Annual Report 2014

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Balance sheet

as of per 31 December 2014

CHF million Notes 2014 % 2013 %
Cash and cash equivalents   374   641  
Marketable securities   6   12  
Trade accounts receivable (3) 643   568  
Inventories (4) 666   647  
Income taxes receivable (5) 9   6  
Other accounts receivable (6) 62   63  
Prepayments to creditors   26   16  
Accrued income   15   13  
Assets held for sale (7)     23  
Current assets   1 801 60 1 989 64
Property, plant, and equipment for own use (8) 1 009   965  
Investment properties (8) 44   43  
Intangible assets (9) 27   23  
Deferred tax assets (12) 88   90  
Other financial assets (11) 20   16  
Non-current assets   1 188 40 1 137 36
Assets   2 989 100 3 126 100
Trade accounts payable   419   421  
Bonds (14)     300  
Other financial liabilities (14) 154   149  
Loans from pension fund institutions (14, 15) 27   26  
Other liabilities (16) 69   60  
Prepayments from customers   52   47  
Current tax liabilities   42   43  
Provisions (13) 37   38  
Accrued liabilities and deferred income (17) 181   175  
Liabilities held for sale (7)     23  
Current liabilities   981 33 1 282 41
Bonds (14) 497   496  
Other financial liabilities (14) 56   34  
Pension benefit obligations (15) 131   128  
Other liabilities (16) 51   46  
Provisions (13) 123   120  
Deferred tax liabilities (12) 46   42  
Non-current liabilities   904 30 866 28
Liabilities   1 885 63 2 148 69
Share capital (18) 4   41  
Share premium   33   60  
Treasury shares (20) –9   –9  
Retained earnings   1 029   843  
Equity attributable to shareholders of Georg Fischer Ltd   1 057 35 935 30
Non-controlling interests   47 2 43 1
Equity (18) 1 104 37 978 31
Liabilities and equity   2 989 100 3 126 100

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Income statement

for the year ended 31 December 2014

CHF million Notes 2014 % 2013 %
Sales   3 795 100 3 766 100
Other operating income (24) 45   28  
Income   3 840 101 3 794 101
Cost of materials and products   –1 841   –1 804  
Changes in inventory of unfinished and finished goods       –38  
Operating expenses (25) –665   –658  
Gross value added   1 334 35 1 294 34
Personnel expenses (26) –935   –914  
Depreciation on tangible fixed assets (8) –122   –126  
Amortization on intangible assets (9) –3   –3  
Operating result (EBIT)   274 7 251 7
Interest income (27) 3   3  
Interest expense (27) –39   –36  
Other financial result (27) –6   –12  
Ordinary result   232 6 206 5
Non-operating result (28) 14   1  
Extraordinary result (29)     –26  
Profit before taxes   246 6 181 5
Income taxes (30) –51   –36  
Net profit   195 5 145 4
– Thereof attributable to shareholders of Georg Fischer Ltd   184   139  
– Thereof attributable to non-controlling interests   11   6  
Basic earnings per share in CHF (19) 45   34  
Diluted earnings per share in CHF (19) 45   34  

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Statement of changes in equity

for the year ended 31 December 2014

CHF million Notes Share capital Share premium Treasury shares Cumulative translation adjustments Cash flow hedging Other retained earnings Retained earnings Equity attributable to share holders of Georg Fischer Ltd Non-controlling interests Equity
Balance as of 31 December 2012   41 121 –5 –5 –11 794 778 935 44 979
Net profit             139 139 139 6 145
Translation adjustments recognized in the reporting period         2     2 2 –2  
Changes of cash flow hedges (10, 16)         –6   –6 –6   –6
Goodwill offset via equity (2, 9)           –75 –75 –75   –75
Addition to non-controlling interests (2)                 1 1
Purchase of treasury shares (20)     –9         –9   –9
Disposal of treasury shares (20)   1 2         3   3
Share-related compensation                      
– Transferred for 2012 (20, 31)     3         3   3
– Granted for 2013 (20, 31)           5 5 5   5
Dividends (18)   –62           –62 –6 –68
Balance as of 31 December 2013   41 60 –9 –3 –17 863 843 935 43 978
Net profit             184 184 184 11 195
Translation adjustments recognized in the reporting period         14     14 14 1 15
Changes of cash flow hedges (10, 16)         –12   –12 –12   –12
Goodwill offset via equity (2, 9)                    
Addition to non-controlling interests (2)                 –1 –1
Purchase of treasury shares (20)     –21         –21   –21
Disposal of treasury shares (20)   2 16         18   18
Share-related compensation                      
– Transferred for 2013 (20, 31)     5     –5 –5      
– Granted for 2014 (20, 31)           5 5 5   5
Reduction in par value   –37             –37   –37
Dividends (18)   –29           –29 –7 –36
Balance as of 31 December 2014   4 33 –9 11 –29 1 047 1 029 1 057 47 1 104

