5. DETAILED INFORMATION ON STATEMENT OF FINANCIAL POSITION ITEMS

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5.1 Investment properties 

in CHF thousands

 

2019/20

2018/19

 

 

 

 

Balance as of beginning

 

200 880

200 120

Purchases

 

15 613

0

Value-enhancing investments

 

1 198

164

Positive change in market value

 

2 131

1 410

Negative change in market value

 

–1 912

–814

Change in market value

 

219

596

Balance at the end of reporting period

 

217 910

200 880

In the 2019/20 financial year, the value of the investment properties increased by CHF 17.0 million. This was mainly due to the acquisition of the property in Zurich-Oerlikon (CHF 15.6 million) and value-enhancing investments of CHF 1.2 million.

Against the background of the events in connection with the Corona crisis, the changes in market value of the portfolio as at 31 March 2020 give a different picture. Züblin traditionally invests in office properties and is currently invested exclusively in Switzerland. An analysis of the potential impact of the health crisis on the direct sector affiliation of our tenants shows that only a small percentage of 8% of the tenants are severely affected by officially ordered closures. The vast majority of tenants are active in low-risk sectors. The properties in Zurich – Holbeinstrasse, Zurich – Hofwiesenstrasse and Zurich – Hardtumstrasse recorded a positive change in market value totalling CHF 2.1 million in the financial year. The properties at Bern – Morgenstrasse, Baden – Rütistrasse and in Egg have recorded a total write-down of CHF 1.9 million.

The weighted average lease term (WALT) as of 31 March 2020 is 3.8 years (previous year 4.3 years).

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 Furnishing 

in CHF thousands

Total

 

Office furnishing and fittings

EDP

 

 

 

 

 

Acquisition costs

 

 

 

 

Balance as of 1.4.18

208

 

108

100

Additions

0

 

0

0

Disposals

0

 

0

0

Balance as of 31.3.19

208

 

108

100

 

 

 

 

 

Additions

266

 

241

25

Disposals

–47

 

–47

0

Balance as of 31.3.20

427

 

302

125

 

 

 

 

 

Accumulated depreciation

 

 

 

 

Balance as of 1.4.18

165

 

69

96

Additions

19

 

17

2

Disposals

0

 

0

0

Balance as of 31.3.19

184

 

86

98

 

 

 

 

 

Additions

25

 

20

5

Disposals

–45

 

–45

0

Balance as of 31.3.20

164

 

61

103

 

 

 

 

 

Net book value as of 31.3.20

263

 

241

22

Net book value as of 31.3.19

24

 

22

2

5.3 Deferred tax assets and liabilities

in CHF thousands

 

31.3.2020

31.3.2019

 

 

 

 

Deferred tax assets arising from:

 

 

 

– Tax loss carry-forwards

 

895

1 066

– Other valuation differences

 

53

50

Total deferred tax assets as of year end

 

948

1 116

 

 

 

 

Deferred tax liabilities arising from:

 

 

 

– Positive valuations of investment properties

 

13 861

13 219

– Other valuation differences

 

730

264

Total deferred tax liabilities as of year end

 

14 591

13 483

 

 

 

 

Net amounts as presented in balance sheet

 

 

 

Presented deferred tax assets

 

0

50

Presented deferred tax liabilities

 

13 643

12 417

 

 

 

 

Net deferred tax liabilities

 

 

 

Balance as of beginning

 

–12 367

–10 076

Deferred taxes recognized in profit & loss

 

–1 282

–2 306

Deferred taxes recognized in OCI

 

5

16

Balance as of year end

 

–13 643

–12 367

in CHF thousands

 

31.3.2020

31.3.2019

 

 

 

 

Tax loss carry-forwards

 

 

 

As of year end

 

192 577

267 579

Maturity within

 

 

 

1 to 12 months

 

56 590

74 218

1 to 3 years

 

133 861

190 584

3 to 5 years

 

0

1 030

more than 5 years

 

2 126

1 747

without time limitation

 

0

0

Captialization:

 

 

 

not capitalized

 

186 501

262 468

capitalized

 

6 076

5 111

5.4 Trade accounts receivable

in CHF thousands

 

