5. DETAILED INFORMATION ON STATEMENT OF FINANCIAL POSITION ITEMS

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5.1 Investment properties 

in CHF thousands

 

2017/18

2016/17

 

 

 

 

Balance as of beginning

 

198 480

195 860

Value-enhancing investments

 

135

251

Positive change in market value

 

2 010

5 044

Negative change in market value

 

–505

–2 675

Change in market value

 

1 505

2 369

Balance at the end of reporting period

 

200 120

198 480

The change in value of the investment properties from CHF 198.5 million to CHF 200.1 million reflects the positive letting development during the past twelve months as well as the positive transaction market in some of the relevant micro markets. Weighted average lease term (WALT) remained stable at 5.2 years as of 31 March 2018.

The principles and assumptions applied in the valuation of the investment properties are set out in the detailed valuation report.

A complete list of all investment properties along with all information in accordance with the Directive on Financial Reporting of the SIX Swiss Exchange can be found in the portfolio section of this annual report. This additional information is an integral part of the notes to the consolidated financial statements.

5.2 Deferred tax assets and liabilities

in CHF thousands

 

2017/18

2016/17

 

 

 

 

Deferred tax assets arising from:

 

 

 

– Tax loss carry-forwards

 

2 667

2 968

– Other valuation differences

 

43

71

Total deferred tax assets as of year end

 

2 710

3 039

 

 

 

 

Deferred tax liabilities arising from:

 

 

 

– Positive valuations of investment properties

 

12 522

11 805

– Other valuation differences

 

264

0

Total deferred tax liabilities as of year end

 

12 786

11 805

 

 

 

 

Net amounts as presented in balance sheet

 

 

 

Presented deferred tax assets

 

43

71

Presented deferred tax liabilities

 

10 119

8 837

 

 

 

 

Net deferred tax liabilities

 

 

 

Balance as of beginning

 

–8 766

–7 046

Deferred taxes recognized in profit & loss

 

–725

–1 193

Deferred taxes recognized in equity

 

–585

–527

Balance as of year end

 

–10 076

–8 766

in CHF thousands

 

2017/18

2016/17

 

 

 

 

Tax loss carry-forwards

 

 

 

As of year end

 

296 150

355 374

Maturity within

 

 

 

1 to 12 months

 

16 894

57 770

1 to 3 years

 

130 808

91 112

3 to 5 years

 

148 417

205 458

more than 5 years

 

560

1 034

without time limitation

 

0

0

Captialization:

 

 

 

not capitalized

 

279 819

337 072

capitalized

 

16 861

18 302

5.3 Trade accounts receivable

in CHF thousands

 

 

31.3.2018

 

 

31.3.2017

 

 

Accounts receivable

Value adjustment

 

Accounts receivable

Value adjustment

 

 

 

 

 

 

 

Not yet due

 

3

0

 

0

0

< 30 days past due

 

42

0

 

20

0

30-60 days past due

 

15

0

 

15

0

61-90 days past due

 

1

0

 

4

0

91-180 days past due

 

2

0

 

0

0

181-360 days past due

 

0

0

 

0

0

Total

 

63

0

 

39

0

 

 

 

 

 

 

 

Total accounts receivable

 

63

 

 

39

 

5.4 Cash and cash equivalents

As of the balance sheet date, the Company had cash and cash equivalents of CHF 4.5 million (previous year CHF 1.1 million).

5.5 Equity

Share capital

As of 31. March 2018 there were 3 318 027 shares issued with a nominal value of CHF 22.50, resulting in a share capital of TCHF 74 656. There were no changes in capital structure in the financial years 2017/2018 and 2016/2017.

Treasury shares

As in the previous year, no transactions with treasury shares took place in the current financial year. 