Statement of changes in equity as PDF

Statement of cash flows

for the year ended 31 December 2014

CHF million Notes 2014 2013
Net profit   195 145
Income taxes (30) 51 36
Financial result (27) 42 45
Depreciation and amortization (8) 125 129
Impairment on property, plant, and equipment (7, 8, 29)   7
Other non-cash income and expenses   5 4
Increase in provisions, net (13, 29) 22 43
Use of provisions (13) –28 –24
Loss/profit from disposal of tangible fixed assets   –12  
Changes in      
– Inventories   20 –18
– Trade accounts receivable   –36 6
– Other receivables and accrued income   1 –4
– Trade accounts payable   –26 27
– Other liabilities, accrued liabilities and deferred income   –26 –13
Interest paid   –40 –31
Income taxes paid   –45 –43
Cash flow from operating activities   248 309
Additions to      
– Property, plant, and equipment (8) –152 –130
– Intangible assets (9) –5 –6
– Other financial assets   –4 –7
Disposals of      
– Property, plant, and equipment (8) 19 4
– Intangible assets (9) 1  
– Other financial assets   2 2
Purchase/disposal of marketable securities   –1  
Cash flow from acquisitions (2) –22 –65
Cash flow from divestitures (2) 2 –1
Interest received   2 2
Cash flow from investing activities   –158 –201
Free cash flow   90 108
Purchase of treasury shares   –21 –9
Disposal of treasury shares   18 3
Par value reduction paid   –37  
Dividend payments to shareholders of Georg Fischer Ltd   –29 –62
Dividend payments to non-controlling interests   –7 –6
Issuance of bonds (14)   298
Repayment of bonds (14) –300  
Issuance of long-term financial liabilities (14) 12 11
Repayment of long-term financial liabilities (14) –9 –29
Changes in short-term financial liabilities   5 1
Cash flow from financing activities   –368 207
Translation adjustment on cash and cash equivalents   11 –4
Net cash flow   –267 311
Cash and cash equivalents at beginning of year   641 330
Cash and cash equivalents at year-end1   374 641

1 Cash, postal and bank accounts: CHF 367 million (previous year: CHF 319 million), fixed-term deposits: CHF 7 million (previous year: CHF 322 million).

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Notes to the consolidated financial statements

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Corporate accounting principles

Accounting policies

General //

The consolidated financial statements of Georg Fischer Ltd have been prepared in accordance with the entire existing guidelines of Swiss GAAP FER (Generally Accepted Accounting Principles/FER = Fachempfehlung zur Rechnungslegung). The regulations of Swiss GAAP FER 31 “Complementary Recommendation for Listed Public Companies” have been adopted early. Furthermore, the accounting complies with the provisions of the listing rules of the SIX Swiss Exchange and with Swiss company law. The consolidated financial statements are based on the financial statements of the GF Corporate Companies for the year ended 31 December, prepared in accordance with uniform corporate accounting principles.

Furthermore, the consolidated financial statements have been prepared in accordance with the purchase cost method with the exception of marketable securities, participations under 20%, and derivative financial instruments, which are measured at fair value. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the consolidated financial statements. If in the future such estimates and assumptions, which are based on management’s best judgment at the closing date, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.

