
Financial report > Consolidated financial statements Geberit Group
Notes to the Consolidated Financial Statements
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1. Basis of preparation
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2. Changes in Group organization
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3. Summary of significant accounting policies
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4. Risk assessment and management
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5. Management of capital
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6. Marketable securities
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7. Trade accounts receivable
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8. Other current assets and current financial assets
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9. Inventories
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10. Property, plant and equipment
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11. Other non-current assets and non-current financial assets
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12. Goodwill and intangible assets
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13. Short-term debt
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14. Other current provisions and liabilities
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15. Long-term debt
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16. Derivative financial instruments
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17. Retirement benefit plans
The Group maintains defined benefit plans for its employees in Switzerland, Germany, Austria, and the USA. These plans are either funded or unfunded. Funded plans are either funded by assets held independently of the Group’s assets in separate trustee-administered funds or by qualifying insurance policies. The net periodic pension costs of the defined benefit plans were as follows:
2012 2011 Funded
plansUnfunded
plansFunded
plansUnfunded
plansMCHF MCHF MCHF MCHF Service cost 26.5 4.7 22.7 4.4 Interest cost on projected benefit obligation 11.7 5.7 12.1 5.9 Expected return on plan assets -14.7 -16.3 Contributions of employees -9.0 -8.2 Net periodic pension cost 14.5 10.4 10.3 10.3 The following table shows the current status of the defined benefit pension plans and the amounts recognized in the Group’s consolidated balance sheets:
2012 2011 Funded
plansUnfunded
plansFunded
plansUnfunded
plansMCHF MCHF MCHF MCHF Benefit obligation At beginning of year 485.1 131.5 430.6 129.4 Service cost 26.5 4.7 22.7 4.4 Interest cost on projected benefit obligation 11.7 5.7 12.1 5.9 Actuarial gains (-)/losses -74.1 24.5 32.1 2.5 New plans 0.0 1.2 0.0 0.0 Translation differences -0.1 -0.9 -0.2 -3.4 Benefits paid -12.1 -5.7 -12.2 -7.3 Benefit obligation at end of year 437.0 161.0 485.1 131.5 Plan assets at fair value At beginning of year 369.4 365.9 Expected return on plan assets 14.7 16.3 Contributions of employees 9.0 8.2 Contributions of employers 13.4 7.4 Benefits paid -11.8 -11.8 Actuarial gains/losses (-) 9.0 -16.5 Translation differences -0.2 -0.1 Plan assets at fair value at end of year 403.5 369.4 Funded status at end of year -33.5 -161.0 -115.7 -131.5 Adjustment according to IAS 19.58 0.0 0.0 0.0 0.0 Total pension asset/obligation (-) -33.5 -161.0 -115.7 -131.5 2012 2011 Funded
plansUnfunded
plansFunded
plansUnfunded
plansMCHF MCHF MCHF MCHF The pension asset/obligation (-) is composed of: Reinsurance policies for pension obligations (see → Note 11) 11.7 10.1 Accrued pension obligations -45.2 -161.0 -125.8 -131.5 Total pension asset/obligation (-) -33.5 -161.0 -115.7 -131.5 The plan assets of funded plans of MCHF 403.5 (PY: MCHF 369.4) are composed of assets of MCHF 391.8 (PY: MCHF 359.3) in two independent Swiss trustee pension funds and MCHF 11.7 (PY: MCHF 10.1) in qualifying insurance policies.
The legal situation relating to pension plans in Switzerland strictly limits the Group’s control over the surplus in the Swiss pension funds. In the case of material underfundings, recapitalization measures have to be taken in which also beneficiaries can be obliged to participate.
As of December 31, 2012, no underfundings existed for Swiss pension plans in compliance with Swiss GAAP FER (FER 26).