5.6 Future contractual maturities  

Based on the financial liabilities as of 31 March 2018 the following future contractual payment obligations exist (undiscounted amounts):

 

Carrying value

< 1 year

1 to 3 years

3 to 5 years

> 5 years

in CHF thousands

 

interest

amortisation

interest

amortisation

interest

amortisation

interest

amortisation

 

 

 

 

 

 

 

 

 

 

As of 31.3.2018

 

 

 

 

 

 

 

 

 

Mortgages

65 705

468

0

938

0

819

65 705

0

0

Trade accounts payable

572

0

572

0

0

0

0

0

0

Other short-term liabilities

912

0

912

0

0

0

0

0

0

Total financial liabilities as of 31.3.2018

67 189

468

1 484

938

0

819

65 705

0

0

 

 

 

 

 

 

 

 

 

 

As of 31.3.2017

 

 

 

 

 

 

 

 

 

Mortgages

108 156

465

108 156

0

0

0

0

0

0

Trade accounts payable

120

0

120

0

0

0

0

0

0

Derivative financial instruments

19 672

2 729

0

5 135

0

4 442

0

7 366

0

Other short-term liabilities

10 413

0

10 413

0

0

0

0

0

0

Total financial liabilities as of 31.3.2017

138 360

3 194

118 688

5 135

0

4 442

0

7 366

0

Future contractual maturities changed significantly since 31 March 2017. This change mainly reflects the refinancing of the Swiss portfolio and the repayment of the swap. In the current reporting period the mortgage of CHF 108.2 million was repaid and a new credit agreement in the amount of CHF 118.0 million was signed, of which CHF 66.0 million was drawn as of reporting date.

Trade accounts payable and the other short-term liabilities are incurred in the course of the Groupʼs operating activities and are covered by the short-term assets.

5.7 Financial instruments - Fair Value Hierarchie

The table belows shows the fair value of the financial instruments according IFRS 13. Since the book values of the categories “Loans and receivables at amortized cost” and “Liabilities at amortized cost” reflect their markte value, the financial instruments of these categories are not listed below. 

in CHF thousands

 

31.3.2018 Book value

31.3.2018 Fair Value

 

31.3.2017 Book value

31.3.2017 Fair Value

 

 

 

 

 

 

 

Derivative financial instruments

 

0

0

 

19 672

19 672

The above listed items fell in the Fair Value categorie Level 2. The fair values of mortgages are calculated at the present values of the payment flows using the relevant yield curve.

5.8 Financial instruments by category

in CHF thousands

 

31.3.2018 Book value

31.03.2017 Book value

Financial Assets

 

 

 

Loans and receivables at amortized cost

 

 

 

Trade accounts receivable

 

63

39

Receivables from shareholder loan

 

0

13 071

Prepaid service charges

 

1 200

968

Other current assets

 

899

880

Cash and cash equivalents

 

4 465

1 056

Total

 

6 627

16 014

 

 

 

 

Financial Liabilities

 

 

 

Financial Liabilities at amortized cost

 

 

 

Mortgages

 

65 705

108 156

Accrued interest

 

50

0

Prepaid service charges

 

912

721

Accounts payable

 

572

120

Bank dispocredit

 

0

9 691

Financial liabilities at fair value

 

 

 

Derivative financial instuments

 

0

19 672

Total

 

67 240

138 360

The reported value of financial assets reflects the maximum default risk disregarding any collateral, in the event that the contractual partners fail to meet their payment obligations. No concentration of default risks arising from business relations with individual debtors or groups of debtors has been identified.

5.9 Derivative financial instruments

Cash Flow Hedges

The Züblin Group used interest rate swaps to reduce the cash flow risks arising from its exposure to movements in interest rates. The fair value of derivative financial instruments were calculated as the present value of future cash flows. The fair value was based on counterpartiesʼ valuations and reviewed by Züblin. 