Definition of non-Swiss GAAP FER measures //

The subtotal “Gross value added” includes all operating income less cost of materials and products, changes in inventory, and operating expenses. 

As the subtotal “Gross value added” is a major key figure for GF; it is reported separately in the income statement. 

“Free cash flow” consists of cash low from operating activities and cash low from investing activities together and is reported separately in the statement of cash lows. 

“Free cash flow” is not only an important performance indicator for GF but is also a generally accepted and widely used performance figure in the financial sector.

Scope and principles of consolidation //

The scope of consolidation includes Georg Fischer Ltd and all Swiss and foreign Corporate Companies which the parent company, directly or indirectly, controls either by holding more than 50% of the voting rights or by otherwise having the power to govern their operating and financial policies. Those entities are fully consolidated, whereby assets, liabilities, income, and expenses are incorporated in the consolidated accounts. Intercompany balances and transactions (accounts receivable, accounts payable, income, and expenses) are eliminated upon consolidation. Non-controlling interests in the equity and net income of consolidated companies are presented separately but as a component of consolidated equity and consolidated net income, respectively. Gains arising from intercompany transactions are eliminated in full. Capital consolidation is based on the acquisitions method, whereby the acquisition cost of a Corporate Company is eliminated at the time of acquisition against the fair value of net assets acquired, determined according to uniform corporate accounting principles.

Companies acquired are consolidated from the date on which control is obtained, while companies sold are excluded from the scope of consolidation as of the date on which control is given up, with any gain or loss recognized in income.

Joint ventures in which the GF Corporation exercises joint control together with a joint venture partner are treated according to the method of proportionate consolidation.

Companies in which the GF Corporation has a non-controlling interest of at least 20% but less than 50%, or over which it otherwise has significant influence, are included in the consolidated financial statements using the equity method of accounting and presented as investments in associates. Investments with a voting power of less than 20% are stated at fair value and presented under other financial assets.

Sales and revenue recognition //

Billings for goods and services are recognized as sales when they are delivered or when the risks and benefits incidental to ownership are transferred. An assessment as to whether the principal risks and opportunities were transferred for a particular delivery is made separately for each sales transaction on the basis of the contractual agreement underlying the transaction. The transfer of legal ownership alone does not necessarily result in the transfer of the principal risks and opportunities. This is the case, for instance, if 

  • the recipient of the delivery has a claim for insufficient quality of the item delivered that goes beyond the normal warranty claims 
  • the receipt of the proceeds depends on the sale of the goods by the buyer 
  • the installation of the goods at the recipient’s is an essential
    part of the contract 
  • the buyer has the right to return the item for a contractually specified reason and the likelihood of such a return cannot be assessed with any certainty.

Services rendered are booked as sales depending on the degree of their completion if the result of the service can be reliably assessed.

Sales are stated before value-added tax, sales tax, and after any deduction of discounts and credits. Appropriate warranty provisions are recognized for anticipated claims.

Foreign currencies //

Corporate Companies prepare their financial statements in their functional currency. Monetary assets and liabilities held in foreign currencies are translated at the spot rate on the balance sheet date. Foreign exchange gains and losses resulting from transactions and from the translation of balance sheet items denominated in foreign currencies are reported in the income statement. Derivative financial instruments used to hedge such balance sheet items are stated at fair value. In hedging contractually agreed future cash flows (hedge accounting), the effective portion of changes in the derivative financial instruments’ fair value is recognized in equity with no effect on the income statement. An ineffective portion is therefore recognized in the income statement. As soon as an asset or liability results from the hedged underlying transaction, the gains and losses previously recognized in equity are derecognized and transferred at the same time with the valuation effect from the hedged underlying transaction to the income statement.

The consolidated financial statements are prepared and presented in Swiss francs. For consolidation purposes, the financial statements of the foreign entities are translated into Swiss francs as follows: balance sheets at year-end rates, income and cash flow statements at average rates for the year under review. Any translation differences resulting from the different translation of balance sheets and income statements or from the translation of equity-like corporate loans denominated in foreign currencies are recognized in equity. On divestment of a foreign subsidiary, the relevant cumulative exchange differences are transferred to the income statement.

