature, comprehension and assessment of identified risks and informs about the taken measures to the Board of Directors of the Orell Füssli Holding Ltd. and to the Audit Committee.
7.11 remuneration of members of the board of directors and the executive board
The Transparency Statute of the Swiss Federal Code of Obligations came into effect on 1 January 2007, by virtue of which all listed companies are obliged to make additional disclosures of compensation to directors and officers under articles 663bbis and 663c, paragraph 3.
The information provided in this section conforms to the requirements of the Swiss Federal Code of Obligations (SCO), although the consolidated financial statements have been drawn up in conformity with IFRS. Since the Orell Füssli Group has no equity-based compensation to disclose in compliance with IFRS 2, there are no valuation differences in the presentation.
Basic principles
Authority to stipulate remuneration for the members of the Board of Directors lies with the Board of Directors, while the Compensation Committee stipulates the salaries of the members of the Executive Board.
The Orell Füssli Group has neither a share nor an option allocation scheme for member of the Board of Directors and the Executive Board. Remuneration of the Board of Directors and the Executive Board consists of a fixed and a variable component. The variable compensation component for the Board of Directors is based on the dividend paid, while the variable compensation component for the Executive Board is based on a preset formula which takes into account EBIT and the achievement of individually specified annual targets.
With the exception of contribution to the pension fund, the upper limit of which is defined by occupational pension’s legislation, the Orell Füssli Group does not provide any specific pension funds for members of the Executive Board.
The remuneration stated refers to compensation made in respect to the appropriate reporting period. The tables below therefore contain in full all entitlements to payments in respect of the 2009 financial year.
Loans and other payments
No loans were granted to current or former members of the Board of Directors and the Executive Board in the 2009 financial year, nor were any guarantees assumed for loans granted to directors and officers by third parties. The balance sheet contains no claims of this nature arising from loans as at 31 December 2009.
The Orell Füssli Group made no payments to current or former members of the Board of Directors, the Executive Board or related parties other than those listed in the tables below, and did not wave any claims against such persons.
Share ownership
As per balance sheet date, no member of the Board of Directors or the Executive Board or related parties are listed in the share register of Orell Füssli Holding Ltd. Dr. Hans Kuhn is an Executive Vice President of SNB Swiss National Bank Ltd., which holds 653,460 shares of Orell Füssli Holding Ltd. Balthasar Meier is Chairman of the Board of Directors of a finance company which holds 12,600 shares of Orell Füssli Holding Ltd.
Remuneration of members of the Board of Directors
Compensation for non-executive directors always applies to a period of office. Provision is made in the relevant financial year for all compensation, even if these are not disbursed until the following year.
remuneration of members of the board of directors 2009
in CHF | |||||||||||
| Basic remuneration | Variable remuneration | Other payments | Total 2009 | ||||||||
in cash | in cash | Social security and pension costs | Special allowances | ||||||||
Dr. Klaus Oesch, Chairman Audit Committee (Member) Compensation Committee (Member) | 201,000 | 63,813 | 23,452 | – | 288,265 | ||||||
Dr. Rudolf Rentsch, Deputy Chairman Audit Committee (Chairman) | 30,000 | 12,500 | 3,139 | – | 45,639 | ||||||
Dr. Rudolf W. Hug Compensation Committee (Chairman) | 22,000 | 12,500 | 1,130 | – | 35,630 | ||||||
Dr. Hans Kuhn Compensation Committee (Member) | 22,000 | 12,500 | 2,548 | – | 37,048 | ||||||
Balthasar Meier Audit Committee (Member) | 24,000 | 12,500 | 2,696 | – | 39,196 | ||||||
Total | 299,000 | 113,813 | 32,965 | – | 445,778 | ||||||
remuneration of members of the board of directors 2008
in CHF | |||||||||||
| Basic remuneration | Variable remuneration | Other payments | Total 2008 | ||||||||
in cash | in cash | Social security and pension costs | Special allowances | ||||||||
Dr. Klaus Oesch, Chairman Audit Committee (Member) Compensation Committee (Member) | 201,000 | 72,819 | 42,970 | – | 316,789 | ||||||
Dr. Rudolf Rentsch, Deputy Chairman Audit Committee (Chairman) | 24,000 | 40,000 | 3,927 | – | 67,927 | ||||||
Dr. Rudolf W. Hug Compensation Committee (Chairman) | 22,000 | 40,000 | 3,804 | – | 65,804 | ||||||
Dr. Hans Kuhn Compensation Committee (Member) | 22,000 | 40,000 | 3,804 | – | 65,804 | ||||||
Balthasar Meier Audit Committee (Member) | 24,000 | 40,000 | 3,927 | – | 67,927 | ||||||
Total | 293,000 | 232,819 | 58,432 | – | 584,251 | ||||||
Remuneration of members of the Executive Board
The compensation of members of the Executive Board set out below corresponds to entitlements for the 2009 and 2008 reporting period. Provision is made in the relevant financial year for all compensation, even if these are not disbursed until the following year.
remuneration of members of the executive board 2009
in CHF | |||||||||||
| Basic remuneration | Variable remuneration | Other payments | Total 2009 | ||||||||
in cash | in cash | Social security and pension costs | Special allowances | ||||||||
Sönke Bandixen CEO Orell Füssli Group | 373,200 | 89,856 | 72,696 | 8,549 | 544,301 | ||||||
Other members of the Executive | 1,845,111 | 280,590 | 301,686 | 35,275 | 2,462,662 | ||||||
Total | 2,218,311 | 370,446 | 374,382 | 43,824 | 3,006,963 | ||||||
remuneration of members of the executive board 2008
in CHF | |||||||||||
| Basic remuneration | Variable remuneration | Other payments | Total 2008 | ||||||||
in cash | in cash | Social security and pension costs | Special allowances | ||||||||
Sönke Bandixen CEO Orell Füssli Group | 362,004 | 142,510 | 72,238 | 8,399 | 585,151 | ||||||
Other members of the Executive | 1,874,666 | 277,067 | 280,438 | 37,817 | 2,469,988 | ||||||
Total | 2,236,670 | 419,577 | 352,676 | 46,216 | 3,055,139 | ||||||
7.12 legal notes required
in CHF '000 at 31 December | 2009 | 2008 | |||
Contingent liabilities in favour of third parties | 8,435 | 9,121 | |||
At 31 December 2009 Orell Füssli does not have any own shares.
7.13 major shareholders
At 31 December 2009 | |||||
| Total registered shares | Participation in % | ||||
SNB Swiss National Bank Ltd., Berne, CH | 653,460 | 33.34% | |||
Fam. Siegert, Meerbusch, D | 134,500 | 6.86% | |||
No further disclosures are required by article 663b of the Swiss Federal Code of Obligations (SCO)
7.14 proposed appropriation of retained earnings and unrestricted reserves
The following proposal will be made on the occasion of the AGM on 11 May 2010, for the allocation of unappropriated profits and other retained earnings:
proposed appropriation of retained earnings and unrestricted reserves
in CHF '000 | 2009 | ||
Unrestricted reserves | 96,649 | ||
Net income for the year 2009 | 13,430 | ||
Earnings available for appropriation | 110,079 | ||
Dividend per share of CHF 2.50 | –4,900 | ||
Total unrestricted reserves | 105,179 | ||
If the proposal is accepted, the dividend amounts to:
dividend on acceptance of the proposed appropriation of retained earnings
in CHF | 2009 | ||
Dividend per share | 2.500 | ||
minus withholding tax | –0.875 | ||
To be paid out | 1.625 | ||