31.3.2020

 

31.3.2019

 

 

Accounts receivable

Value adjustment

 

Accounts receivable

Value adjustment

 

 

 

 

 

 

 

Not yet due

 

38

0

 

8

0

< 30 days past due

 

230

0

 

39

0

30-60 days past due

 

3

0

 

0

0

61-90 days past due

 

3

0

 

2

0

91-180 days past due

 

3

0

 

0

0

181-360 days past due

 

0

0

 

0

0

Total

 

277

0

 

49

0

 

 

 

 

 

 

 

Total accounts receivable

 

277

 

 

49

 

5.5 Cash and cash equivalents

As of the balance sheet date, the Company had cash and cash equivalents of CHF 5.1 million (previous year CHF 6.1 million).

5.6 Equity

Share capital

As of 31 March 2020 there were 3ʼ318ʼ027 shares issued with a nominal value of CHF 22.50, resulting in a share capital of kCHF 74ʼ656. There were no changes in capital structure in the financial years 2019/2020 and 2018/2019.

Treasury shares

 

Nuumber of treasury shares

Treasury shares within equity in kCHF

 

 

 

Balance as of beginning of period

0

0

Purchase of own shares

11 217

–296

Sale of own shares

–8 837

233

Balance as end of period

2 380

–63

The company holds a total of 2,380 treasury shares as of 31 March 2020. In the 2019/2020 financial year, 11,217 shares were purchased at prices between CHF 25.40 and CHF 27.00 and 8,837 shares were sold at prices between CHF 25.50 and CHF 27.20 in the period July 2019 to December 2019 under a market making mandate delegated to a Swiss investment bank. Treasury shares are reported as a negative item in equity at cost. As of 31 March 2020, this item amounted to kCHF 63.

No transactions with treasury shares took place in the previous financial year. 

Distribution from capital contribution reserves

The Annual General Meeting of Züblin Immobilien Holding AG on 18 June 2019 approved a distribution of CHF 1.00 per registered share from the capital contribution reserves. This corresponds to a total amount of kCHF 3ʼ318. On 24 June 2019, a distribution of kCHF 1ʼ936 was made in favour of the shareholders. As in the previous year the dividends attributable to Lamesa Holding SA were carried as a liability in the balancs sheet item “liabilities to participants".

5.7 Future contractual maturities

Based on the financial liabilities as of 31 March 2020 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 31.3.2020

 

 

 

 

 

 

 

 

 

Mortgages

72 836

511

0

749

73 000

0

0

0

0

Trade accounts payable

404

0

404

0

0

0

0

0

0

Liabilities to participants

2 764

0

2 764

0

0

0

0

0

0

Other short-term liabilities

936

0

936

0

0

0

0

0

0

Total financial liabilities as of 31.3.2020

76 938

511

4 103

749

73 000

0

0

0

0

 

 

 

 

 

 

 

 

 

 

As of 31.3.2019

 

 

 

 

 

 

 

 

 

Mortgages

64 769

463

0

923

0

216

65 000

0

0

Trade accounts payable

441

0

441

0

0

0

0

0

0

Liabilities to participants

1 382

0

1 382

0

0

0

0

0

0

Other short-term liabilities

731

0

731

0

0

0

0

0

0

Total financial liabilities as of 31.3.2019

67 322

463

2 554

923

0

216

65 000

0

0

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.

5.8 Financial instruments by category

The table below shows the book values and fair values in accordance with IFRS 13 of all financial instruments carried in the balance sheet. Since the book values of the financial assets at amortized cost and financial liabilities at amortized cost reflect in most cases a reasonable approximation of their fair value, the fair values are only separately listed below, if there are deviations from the book value. 

in CHF thousands

 

31.3.2020 Book value

31.3.2020 Fair Value

 

31.3.2019 Book value

31.3.2019 Fair Value

Financial assets at amortized cost

 

 

 

 

 

 

Trade accounts receivable

 

277

 

 

49

 

Prepaid service charges

 

1 222

 

 

1 120

 

Other current assets

 

190

 

 

532

 

Cash and cash equivalents

 