Maturities //

Assets that are either realized or consumed in the course of the Corporation’s normal operating cycle within one year or held for trading are included in current assets. All other assets are included in non-current assets.

All liabilities that the Corporation intends to settle in the course of its normal operating cycle or that fall due within one year of the balance sheet date are included in current liabilities. All other liabilities are included in non-current liabilities.

Segment information //

In accordance with the management structure and the reporting made to the Executive Committee and the Board of Directors, the reportable segments are the three operating divisions GF Piping Systems, GF Automotive, and GF Machining Solutions. GF Piping Systems develops, manufactures, and distributes piping systems for industry, utility, and building technology. GF Automotive produces castings for the automotive industry. GF Machining Solutions develops, manufactures, and distributes electric discharge machines, milling machines, laser machines, and automation solutions. GF Machining Solutions also provides services for these products. Business units within these segments have been aggregated as a single reportable segment because they manufacture similar products with comparable production processes and supply them to similar customer groups using similar distribution methods. Segment accounting is prepared up to the level of operating result (EBIT) because this is the key figure used for management purposes. All operating assets and liabilities that are directly attributable or can be allocated on a reasonable basis are reported in the respective divisions. No distinction is made between the accounting policies of segment reporting and those of the consolidated financial statements.

Cash and cash equivalents //

Cash and cash equivalents are stated at nominal value. They include cash on hand, postal and bank accounts, and fixed-term deposits with an original maturity of up to 90 days.

Marketable securities //

Marketable securities include investments held for trading and derivative financial instruments. Acquisitions and disposals are recognized on the trade date, rather than the settlement date. Held-for-trading investments are stated at market value, unrealized gains and losses being recognized in the income statement and presented in the financial result.

Derivative financial instruments //

Derivative financial instruments are reported under marketable securities and other current liabilities, respectively. Foreign currency and interest rate risks are hedged by the Corporation using forward exchange contracts, currency options, and swaps. Foreign currency risks related to highly probable future cash lows from sales in foreign currencies are hedged in particular with cash low hedges.

Accounts receivable //

Short-term accounts receivable are stated at nominal value. Value adjustments for doubtful debts are established based on maturity structure and identifiable solvency risks. Besides individual value adjustments with respect to specific identifiable risks, value adjustments are also recognized based on statistically determined credit risks. 

Inventories //

Goods held for trading are generally stated at average cost and internally manufactured products at manufacturing cost, including direct labor and materials used, as well as a commensurate share of related overhead costs. If the net realizable value is lower, valuation adjustments are made accordingly. Cash discount deductions are treated as purchase cost reductions. Inventories with an unsatisfactory turnover are partly or fully adjusted in value.

Property, plant, and equipment //

Items of property, plant, and equipment are stated at cost or manufacturing cost less depreciation and impairment. Borrowing costs for the financing of assets under construction are part of the costs of the asset if they are material. Assets acquired under finance lease contracts are capitalized at the lower of minimum lease payments and fair value. The related outstanding finance lease obligations are presented under liabilities. Assets are depreciated on a straight-line basis over their estimated useful lives or lease terms: investment properties and buildings 30 to 40 years, building components 8 to 20 years, machinery and production equipment 6 to 20 years, and other equipment (vehicles, IT systems, etc.) 1 to 5 years. Assets under construction are usually not depreciated. Assets held under finance lease are described in the section “Leases”. Where components of larger assets have different useful lives, these components are depreciated separately. Useful lives and residual values are reviewed annually on the balance sheet date and any adjustments are recognized in the income statement. Any gains or losses on the disposal of items of property, plant, and equipment are recognized in the income statement.

Intangible assets //

Acquired licenses, patents, and similar rights are capitalized and, with the exception of land use rights, are amortized on a straight-line basis over their estimated useful lives of 3 to 15 years. Land use rights are amortized over the duration of the usage rights granted. On this position, useful lives are up to 50 years. Software is amortized on a straight-line basis over the estimated useful lives of 1 to 5 years. 

