The valuation of provisions in all categories is based on actual data if available (e.g. claims that have occurred or been reported) or on the experience of recent years and management estimates. The deferred tax liabilities are based on temporary valuation differences, which are reported in the balance sheet at the level of GF Corporate Companies.

Includes provisions for employee retirement benefits and other service-related employee benefits which are not provided by pension funds or similar institutions as well as anniversary bonuses and provisions for work accidents. For employee benefits provided by pension funds refer to note 5.1.

Cover expected expenses for warranty benefits such as repairs and replacements. All three divisions provide warranty benefits to their customers: 40% of the provisions relate to GF Machining Solutions (previous year: 39%), 40% to GF Casting Solutions (previous year: 24%) and 20% to GF Piping Systems (previous year: 37%).

Includes all obligations deriving from legal cases and litigations. None of the individual provision should lead to an outflow of more than CHF 10 million (previous year: CHF 6 million).

Summarizes contracts for which the fulfillment leads to unavoidable costs that exceed the associated economic benefits. Onerous contracts concern mainly GF Casting Solutions.

Summarizes provisions for legal and or constructive obligations deriving from restructurings. A constructive obligation arises when a detailed and formal plan for a restructuring exists and a valid expectation in those affected by the restructuring was raised. The increase in provision is related to restructuring and relocation activities in Europe.

Includes all other events that give raise to a provision such as non-warranty claims by customers and risks from business activities not allocated to warranties, legal or onerous contract category.

In the course of their ordinary operating activities, GF Corporate Companies can become involved in litigation. Provisions for pending legal proceedings are measured on the basis of the information available and a realistic estimate of the expected outflow of resources. The outcome of these proceedings may result in claims against the Corporation that cannot be met or cannot be met in full through provisions or insurance cover. If there are any contractual obligations for which the unavoidable costs of meeting the obligations exceed the expected economic benefits (e.g. onerous delivery contracts), provisions are made for the agreed amounts over the entire period or over a prudently estimated period. These provisions are based on management assumptions.

Contingent liabilities amount to CHF 81 million (previous year: CHF 125 million) and include guarantees to related parties in favor of third parties and guarantees to third parties. The decrease is explained by the reduction in guarantees in favor of related parties in relation to the divestments in 2018. The divestment to third parties in 2019 added CHF 5 million to the overall amount.