Content
7 notes to the financial statements7.1 income from investments
7.2 financial result
7.3 extraordinary income
7.4 extraordinary expenses
7.5 income taxes
7.6 net income for the period
7.7 financial assets
7.8 loans to affiliated and associated entities
7.9 payables to affiliated and associated entities
7.10 unrestricted reserves
7.11 risk assessment disclosures
7.12 remuneration of members of the board of directors and the executive board
7.13 legal notes required
7.14 authorised capital
7.15 major shareholders
7.16 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 2010. The respective dividend payments have already been approved at the Annual General Meeting.
7.2 financial result
Orell Füssli Holding Ltd accounted for an exceptional high foreign exchange loss on loan assets held in Euro due to the weakening of the Euro against the Swiss Franc. The amount of CHF 5,165,000 was recorded as an expense in the financial results 2010. The disclosed financial income and expense were not accumulated.
7.3 extraordinary income
Orell Füssli Holding Ltd generated an extraordinary income from the sale of its controlling interest in Photoglob Ltd in an amount of CHF 421,000. Photoglob Ltd is now included as investments in associates. An additional profit of CHF 4,750,000 was included in the 2009 financial statement due to renegotiations on the purchase price of Orell Füssli Wirtschaftsinformationen Ltd and Kompass Schweiz Verlag Ltd.
7.4 extraordinary expenses
In the financial year 2010 and 2009, extraordinary expenses include single payments to pensioners of the Group and further donations.
7.5 income taxes
Income tax is calculated on the ordinary net income reduced by the dividends from subsidiaries in 2010.
7.6 net income for the period
The foreign exchange loss on loan assets held in Euro reduced the 2010 net income for the period considerably. The disposal of the two subsidiaries Orell Füssli Wirtschaftsinformationen Ltd and Kompass Schweiz Verlag Ltd had a positive impact on the result of the previous year 2009.
7.7 financial assets
Loan assets resulting from the sale of the two subsidiaries Orell Füssli Wirtschaftsinformationen Ltd and Kompass Schweiz Verlag Ltd were paid before maturity to Orell Füssli Holding Ltd in 2010 financial year. In previous periods, the sale of those subsidiaries had led to an increase of the financial assets.
7.8 loans to affiliated and associated entities
Orell Füssli Holding Ltd provides loans and overdrafts for its subsidiaries and other related companies.
7.9 payables to affiliated and associated entities
Christmas sales usually generate a significant amount of cash and cash equivalents to the book retailing business in the last months of the year. In 2010 and 2009, these funds were transferred to Orell Füssli Holding Ltd on the basis of a short-term loan.
7.10 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
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in CHF '000
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2010 | 2009 | |||
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Opening balance at 1 January
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96,649 | 69,816 | |||
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./. dividends paid
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–4,900 | –15,680 | |||
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+ retained earnings from previous period
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13,430 | 42,513 | |||
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Closing balance at 31 December
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105,179 | 96,649 | |||
7.11 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.
7.12 remuneration of members of the board of directors and the executive board
By virtue of the Transparency Statute of the Swiss Federal Code of Obligations, 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 members 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 2010 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 2010 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 2010.
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 waive any claims against such persons.
Share ownership
As per balance sheet date, 200 shares are held by Nick Huber, member of the Board of Directors, and 265 shares are held by Michel Kunz, member of the Executive Board. No other member of the Board of Directors, of 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.
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 2010
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in CHF
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Basic remuneration |
Variable remuneration |
Other payments |
Total 2010 |
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in cash |
in cash |
Social security and pension costs |
Special allowances |
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Dr. Klaus Oesch, Chairman Audit Committee (Member) Compensation Committee (Member)1)
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261,000 | 35,000 | 22,070 | – | 318,070 | ||||||
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Dr. Rudolf Rentsch, Deputy Chairman Audit Committee (Chairman)2)
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28,000 | 12,500 | 1,317 | – | 41,817 | ||||||
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Dr. Rudolf W. Hug Compensation Committee (Chairman)2)
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30,000 | 12,500 | 1,382 | – | 43,882 | ||||||
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Dr. Hans Kuhn Compensation Committee (Member)2)
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26,000 | 12,500 | 2,824 | – | 41,324 | ||||||
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Nick Huber Audit Committee (Member)2)
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20,000 | 12,500 | 2,384 | – | 34,884 | ||||||
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Total
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365,000 | 85,000 | 29,977 | – | 479,977 | ||||||
| 1) The remuneration of Dr. Klaus Oesch corresponds to the total compensation paid to him in 2010. This includes all remuneration for serving as interim CEO of Orell Füssli Holding Ltd, a function which he performed additionally between 1 March 2010 and 30 June 2010. |
| 2) The appointment of a new CEO resulted in an increase in the number of meetings held by the Board of Directors compared with the previous year. |
remuneration of members of the board of directors 2009
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in CHF
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Basic remuneration |
Variable remuneration |
Other payments |
Total 2009 |
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in cash |
in cash |
Social security and pension costs |
Special allowances |
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Dr. Klaus Oesch, Chairman Audit Committee (Member) Compensation Committee (Member)
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201,000 | 63,813 | 23,452 | – | 288,265 | ||||||
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Dr. Rudolf Rentsch, Deputy Chairman Audit Committee (Chairman)
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30,000 | 12,500 | 3,139 | – | 45,639 | ||||||