In the event of company acquisitions, goodwill at the date of acquisition is calculated as follows: the fair value of the net assets, plus transaction costs incurred in connection with the company acquisitions, plus the value of the minority interests in the acquired company, less the value of the acquired net assets carried on the balance sheet. 

The positive or negative goodwill resulting from acquisitions is offset in equity at the date of acquisition against retained earnings. On the disposal of a portion of the company, the goodwill previously offset in equity is transferred to the income statement. If the purchase price contains elements that are dependent on future results, they are estimated as closely as possible at the date of acquisition and recognized in the balance sheet. In the event of disparities when the definitive purchase price is settled, the goodwill offset in equity is adjusted accordingly. The consequences of a theoretical capitalization and amortization of goodwill are explained in note 9. 

Other financial assets //

Other financial assets mainly comprise loans to third parties, non-controlling interests of less than 20% held over the longer term, and pension assets. Loans are stated at amortized cost less valuation adjustments; the related interest income is recognized using the effective interest method. Non-controlling interests are stated at their estimated fair value.

Liabilities //

Trade accounts payable as well as other liabilities are stated at nominal value.

Employee benefit plans //

Employee benefit plans in the Corporation comply with the legislation in force in each country. These plans are usually organized as foundations that are financially independent of the Corporation. Pension funds are generally inanced by employee and employer contributions. 

The economical impact of the employee beneit plans is assessed each year. Surpluses or deficits are determined by means of the annual statements of the particular benefit plan, which are based either on Swiss GAAP FER 26 for Swiss plans or on accepted methods in each foreign country for foreign plans. An economic benefit is capitalized if the surplus is used to reduce the employee contributions and in case this is permissible and intended. 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.

Provisions //

Provisions are recognized for any present obligation incurred as a result of a past event if it is probable that an outlow of resources will be required to settle the obligation and the amount can be estimated reliably.

Taxes //

Taxes are accrued for all tax obligations, irrespective of their due date. Current income taxes are calculated on the taxable profit. Deferred taxes are calculated by applying the balance sheet liability method for any temporary difference between the carrying amount according to Swiss GAAP FER and the tax basis of assets and liabilities. Tax loss carryforwards are recognized only to the extent that it is probable that future taxable profits or deferred tax liabilities will be available against which they can be offset. Calculation of deferred taxes is based on the country-specific tax rates. Tax assets and liabilities are offset if they concern the same taxable entity and tax authority and if there exists an offset entitlement for current taxes. No deferred tax is provided on temporary differences on investments in subsidiaries where the timing of the reversal of the temporary diference is controlled by the Corporation and it is probable that the temporary diference will not reverse in the foreseeable future.

Leases //

The present value of finance leases is recognized in the non-current assets and in the other financial liabilities on the balance sheet if the significant contractual risks and rewards have been transferred to the consolidated entity. Lease installments are divided into an interest and a redemption component based on the annuity method. Assets held under such finance leases are depreciated over the shorter of their estimated useful life and the lease term. Operating lease installments are charged to the income statement on a straight-line basis over the lease term.

Financial liabilities //

Financial liabilities comprise bank loans, mortgages, convertible, and other bonds. They are carried at amortized cost. Borrowing costs are recognized in the income statement using the effective interest method, with the exception of borrowing costs that can be allocated directly to the construction, build- p, or purchase of a qualifying asset. These borrowing costs are capitalized as part of the costs of this asset.

Research and development //

All research costs are recognized in the income statement as incurred. Development costs are recognized as an asset only to the extent that the following specific recognition criteria are cumulatively met: 

  • costs are clearly defined, clearly attributable to the product or process, and can be separately identified and measured reliably 
  • technical feasibility can be demonstrated 
  • the company intends to produce and market or use the product or process 
  • the existence of a market can be demonstrated 
  • adequate resources exist or their availability can be demonstrated to complete the project and market or use the product or process 
  • the amount recognized is recoverable through future cash lows

Impairment //

The recoverable amount of non-current assets (especially property, plant, and equipment, intangible assets, financial assets as well as the goodwill reported in the sample accounting in note 9) is reviewed at least once a year. If there is any indication of an impairment, an impairment test is performed immediately.  If the carrying amount exceeds the recoverable amount, an impairment loss is recognized in the income statement.  As the goodwill is already offset with equity at the date of the acquisition, an impairment of the goodwill does not affect the income statement but leads to a disclosure in the notes only.

