5. Other information

5. Other information

This section provides other information and disclosures not included in other sections for example information about the employee benefits obligations. It also includes an overview of the balance-sheet related deferred tax assets and liabilities and finally significant events occuring after reporting date.

5.1 Employee benefit liabilities

5. Other information

This section provides other information and disclosures not included in other sections for example information about the employee benefits obligations. It also includes an overview of the balance-sheet related deferred tax assets and liabilities and finally significant events occuring after reporting date.

5.1 Employee benefit liabilities

Economic benefit/economic obligation and pension benefit expenses

 

 

 

 

2017

 

2016

 

 

 

 

 

 

 

2017

 

2016

CHF million

 

Surplus/ deficit according to FER 26

 

Economic part of the Corporation

 

Economic part of the Corporation

 

Translation differences

 

Change to prior-year period or recognized in the current result of the period, respectively

 

Contri- butions concering the business period

 

Pension benefit expenses within personnel expenses

 

Pension benefit expenses within personnel expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patronage funds

 

12

 

 

 

 

 

 

 

 

 

1

 

1

 

1

Employee benefit plans w/o surplus/deficit

 

 

 

 

 

 

 

 

 

 

 

13

 

13

 

12

Employee benefit plans with surplus

 

24

 

 

 

 

 

 

 

 

 

9

 

9

 

9

Employee benefit plans with deficit

 

–24

 

–20

 

–20

 

1

 

–1

 

1

 

 

4

Employee benefit plans without own assets

 

 

 

–107

 

–99

 

8

 

–1

 

2

 

1

 

1

Loans from pension fund institutions

 

 

 

–28

 

–29

 

2

 

 

 

 

 

 

 

 

Total

 

12

 

–155

 

–148

 

11

 

–2

 

26

 

24

 

27

The table shows the economic benefit and the economic obligation at the end of the year under review and for the previous year, as well as the development of pension benefit expenses.

The employee benefit plans with surplus in the amount of CHF 24 million (previous year: CHF 5 million) relate to the pension fund of GF Machining Solutions. The performance of the financial assets shows a positive development in the year under review. The employee benefit plans with a deficit in the amount of CHF 24 million (previous year: CHF 25 million) relate to the defined benefit plans in the UK and the USA. The amount of the deficit depends largely on the value of the securities and on the discount rate applied to determine the pension obligations. The entire economic obligation covering the outflow of funds anticipated in the medium term corresponds to the reported deficit and amounts to CHF 20 million (previous year: CHF 20 million). The economic obligation for employee benefit plans without own assets, i.e. unfunded plans, as recognized in the balance sheet, amounts to CHF 107 million (previous year: CHF 99 million) and relates mainly to employee benefit plans in Germany. The loans from pension fund institutions in the amount of CHF 28 million (previous year: CHF 29 million) are from pension fund institutions in Germany that have invested their funds in Corporate Companies.

The following table summarizes the pension benefit expenses in the year under review and for the previous year:

CHF million

 

2017

 

2016

 

 

 

 

 

Contributions to employee benefit plans from Corporate Companies

 

26

 

24

Contributions to employee benefit plans from employer contribution reserves

 

 

 

1

Total contributions

 

26

 

25

+/- Change in ECR from asset developments, value adjustments, etc.

 

 

 

 

Contributions and change in employer contribution reserves

 

26

 

25

 

 

 

 

 

Decrease/increase in economic benefit of the Corporation from surplus

 

 

 

 

Increase/decrease in economic obligation of the Corporation from deficit

 

–1

 

 

Increase/decrease in economic obligation of the Corporation (employee benefit plans without own assets)

 

–1

 

2

Total change in economic effect of surplus/deficit

 

–2

 

2

Pension benefit expenses within personnel expenses in the period under review

 

24

 

27

The change in the economic obligation from employee benefit plans and the employer contributions paid for the year under review, as recognized in the balance sheet, amount to CHF 24 million (previous year: CHF 27 million) and are included in the “Personnel expenses”.