Maturity

 

Notional amounts 31.3.2018

Notional amounts 31.3.2017

 

Fair value 31.3.2018

Fair value 31.3.2017

in CHF thousands

 

 

 

 

 

 

 

 

 

 

 

 

 

1 to 12 months

 

0

0

 

0

0

1 to 3 years

 

0

0

 

0

0

3 to 5 years

 

0

0

 

0

0

More than 5 years

 

0

80 000

 

0

19 672

Total

 

0

80 000

 

0

19 672

– of which liabilities

 

 

 

 

0

19 672

In the previous year there was one interest rate swap with a contract volume of CHF 80 million. Due to the negative interest environment its effectiveness according to IAS 39 as of 31 March 2017 could no longer be confirmed. The interest rate swap was fully repaid in September 2017.

5.10 Mortgages 

In CHF thousands

 

31.3.2018

31.3.2017

 

 

 

 

Interest term structure

 

 

 

1 to 12 months

 

66 000

108 156

1 to 3 years

 

0

0

3 to 5 years

 

0

0

More than 5 years

 

0

0

Total interest bearing debts

 

66 000

108 156

Average effective interest rate

 

1.08%

0.85%

Current interest rate

 

0.70%

0.85%

 

 

 

 

Contractual maturity dates of mortgages

 

 

 

1 to 12 months

 

0

108 156

1 to 3 years

 

0

0

3 to 5 years

 

66 000

0

More than 5 years

 

0

0

Total

 

66 000

108 156

Average duration

 

4.5

0.5

of which:

 

 

 

– Non-current mortgages strategic

 

66 000

0

– Current mortgages strategic

 

0

108 156

 

 

 

 

Fair value of mortgages

 

 

 

Variable rate mortgages

 

65 705

108 156

Total

 

65 705

108 156

As of 31 March 2018 Züblin Groupʼs real estate portfolio is financed entirely by one variable-rate loan. The amounts shown as mortgages in the balance sheet include closing fees of CHF 0.3 million (previous year CHF 0.0 million). These closing fees are also reflected in the calculation of the average effective interest rate. 

The mortgage includes financial covenants which specify, among other things, adherence to certain financial indicators (loan-to-value ratio and equity ratio). The financial covenants are summarized in the table below:

 

 

Loan to value

≤ 60%

Equity ratio

≥ 10%

Züblin monitors compliance with these covenants on a quarterly basis. The breach of a covenant may have a variety of consequences and can result among other consequences in a higher interest rate or a (partiall) repayment of the loan. If the LTV rises above 60%, the company has the opportunity to restore compliance with this financial covenant. The mortgage agreement also contains a “change of control” clause which stipulates the repayment of the entire loan if Züblin Immobilien Holding AG holds less than 50.1% of the voting rights or shares in the borrowing subsidiary. 

As of balance sheet date, the Company was in compliance with all of its covenants.

The table below summarizes the value of investment properties pledged as security for mortgages:

In CHF thousands

 

31.3.2018

31.3.2017

 

 

 

 

Book value of assets pledged (investment properties)

 

200 120

198 480

Credit drawn (debt secured)

 

66 000

108 156

Insurance policies for investment properties have been pledged as security over and above the mortgage lines.

5.11 Employee retirement benefit plan

The Züblin Group has different pension schemes throughout the countries in which it operates. These schemes vary according to local laws and employment regulations. In all countries outside of Switzerland, the plans are defined contribution plans. In the past twelve months, expenditures totalling CHF 0.1 million (previous year CHF 0.2 million) for all defined contribution plans were recorded. In Switzerland, the pension plan of Züblin Immobilien Management AG has been designated as a defined benefit plan under IAS 19.

Swiss pension schemes are governed by the Swiss Federal Law on Occupational Retirement, Survivorsʼ and Disability Pension Plans (BVG). The pension plan is financed by contributions from both employer and employees. The BVG requires pension schemes to be run as legally independent institutions. The pension scheme is headed by a board of trustees composed of an equal number of employer and employee representatives. It is responsible for determining and implementing the investment strategy.

The following amounts are based upon the Project Unit Credit Method:

in CHF thousands

 

31.3.2018

31.3.2017

 

 

 

 

Pension liabilities (present value)

 

1 527

2 004

Pension assets at market value

 

1 322

1 666

Pension liabilities (technical deficit)

 

–205

–338

The above amount has been recorded under “Other non-current liabilities”.