5 074

 

 

6 120

 

Total

 

6 763

 

 

7 821

 

 

 

 

 

 

 

 

Financial liabilities at amortized cost

 

 

 

 

 

 

Mortgages 1

 

72 836

73 000

 

64 769

65 000

Accrued interest

 

6

 

 

4

 

Prepaid service charges

 

930

 

 

727

 

Accounts payable

 

404

 

 

441

 

Liabilities to participants

 

2 764

 

 

1 382

 

Total

 

76 940

 

 

67 323

 

1 Fair Value category level 2

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 Mortgages 

In CHF thousands

 

31.3.2020

31.3.2019

 

 

 

 

Interest term structure

 

 

 

1 to 12 months

 

73 000

65 000

1 to 3 years

 

0

0

3 to 5 years

 

0

0

More than 5 years

 

0

0

Total interest bearing debts

 

73 000

65 000

Average effective interest rate

 

1.01%

1.09%

Current interest rate

 

0.70%

0.70%

 

 

 

 

Contractual maturity dates of mortgages

 

 

 

1 to 12 months

 

0

0

1 to 3 years

 

73 000

0

3 to 5 years

 

0

65 000

More than 5 years

 

0

0

Total

 

73 000

65 000

Average duration

 

2.5

3.5

 

 

 

 

Fair value of mortgages

 

 

 

Variable rate mortgages

 

73 000

65 000

Total

 

73 000

65 000

As of 31 March 2020 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 0.2 million (previous year CHF 0.2 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

 

31.3.2020

31.3.2019

 

 

 

 

Book value of assets pledged (investment properties)

 

201 640

200 880

Credit drawn (debt secured)

 

73 000

65 000

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

5.10 Pension liabilities

The Züblin Group has a defined benefit plan according to IAS 19 in Switzerland. In the past twelve months, expenditures totalling CHF 0.1 million (previous year CHF 0.1 million) for the defined benefit plan were recorded. 

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

 

31.3.2020

31.3.2019

 

 

 

 

Pension liabilities (present value)

 

1 033

2 086

Pension assets at market value

 

781

1 848

Pension liabilities (technical deficit)

 

–252

–238

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

in CHF thousands

 

2019/20

2018/19

 

 

 

 

Pension liabilities (present value) at 1.4.

 

2 087

1 528

Current service costs

 

92

82

Employees' contributions

 

73

84

Interest expenses

 

9

14

Benefits (paid) / deposited

 

–653

212

Past service cost

 

0

–1

Others (Derecognition pensioner AXA Life)

 

–535

0

Actuarial gains/losses

 

–40

168

Pension liabilities (present value) at 31.3.

 

1 033

2 087

 

 

 

 

Pension assets at market value at 1.4.

 

1 847

1 322

Income on plan assets

 

7

12

Employer contributions

 

109

126

Employees' contributions

 

73

84

Benefits (paid) / deposited

 

–653

212

Others (Derecognition pensioner AXA Life)

 

–535

0

Actuarial gains/losses

 

–67

91

Pension assets at market value at 31.3.

 

781

1 847

The following table provides a break down of pension expenses: 

in CHF thousands

 

31.3.2020

31.3.2019

 

 

 

 

Expected contribution in the coming year

 

76

71

 

 

 

 

Penison expense in the current period is comprised of the following items:

 

 

 

– Current service cost

 

93

82

– Interest expense

 

2

2

– Past service cost

 

0

–1

Pension expenses

 

95

83

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

in CHF thousands

 

31.3.2020

31.3.2019

 

 

 

 

Actuarial gains (+) /losses on pension liabilities (-)

 

40

–168

Actuarial gains (+)/losses on plan assets (-)

 

–67

91

Defined Benefit Cost recognised in OCI

 

–27

–77

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

 

 

31.3.2020

31.3.2019

 

 

 

 

Discount rate

 

0.50%

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.

 

 

31.3.2020

31.3.2019

 

 

 

 

Pension liabilities (present value) at 31.3.