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Dr. Rudolf W. Hug Compensation Committee (Chairman)
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22,000 | 12,500 | 1,130 | – | 35,630 | ||||||
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Dr. Hans Kuhn Compensation Committee (Member)
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22,000 | 12,500 | 2,548 | – | 37,048 | ||||||
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Balthasar Meier Audit Committee (Member)
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24,000 | 12,500 | 2,696 | – | 39,196 | ||||||
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Total
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299,000 | 113,813 | 32,965 | – | 445,778 | ||||||
Remuneration of members of the Executive Board
The compensation of members of the Executive Board set out below corresponds to entitlements for the 2010 and 2009 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 2010
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in CHF
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Basic remuneration |
Variable remuneration |
Other payments |
Total 2010 |
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in cash |
in cash |
Social security and pension costs |
Special allowances |
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Michel Kunz CEO Orell Füssli Group1)
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241,336 | 66,667 | 47,586 | 13,334 | 368,923 | ||||||
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Other members of the Executive2)
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1,664,217 | 357,729 | 260,933 | 36,580 | 2,319,459 | ||||||
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Total
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1,905,553 | 424,396 | 308,519 | 49,914 | 2,688,382 | ||||||
| 1) The remuneration disclosed for CEO Michel Kunz relates to the period from 1 May to 31 December 2010. On an annualised basis Michel Kunz receives the highest compensation paid to a member of the Executive Board. He has been in office as CEO of Orell Füssli Holding Ltd since 1 July 2010. Information on Dr. Klaus Oesch has already been disclosed under the heading of “Remuneration of members of the Board of Directors”. |
| 2) The departure of the CIO in July 2010 and the Head of Human Resources in September 2010 resulted in a reduction in the number of members of the Executive Board. Neither of these positions was refilled in the 2010 financial year. |
Compensation for former CEO Sönke Bandixen totalled CHF 428,090. The amount comprises a basic remuneration of CHF 248,800, a variable component of CHF 125,000 and social security compensation of CHF 54,290. This expenditure is not included in the total remuneration of members of the Executive Board.
remuneration of members of the executive board 2009
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in CHF
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Basic remuneration |
Variable remuneration |
Other payments |
Total 2009 |
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in cash |
in cash |
Social security and pension costs |
Special allowances |
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Sönke Bandixen CEO Orell Füssli Group
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373,200 | 89,856 | 72,696 | 8,549 | 544,301 | ||||||
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Other members of the Executive
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1,845,111 | 280,590 | 301,686 | 35,275 | 2,462,662 | ||||||
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Total
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2,218,311 | 370,446 | 374,382 | 43,824 | 3,006,963 | ||||||
7.13 legal notes required
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in CHF '000 at 31 December
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2010 | 2009 | |||
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Contingent liabilities in favour of third parties
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17,195 | 8,435 | |||
At 31 December 2010 Orell Füssli does not have any own shares.
7.14 authorised capital
At balance sheet date authorised capital of the Orell Füssli Holding Ltd amounts to the equivalents of 400,000 shares, as approved by the Annual General Meeting held on 6 May 2009 for a further period of two years. Modalities and conditions are defined once the decision is taken to issue these shares.
7.15 major shareholders
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At 31 December 2010
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Total registered shares |
Participation in % |
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SNB Swiss National Bank Ltd, Berne (CH)
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653,460 | 33.34% | |||
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Dieter Meier, Buenos Aires (AR)
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274,226 | 13.99% | |||
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Fam. Siegert, Meerbusch (D)
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144,000 | 7.35% | |||
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Sarasin Investmentfonds Ltd, Basle (CH)
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124,000 | 6.33% | |||
No further disclosures are required by article 663b of the Swiss Federal Code of Obligations (SCO)
7.16 proposed appropriation of retained earnings and unrestricted reserves
The following proposal will be made on the occasion of the Annual General Meeting on 10 May 2011, for the allocation of unappropriated profits and other retained earnings:
proposed appropriation of retained earnings and unrestricted reserves
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in CHF '000
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2010 | ||
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Unrestricted reserves
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105,179 | ||
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Net income for the year 2010
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8,374 | ||
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Earnings available for appropriation
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113,553 | ||
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Dividend per share of CHF 2.50
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–4,900 | ||
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Total unrestricted reserves
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108,653 | ||
If the proposal is accepted, the dividend amounts to:
dividend on acceptance of the proposed appropriation of retained earnings
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in CHF
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2010 | ||
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Dividend per share
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2.500 | ||
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minus withholding tax
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–0.875 | ||
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To be paid out
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1.625 | ||