The pension liabilities and assets changed as follows in the Züblin Groupʼs consolidated balance sheet:

in CHF thousands

 

2017/18

2016/17

 

 

 

 

Pension liabilities (present value) at 1.4.

 

2 004

2 140

Current service costs

 

117

162

Employees' contributions

 

62

98

Interest expenses

 

13

11

Benefits (paid) / deposited

 

–515

–118

Past service cost

 

1

1

Actuarial gains/losses

 

–154

–290

Pension liabilities (present value) at 31.3.

 

1 528

2 004

 

 

 

 

Pension assets at market value at 1.4.

 

1 666

1 578

Expected income on plan assets

 

11

8

Employer contributions

 

93

146

Employees' contributions

 

62

98

Benefits (paid) / deposited

 

–515

–118

Actuarial gains/losses

 

5

–46

Pension assets at market value at 31.3.

 

1 322

1 666

The following table details the cover of the defined benefit pension plan and the impact of adjustments in the expected or actual values of the pension liabilities and assets:

in CHF thousands

 

31.3.2018

31.3.2017

 

 

 

 

Expected contribution in the coming year

 

55

90

 

 

 

 

Penison expense is comprised of the following items:

 

 

 

– Current service cost

 

117

162

– Interest expense

 

3

4

Pension expenses

 

120

166

The remeasurement of the net pension obligation reported in other comprehensive income breaks down as follows:

in CHF thousands

 

31.3.2018

31.3.2017

 

 

 

 

Actuarial gains/losses on pension liabilities

 

154

290

Actuarial gains/losses on plan assets

 

5

–46

Defined Benefit Cost recognised in OCI

 

159

244

The calculation of the Groupʼs pension liabilities is based on the following assumptions:

 

 

31.3.2018

31.3.2017

 

 

 

 

Discount rate

 

0.80%

0.70%

Expected future salary increases

 

1.00%

1.00%

Expected future pension increases

 

0.00%

0.00%

Life expectancy in years at age of retirement (man/woman)

 

BVG 2015 GT

BVG 2015 GT

A sensitivity analysis was carried out using constant assumptions for the most important assumptions used to calculate the pension liabilities.

 

 

31.3.2018

31.3.2017

 

 

 

 

Pension liabilities (present value) at 31.3.

 

1 528

2 004

– Discount rate -0.25%

 

1 579

2 084

– Discount rate +0.25%

 

1 480

1 929

– Expected salary increases -0.25%

 

1 524

1 996

– Expected salary increases +0.25%

 

1 529

2 010

– Life expectancy in years - 1 year

 

1 489

1 960

– Life expectancy in years + 1 year

 

1 567

2 048

Asset allocation: 100% of the assets are managed and invested by a reinsurance company. Furthermore, the Company has insured a minimum return on its pension assets. Therefore, a detailed asset allocation is not presented.

5.12 Liabilities from long-term rental contracts

Züblin has entered into fixed rental commitments until 30 June 2020 in a total amount of CHF 0.4 million (previous year CHF 0.6 million). For the reporting period the rental payments recorded in the income statement amounted to CHF 0.2 million (previous year CHF 0.2 million).

in CHF thousands

 

31.3.2018

31.3.2017

 

 

 

 

Liabilities from long-term rental contracts

 

 

 

1 to 12 months

 

162

162

1 to 3 years

 

202

364

3 to 5 years

 

0

0

more than 5 years

 

0

0

5.13 Related parties

In accordance with IAS 24, related parties for the reporting financial year included:

  1. The Board of Directors
  2. Members of Züblin Group Management
  3. Lamesa Holding SA, Panama

Shareholdings by related parties as of 31 March 2018

Shareholdings by the Board of Directors and the Group Management are disclosed in detail in note 5.15

Transactions with related parties and significant shareholders

Loan to shareholder

As of 31 March 2017 the Group had granted a loan to Lamesa Holding SA, Panama in the amount of CHF 13 million. The loan bore an interest rate of 3% p.a. and was fully repaid in the first quarter of the financial year 2017/18.

