ANNUAL REPORT 2019
Notes to the Financial Statements of feintool international holding ag
as at December 31, 2019
Feintool International Holding AG has its headquarters in Lyss, Switzerland. The 2019 financial statements were prepared in accordance with the provisions of Swiss accounting law (Art. 32 of the Swiss Code of Obligations). The main applied valuation principles that are not required by law are described in the following.
Treasury shares are recognized at the time of acquisition at cost as a minus line item in equity. In the event of resale, the profit or loss is taken to equity and reported under free retained earnings.
Capital participation plans
Treasury shares are used for share-based payments to the Board of Directors and employees. They are recognized at a fixed price in the regulations for the issue and transferred to the entitled beneficiary. The corresponding expense including social security contributions is reported in personnel expenses.
In accordance with the principle of substance over form, all of the company’s leases and rental agreements with third parties will be recognized on the balance sheet from the 2019 financial year onwards, with the exception of short-term contracts (12 months or less) and low-value assets. Up to and including the 2018 financial year, such leases were recognized in the income statement in each accounting period in which the resulting expense was incurred.
Beginning in the 2019 financial year, the right-of-use asset will be capitalized on the balance sheet. Afterwards, the right-of-use asset will be amortized on a straight-line basis from the date of commencement to the end of the lease term unless ownership of the underlying asset is transferred to the company at the end of the lease term or the cost of the lease reflects the fact that the company will exercise a purchase option. In this case, the right-of-use asset is amortized over its useful economic life, which is determined in accordance with the rules for property, plant, and equipment. Upon initial recognition, the right-of-use asset is measured at the present value of the lease liability upon commencement of the lease term. The lease liability corresponds to the present value of future lease payments discounted at an average interest rate of 1.3 % and reduced by the amortization payments.
Short-term leases (<1 year) and low-value leases continue to be recognized under other operating expenses in each accounting period in which resulting expenses are incurred.
Intercompany rental and lease agreements continue to be recognized as rental and lease expenses in each accounting period in which resulting expenses are incurred. This means that the right-of-use asset leased under such contracts is not capitalized, nor is a lease liability recognized. A total of CHF 192 000 is recognized as an expense from such contracts in the income statement for 2019.
Omission of cash flow statement and additional information in the Notes to the Financial Statements
Feintool International Holding AG prepares its consolidated financial statements in accordance with a recognized standard for accounting (IFRS) and consequently omits additional disclosures in the Notes to the Financial Statements and a report on the cash flow statement in these financial statements as set forth in the statutory provisions.
1 Trade and other receivables
1) Interest bearing receivable related to zero balance cash pools
2 prepaid expenses and accrued income
3 property, plant and equipment
3.1 Own property, plant and equipment
3.2 Property, plant and equipment in lease
In accordance with the principle of substance over form, leases will be recognized on the balance sheet beginning in the 2019 financial year, which includes all rental and lease contracts with third parties with the exception of short-term contracts (12 months or less) and low-value assets.
4 intangible assets
5 financial assets
1) Feintool Automotive System Parts (Tianjin) Co. Ltd. carried out a capital increase in the amount of EUR 12 million in the financial year 2018.
2) Feintool Holding GmbH holds a 60 % stake in Feintool System Parts Ohrdruf GmbH. The remaining 40 % is held by Feintool International Holding AG.
3) On July 31, 2018, Feintool Holding GmbH, Bayreuth, Germany, acquired 100 % of the shares of the German company Stanzwerk Jessen GmbH with its subsidiaries Jela GmbH, SLTJ GmbH and Stanz- und Lasertechnik Jessen GmbH. SLTJ GmbH merged after that with Stanz- und Lasertechnik GmbH. The name of Stanz- und Lasertechnik Jessen GmbH was then changed to Feintool System Parts Jessen GmbH.
4) Jela Immobilien GmbH holds a 90 % interest in Vireo Verwaltungsgesellschaft mbH. The remaining 10 % is held by HL Holding AG. In the 2019 financial year, 90 % of Vireo Verwaltungsgesellschafts mbH was sold by HL Holding AG to Jela Immobilien GmbH.
5) The dissolution of Feintool (Chongquing) Technology Co. Ltd. was applied for on January 1, 2015.