 

1 033

2 087

– Discount rate -0.25%

 

1 081

2 161

– Discount rate +0.25%

 

989

2 018

– Expected salary increases -0.25%

 

1 031

2 083

– Expected salary increases +0.25%

 

1 037

2 090

– Life expectancy in years - 1 year

 

1 019

2 038

– Life expectancy in years + 1 year

 

1 047

2 135

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.

5.11 Liabilities from long-term rental contracts

Züblin has entered into fixed rental commitments until 30 June 2020 in a total amount of CHF 0.0 million (previous year CHF 0.2 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

 

31.3.2020

31.3.2019

 

 

 

 

Liabilities from long-term rental contracts

 

 

 

1 to 12 months

 

41

162

1 to 3 years

 

0

40

3 to 5 years

 

0

0

more than 5 years

 

0

0

5.12 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 2020

Shareholdings by the Board of Directors and the Group Management are disclosed in detail in note 5.14.

Transactions with related parties and significant shareholders

Unpaid Dividend to shareholder

As of 31 March 2020 the Züblin Group has open payables to Lamesa Holding SA resulting from unpaid dividends in the amount of CHF 2.8 Mio (see note 5.5). The payable shown in the balance sheet line “liabilities to participants” does not bare any interest. 

There were no other transactions with related parties or significant shareholders in financial year 2019/20. Nor were any advisory fees paid to related parties or significant shareholders over and above the remuneration disclosed in note 5.13. 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.

5.13 Compensation

Compensation of the members of the Board of Directors

in CHF

Basic compensation

Total

 

 

 

Financial year 2019/20

 

 

Dr. Wolfgang Zürcher, Chairman 1

130 000

130 000

Vladislav Osipov, Member

70 000

70 000

Dr. Markus Wesnitzer, Member

70 000

70 000

Dr. Iosif Bakaleynik 2

25 000

25 000

Total Board of Directors

295 000

295 000

Compensation approved by the Annual General Meeting

 

550 000

 

 

 

Financial year 2018/19

 

 

Dr. Iosif Bakaleynik, Chairman 2

100 000

100 000

Vladislav Osipov, Member

70 000

70 000

Dr. Markus Wesnitzer, Member

70 000

70 000

Dr. Wolfgang Zürcher, Member

70 000

70 000

Total Board of Directors

310 000

310 000

Compensation approved by the Annual General Meeting

 

550 000

1 As of 18.06.2019 elected chairman of the board, prior member

2 until 18.06.2019

Compensation of the Executive Management

in CHF

 

Basic compensation

Bonus in cash

 

Employers contributions 1

Total

Financial year 2019/20

 

 

 

 

 

 

Roland Friederich, CEO (since 15.7.2019) / CFO

 

276 988

0

 

52 004

328 992

Dr. Iosif Bakaleynik, CEO (until 14.7.2019)

 

312 498

0

 

53 676

366 174

Total Group Management

 

589 486

0

 

105 680

695 166

Compensation approved by the Annual General Meeting

 

 

 

 

 

1 500 000

 

 

 

 

 

 

 

Financial year 2018/19

 

 

 

 

 

 

Dr. Iosif Bakaleynik, CEO

 

507 813

250 000

 

109 390

867 203

Roland Friederich, CFO

 

220 000

110 000

 

51 029

381 029

Total Group Management

 

727 813

360 000

 

160 419

1 248 232

Compensation approved by the Annual General Meeting

 

 

 

 

 

1 800 000

1 thereof contribution to pension schemes (AHV, pension fund) CHF 82'586 (prior year: CHF 144'016)

5.14 Shareholdings

 

Number of shares

As of 31.3.2020

 

Dr. Wolfgang Zürcher, Chairman

1 800

Vladislav Osipov, Member

0

Dr. Markus Wesnitzer, Member

63

Total Board of Directors

1 863

 

 

As of 31.3.2019

 

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

 

Number of shares

As of 31.3.2020

 

Roland Friederich, CEO/ CFO

100

Dr. Iosif Bakaleynik, CEO until 14.7.2019

0

Total Executive Management

100

 

 

As of 31.3.2019

 

Dr. Iosif Bakaleynik, CEO

10 766

Roland Friederich, CFO

100

Total Executive Management

10 866