There were no other transactions with related parties or significant shareholders in financial year 2017/18. Nor were any advisory fees paid to related parties or significant shareholders over and above the remuneration disclosed in Note 5.14. The Board of Directors and Group Management continually monitors potential conflicts of interest.

Loans to members of governing bodies

No loans have been granted to members of the Board of Directors or the Züblin Group Management.

5.14 Compensation

Compensation of the members of the Board of Directors

in CHF

Basic compensation

Subsidiaries 1

Total

 

 

 

 

Financial year 2017/2018

 

 

 

Dr. Iosif Bakaleynik, Chairman 2

100 000

0

100 000

Vladislav Osipov, Member 2

70 000

0

70 000

Dr. Markus Wesnitzer, Member 2

70 000

5 926

75 926

Dr. Wolfgang Zürcher, Member

70 000

0

70 000

Total Board of Directors

310 000

5 926

315 926

 

 

 

 

 

 

 

 

Financial year 2016/2017

 

 

 

Dr. Iosif Bakaleynik, Chairman 2

100 000

0

100 000

Vladislav Osipov, Member 2

70 000

0

70 000

Iakov Tesis, Member until 21 March 2017

70 000

0

70 000

Dr. Markus Wesnitzer, Member 2

70 000

13 545

83 545

Dr. Wolfgang Zürcher, Member

70 000

0

70 000

Total Board of Directors

380 000

13 545

393 545

1 Board compensation at the subsidiary level.

2 This member of the Board of Directors was also a member of the Board of Directors of ZIAG Immobilien AG, Dusseldorf until 21/08/2017.

Compensation of the Executive Management

in CHF

Basic compensation

Bonus in cash

Employers contributions 1

Total

Financial year 2017/2018

 

 

 

 

Dr. Iosif Bakaleynik, CEO

625 000

556 250

140 292

1 321 542

Roland Friederich, CFO

220 000

195 800

55 367

471 167

Total Executive Management

845 000

752 050

195 658

1 792 709

 

 

 

 

 

Financial year 2016/2017

 

 

 

 

Dr. Iosif Bakaleynik, CEO

625 000

312 500

130 958

1 068 458

Thomas Wapp, CFO and COO until 31 March 2017

360 000

0

68 846

428 846

Roland Friederich, CFO since 1 December 2016

73 333

36 667

14 300

124 300

Total Executive Management

1 058 333

349 167

214 104

1 621 604

1 thereof contribution to pension schemes (AHV, pension fund) CHF 146'828 (prior year: CHF 199'483)

5.15 Shareholdings

 

Shares ZIHAG 1

As of 31.3.2018

 

Dr. Iosif Bakaleynik, Chairman

10 766

Vladislav Osipov, Member

0

Dr. Markus Wesnitzer, Member

63

Dr. Wolfgang Zürcher, Mitglied

0

Total Board of Directors

10 829

 

 

As of 31.3.2017

 

Dr. Iosif Bakaleynik, Chairman

6 666

Vladislav Osipov, Member

0

Iakov Tesis, Member

0

Dr. Markus Wesnitzer, Member

63

Dr. Wolfgang Zürcher, Mitglied

0

Total Board of Directors

6 729

1 Shares ZIHAG = shares in Züblin Immobilien Holding AG.

 

Shares ZIHAG 1

As of 31.3.2018

 

Dr. Iosif Bakaleynik, CEO

10 766

Roland Friederich, CFO

100

Total Executive Management

10 866

 

 

As of 31.3.2017

 

Dr. Iosif Bakaleynik, CEO

6 666

Thomas Wapp, CFO and COO until 31 March 2017

0

Roland Friederich, CFO since 1 December 2016

0

Total Executive Management

6 666

1 Shares ZIHAG = shares in Züblin Immobilien Holding AG.