The benefit obligations, the plan assets, the funded status, and the net actuarial gains and losses were as follows:
2012 2011 2010 2009 2008 MCHF MCHF MCHF MCHF MCHF Benefit obligations -598.0 -616.6 -560.0 -520.7 -462.2 Plan assets 403.5 369.4 365.9 346.1 314.3 Funded status -194.5 -247.2 -194.1 -174.6 -147.9 Net actuarial gains (-) and losses on benefit obligations -49.6 34.6 36.7 33.8 -0.2 - of which from changes in actuarial assumptions -61.2 38.3 40.1 30.9 -6.5 - of which from experience adjustments 11.6 -3.7 -3.4 2.9 6.3 Experience adjustments on plan assets -9.0 16.5 -0.8 -13.0 76.5 Total actuarial gains (-) and losses in current year -58.6 51.1 35.9 20.8 76.3 Adjustment according to IAS 19.58, gains/losses 0.0 0.0 0.0 0.0 -36.9 Recorded in OCI1, current year -58.6 51.1 35.9 20.8 39.4 Recorded in OCI1 accumulated 180.2 238.8 187.7 151.8 131.0 1 Other comprehensive income The plan assets of the Swiss pension fund are split into the following asset categories (in %) at the end of the year:
2012 2011 Shares 35.1 30.1 Bonds and other debt instruments 22.6 28.2 Real estate property 27.1 29.6 Other 15.2 12.1 Total 100.0 100.0 The expected return on plan assets is calculated based on long-term returns on the investments in the respective asset category. The investments per asset category follow the guidelines defined in the strategic asset allocation policy.
The actual return on these plan assets amounted to +7.6% in 2012 and -0.2% in 2011. As of December 31, 2012, plan assets included MCHF 3.1 (PY: MCHF 2.7) of equity instruments of Geberit AG and MCHF 10.1 (PY: MCHF 10.1) in real estate property used by the Group.
In 2013, the expected employers’ contribution to the plan assets is MCHF 8.1.
The following actuarial assumptions were used for the calculation of the defined benefit obligations and the expected return on plan assets (in %):
2012 2011 CH EU USA CH EU USA Discount rate used in determining present values 1.9 3.0 5.0 2.4 4.5 5.0 Annual rate of increase in future compensation levels 2.0 2.5 3.0 2.0 2.5 3.0 Expected inflation offset 0.0 0-2.0 0.0 1.0 0-2.0 0.0 Expected rate of return on plan assets 4.0 4.5 Demography BVG
2010 GTTables
2005 GBVG
2010 P /
HewittTables
2005 GThe decrease in the discount rate compared to previous year results in a significant increase in the defined benefit obligation. This increase was overcompensated by the adjustments of the economic and demographic assumptions for Swiss pension plans. The expected inflation offset to pensions was reduced from 1% to 0%, as the Swiss pension plans do not longer foresee this compensation. Because of the higher fluctuation rate, the expected employee departure rate is now calculated on the basis of the BVG 2010 tables. To take better account of the increase in life expectancy, the periodic mortality tables were replaced by the generational tables. The impacts of these adjustments were recorded as actuarial gains and losses and are shown in the table “status of the defined benefit pension plans”.
The development of medical costs has no influence on the benefit obligations of the Swiss pension plans and the pension plan in the USA. In Germany and Austria, medical costs indirectly influence the determination of benefit obligations through the employer contributions to the medical insurance for employees. However, the impact on the benefit obligations is not material.
The consolidated income statement also includes expenses for defined contribution plans of MCHF 2.0 in 2012 (PY: MCHF 1.7).
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18. Participation plans
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19. Deferred tax assets and liabilities
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20. Other non-current provisions and liabilities
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21. Contingencies
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22. Capital stock and treasury shares
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23. Earnings per share
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24. Cash discounts and customer bonuses
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25. Other operating expenses, net
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26. Financial result, net
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27. Income tax expenses
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28. Cashflow figures
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29. Segment reporting
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30. Related party transactions
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31. Foreign exchange rates
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32. Subsequent events
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33. Additional disclosures on financial instruments
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34. Group companies as of December 31, 2012