Contingent liabilities //

Contingent liabilities are assessed on the basis of likelihood and the amount of the future liabilities and are disclosed in the notes.

Assets held for sale //

Assets and disposal groups are classified as “held for sale” if the asset’s carrying amount is to be recovered principally by a sales transaction rather than by continued use. 

For this purpose, such assets or disposal groups are recognized as a separate item in current assets. The assets are reclassified only if and when management has decided on the disposal and has begun to look for buyers. Moreover, the asset or disposal group must be available for immediate sale in its current condition, and it must be highly likely that the disposal will take place within a year. 

Assets or disposal groups that are classified as “held for sale” are stated at the lower of carrying amount or fair value less costs to sell, and any impairments from the initial classification as “held for sale” are recognized in the income statement. Moreover, assets and disposal groups “held for sale” are no longer amortized on a straight-line basis from the time of reclassification. Current and deferred taxes paid on divestiture gains are to be reported as income tax expense.

Debt from the sale of assets held for sale is to be reported separately from other debt in the balance sheet and may not be ofset against assets. The debt is carried at amortized cost.

Discontinued operations //

Discontinued operations are reported as soon as a part of the company with business activities and cash inflows and outflows that can be clearly delimited from the rest of the company operationally and for the purposes of accounting is classified as held for sale or has already been disposed of, and this part of the company either

  • represents a separate major line of business or geographical area of operations and 
  • is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations and 
  • represents an independent technology 

The sales and the operating result (EBIT) from discontinued operations is disclosed separately in the notes. The disclosure includes the prior-year figures (as if the operation had been disposed of at the beginning of the reference year).

Information in connection with the discontinued operation is set out separately in notes 2 and 29.

Treasury shares, share-related compensation, and earnings per share //

Treasury shares are stated at cost as a separate minus position in equity. Gains or losses arising on the disposal of treasury shares are espectively credited to or deducted from the elated share premium.

Share-related compensation to members of the executive Committee and senior management are measured at fair value at the grant date and recognized as a personnel expense in the period in which the service is performed.

Earnings per share is calculated by dividing the portion of net income attributable to Georg Fischer Ltd shareholders by the weighted average number of shares outstanding in the reporting period. Diluted earnings per share takes into account any potential shares that may result from exercised option or conversion rights.

Management assumptions and estimates

Significant accounting policies //

Preparation of financial statements requires management to make estimates and assumptions that could materially affect the consolidated financial statements of GF, particularly with regard to the items described below, should actual results differ from these management estimates and assumptions.

Impairment of non-current assets //

Non-current assets and intangible assets are reviewed whenever there are indications that, due to changed circumstances or events, their carrying amount may no longer be recoverable. If such a situation arises, the recoverable amount is determined on the basis of expected future inflows. It corresponds to either the discounted value of expected future net cash lows or the expected net selling price. If the recoverable amount is below the carrying amount, a corresponding impairment loss is recognized in the income statement. The main assumptions on which these measurements are based include growth rates, margins, and discount rates. The cash inflows actually generated can differ considerably from discounted projections. The carrying amounts and information regarding impairments of the items of property, plant, and equipment and intangible assets affected are set out in notes 8 and 9.

Provisions for warranties and onerous contracts //

In the course of their ordinary operating activities, 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 outlow of resources. The outcome of these proceedings may result in claims against the Corporation that cannot be met at all or in full through provisions or insurance cover.

If there are any contractual obligations for which the unavoidable costs of meeting the obligations under the contract exceed the expected economic beneits to be received (e.g. onerous delivery contracts), provisions for the agreed quantities over the whole or prudently estimated period are made. These provisions are based on management assumptions. The carrying amounts of these provisions are set out in note 13.