Accounting principles

The employee benefit plans of the Corporation comply with the legislation in force in each country. Employee benefit plans are mostly institutions and foundations that are financially independent of the Corporation. They are usually financed by both, employee and employer contributions.

The economic impact of the employee benefit plans is assessed each year. Surpluses or deficits are determined by means of the annual statements of each specific benefit plan, which are based either on Swiss GAAP FER 26 (Swiss benefit plans) or on the accepted methods in each foreign country (foreign plans). An economic benefit is capitalized if it is permitted and intended to use the surplus to reduce the employee contributions. If employer contribution reserves exist, they are also capitalized. An economic obligation is recognized as a liability if the conditions for an accrual are met. They are reported under “Employee benefit obligations”. Changes in the economic benefit or economic obligation, as well as the contributions incurred for the period, are recognized in “Personnel expenses” in the income statement.

5.2 Long-term loans and receivables

5.2 Long-term loans and receivables

Other financial assets amount to CHF 13 million and include long-term loans and receivables in the amount of CHF 9 million (previous year: CHF 5 million), long-term-invested securities for the settlement of pension liabilities in the amount of CHF 3 million (previous year: CHF 3 million) as well as investments in associates.

5.3 Deferred tax assets and liabilities

5.3 Deferred tax assets and liabilities

CHF million

 

Tax assets

 

Tax liabilities

 

2017 net

 

Tax assets

 

Tax liabilities

 

2016 net

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment properties

 

 

 

7

 

–7

 

 

 

7

 

–7

Property, plant, and equipment for own use

 

11

 

34

 

–23

 

11

 

37

 

–26

Intangible assets

 

2

 

2

 

 

3

 

1

 

2

Tax loss carryforwards

 

4

 

 

 

4

 

5

 

 

 

5

Inventories

 

24

 

14

 

10

 

26

 

15

 

11

Provisions

 

14

 

4

 

10

 

16

 

4

 

12

Other interest-bearing liabilities

 

2

 

 

2

 

4

 

2

 

2

Other non-interest-bearing liabilities

 

41

 

9

 

32

 

33

 

8

 

25

Other balance sheet items

 

14

 

4

 

10

 

14

 

3

 

11

Total

 

112

 

74

 

38

 

112

 

77

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

Offsetting

 

–27

 

–27

 

 

 

–32

 

–32

 

 

Deferred tax assets/liabilities

 

85

 

47

 

38

 

80

 

45

 

35

Deferred tax assets and liabilities are offset within Corporate Companies when there is a legally enforceable right to offset current tax assets against current tax liabilities and the deferred taxes relate to the same fiscal authority. The effect of offsetting at the Corporate Company level amounted to CHF 27 million (previous year: CHF 32 million). Deferred tax assets and liabilities are calculated based on the actually expected income tax rates for each Corporate Company. For further information on the recognition of tax loss carryforwards, see note 1.4.

Temporary differences associated with investments in subsidiaries, for which no deferred tax liabilities have been recognized, amounted to CHF 437 million as of 31 December 2017 (previous year: CHF 378 million).

5.4 Events after the balance sheet date

5.4 Events after the balance sheet date

The consolidated financial statements were approved and released for publication by the Board of Directors on 22 February 2018. They must also be approved at the Annual Shareholders’ Meeting.

On 31 January 2018, GF announced the acquisition of 100% of Precicast Industrial Holding SA, the Swiss-based precision casting specialist. In order to better reflect its portfolio evolution, the division GF Automotive will, upon closing expected for the first quarter of 2018, be renamed GF Casting Solutions.

Precicast generated in 2017 sales of approximately CHF 120 million with a workforce of 730 employees in Switzerland and Romania. Closing is subject to the approval of the relevant authorities.

There were no events between 31 December 2017 and 22 February 2018 that would require an adjustment to the carrying amounts of assets and liabilities and equity or would need to be disclosed under this heading.