7 Current interest-bearing liabilities
1) Interest bearing liabilities related to zero balance cash pools.
8 trade and other current payables
9 accrued expenses and deferred income
10 Non-current financial liabilities
1) On June 13, 2017, Feintool signed a syndicated loan with six banks amounting to CHF 90 million with an option to increase by another CHF 60 million. On May 17, 2018, this contract was extended and will now run until June 13, 2023. On December 31, 2019, CHF 44.5 million of the syndicated loan was used by Feintool International Holding AG (previous year CHF 34.1 million). Any drawdowns by subsidiaries are guaranteed by Feintool International Holding AG up to a maximum amount of CHF 99 million. In accordance with the principle of substance over form, the syndicated loan will be reported as a noncurrent interest-bearing liability to third parties starting in 2019.
11 non-current Provisions
Non-current provisions include provisions for insurance payments in the amount of kCHF 490 (previous year kCHF 383) and provisions for anniversary benefits of kCHF 107 (previous year kCHF 126).
12 share capital
12.1 Share capital
On September 20, 2018, 451 871 new shares, each with a nominal value of CHF 10, were issued as part of the capital increase.
12.2 General legal reserves from capital contributions
The statutory reserves from capital contributions include the premium from capital increases, less the previous dividend distributions. The distribution from reserves from capital contributions is treated in the same way as the repayment of capital for tax purposes. The Swiss Federal Tax Administration (FTA) has confirmed that the reported reserve from capital contributions is recognized as a capital contribution pursuant to Art. 5 (1bis) Swiss Withholding Tax Act.
13 Conditional capital – employee stock option plan
The disclosure of the conditional capital is represented in Note 25.3 on page 66 of the Notes to the Financial Statements.
14 AUTHORIZED SHARE CAPITAL
The disclosure of authorized share capital is reported in the Notes to the consolidated financial statements under Note 25.4 on page 67.
15 treasury shares
The disclosure of the treasury shares is represented in Note 25.5 on page 67 of the Notes to the Financial Statements.
16 operating income
17 financial income
18 personnel expenses
Feintool International Holding AG employed 33 staff at the end of the year (previous year 34; calculated in Full Time Equivalents).
19 other operating expenses
20 financial expenses
1) Besides bank charges, other financial expenses include lead syndication commissions (annual amortization of establishing cost for the syndicated loan), valuation expenses from currency hedges and market making costs.
21 Prior-period Expenses
Prior-period expenses relates to prior-period expenses from intercompany services.
22 Contingent liabilities in favor of third parties
On July 15, 2016, a promissory note was issued in the amount of EUR 65 million. The issuer, with a guarantee from Feintool International Holding AG, is Feintool Holding GmbH based in Germany.
23 Major shareholders
The disclosure of the major shareholders is represented in Note 32 on page 75 of the Notes to the Financial Statements.
24 SHAREHOLDINGS OF GROUP MANAGEMENT AND THE BOARD OF DIRECTORS INCLUDING RELATED PARTIES
1) Held directly and indirectly; the 5 000 shares with a value of CHF 298 000 as remuneration for the 2019 financial year were assigned on January 3, 2020.
2) The General Meeting on April 24, 2018, elected Norbert Indlekofer to the Board of Directors.
The shares are valued at a price of CHF 61.80 (previous year: CHF 75.20) as of December 31, 2019. This results in a total value of kCHF 2 898 (previous year: kCHF 2 814).
25 Liabilities to employee benefit plans
There was no liability to the pension fund as of December 31, 2019 (previous year kCHF 0).
26 Events after the balance sheet date
There were no significant events after the balance sheet date.
27 PROPOSAL by THE BOARD OF DIRECTORS
The Board of Directors will propose to the Annual General Meeting an ordinary dividend of CHF 0.50 per registered share.
In addition to the ordinary dividend as proposed above, the Board of Directors will request that an additional dividend of CHF 0.50 per registered share be distributed from the capital contribution reserves:
This corresponds to a maximum total dividend distribution of kCHF 4 915 (previous year kCHF 9 830). The amount of the dividend distribution depends on the amount of the dividend-eligible shares at the time of the distribution. No dividends will be distributed on treasury shares.