Income taxes //

Current tax liabilities are measured on the basis of an interpretation of the tax regulations in place in the relevant countries. The adequacy of this interpretation is assessed by the tax authorities in the course of the final assessment or tax audits. This can result in material changes to tax expense. Furthermore, in order to determine whether tax loss carryforwards may be carried as an asset, it is first necessary to critically assess the probability that there will be future taxable profit against which to offset them. This assessment depends on a variety of influencing factors and developments. The carrying amounts of current and deferred tax assets and liabilities are disclosed in the consolidated balance sheet. 

Risk management

Enterprise risk management as a fully integrated risk management process was systematically applied in 2014 at all levels of the Corporation. The three divisions, the Corporate Staff, and all important Corporate Companies prepared a semi-annual risk map elaborating on the most important 25 to 30 risks with regard to the topics of strategy, markets, operations, management and resources, inancials as well as sustainability.  

The structure of the likelihood was classified into four categories. Whenever possible and suitable, the risks listed were quantified taking into consideration already planned and executed measurements. Alternatively, a qualification of the risk exposure was applied.

The Risk Council, consisting of representatives of the divisions and the Corporate Staf and headed by the Chief Risk Officer, met for two meetings and dealt with the following topics: optimization of the recently implemented reporting tool, business continuity management, link of strategic planning and enterprise risk management, coordination of all activities in the area of enterprise risk management, and analysis of risk maps.

In accordance with the semi-annual risk reporting process, the Executive Committee and the management of the divisions discussed the risk maps twice during the year under review. They defined the top risks of the Corporation and the divisions and determined adequate measures to mitigate the risks. The Board of Directors dealt with enterprise risk management in February and September 2014 to analyze the corporate and divisional risk maps and to deine the top risks and the measures to mitigate these risks.

The stepwise procedure, including workshops at the levels of division management, Executive Committee and Board of Directors, has proven to be very effective. Additionally, having Internal Auditing assess the risk maps prepared by the Corporate Companies has led to a clear improvement in reporting quality.

The following were identified as key risks: lack of achievement of strategic financial targets 2015 leading to a loss of reputation, cyclicality of certain business units of the divisions considering a potential slow down of the markets, product quality, and product competitiveness, and the development of foreign currencies.

Clear measures in order to reduce the risk exposure of the factors mentioned above as well as other identified risks were defined and are in the process of execution. They are in line with strategic targets of the three divisions and the Corporation. 

Financial risk management

The Board of Directors bears ultimate responsibility for financial risk management. The Board of Directors has tasked the Audit Committee with monitoring the development and implementation of the risk management principles. The Audit Committee reports regularly to the Board of Directors on the current status.

The risk management principles are geared to identifying and analyzing the risks to which the Corporation is exposed and to establishing the appropriate control mechanisms. The principles of risk management and the processes applied are regularly reviewed, taking due regard of changes in the market and in the Corporation’s activities. The ultimate goal is to develop controls, based on the existing training and management guidelines and processes, that ensure a disciplined and conscious approach to risks. The Audit Committee is supported by the Head of Finance & Controlling in this task. 

Owing to its business activities, GF is exposed to various financial risks such as credit risk, market risk (including currency, interest rate, and price risk), and liquidity risk. The following sections provide an overview of the extent of the individual risks and the goals, principles, and processes employed for measuring, monitoring, and hedging the financial risks.

More information in the PDF Consolidated financial statement: download area



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Affiliated companies

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Report of the Statutory Auditor

As statutory auditor, we have audited the consolidated financial statements of Georg Fischer Ltd, which comprise the consolidated balance sheet, consolidated income statement, consolidated statement of changes in equity, consolidated cash flow statement and notes (pages 64 to 108), for the year ended 31 December 2014.

Board of Directors’ responsibility

The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


In our opinion, the consolidated financial statements for the year ended 31 December 2014 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with Swiss GAAP FER and comply with Swiss law.

Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Zurich, 13 February 2015


PricewaterhouseCoopers Ltd

Stefan Räbsamen
Audit expert
Auditor in charge

Diego J. Alvarez
Audit expert